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Hodlezerper

Circle Competes with Ripple

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@Sebastian has previously pointed out, rightly so, that Circle may be the most realistic competitor to Ripple at the moment. 

Seemingly working backwards, Circle worked on creating a peer to peer value transfer service, and is now looking to integrate crypto into that service. 

Part of the argument about XRP being valuable is that it'd make it difficult for another company to create a crypto that we somehow trust, but if that said company had already built a platform people trust, and then issued their own currency, then flipped the switch, it's conceivable they could usurp quite a bit of market from XRP. Particularly if they go the banking route, which they seem to be doing. 

Obviously Ripple is going enterprise, not Peer-to-Peer so that could be the primary difference. Companies are going to vie for control of various customer bases so we should be on the lookout for their possible routing strategies. 

 

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i don't see it as a direct competitor -- they make their money by trading and so can reduce costs "at the pump"

ripple provides software integrations/upgrades and sells various liquidity/connectivity solutions to banks, who are risk averse by nature

circle are using a risk tolerant approach -- if anything they might compete as liquidity providers for banks but by doing so benefit ripple by aiding xrp liquidity ; and banks can partner with anyone providing liquidity, and it only makes xrp (and thus ripple's software e.g. xrapid) more attractive

ripple have a sort of win-win right now in that, if your "competitors" use xrp, it strengthens ripple's own war chest and liquidity/x-border products!

however, @miguel has also alluded to the possibility of banks just skipping all that and using xrp directly... which would be incredibly efficient *if* xrp is liquid enough

i think circle might struggle in the end if their only model remains trading profits... they will have to come up with a more robust business model (maybe they have already, i don't know enough about them)

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1 minute ago, zerpdigger said:

i don't see it as a direct competitor -- they make their money by trading and so can reduce costs "at the pump"

ripple provides software integrations/upgrades and sells various liquidity/connectivity solutions to banks, who are risk averse by nature

circle are using a risk tolerant approach -- if anything they might compete as liquidity providers for banks but by doing so benefit ripple by aiding xrp liquidity ; and banks can partner with anyone providing liquidity, and it only makes xrp (and thus ripple's software e.g. xrapid) more attractive

ripple have a sort of win-win right now in that, if your "competitors" use xrp, it strengthens ripple's own war chest and liquidity/x-border products!

however, @miguel has also alluded to the possibility of banks just skipping all that and using xrp directly... which would be incredibly efficient *if* xrp is liquid enough

i think circle might struggle in the end if their only model remains trading profits... they will have to come up with a more robust business model (maybe they have already, i don't know enough about them)

It seems to me their aim is to become a bank of sorts. 

They seem to be going after the peer-to-peer space to gain market share among individuals, and then keep them in their platform as a bank providing loans, etc. I know they're working on their own crypto that they'll release to support their platform so it'll be interesting to see how that works. I suppose it could be a smart contract type of deal?

I guess the other thing Ripple has going for it is their actual ledger, which is kickass. So, there's that .

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Circle failed on its previous attempts... why would the same leadership expect to succeed by buying an exchange?

Poloniex is not a significant company. The clients are not loyal to its service. Circle will need to differentiate in some way.

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Interesting.. I find it hard to grasp at this moment, surely going to follow this thread and dig into some old ones. 

Just a thought for now: could there be a long term plan Ripple buying Circle?

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Goldman Sachs Backed Circle Acquires Poloniex Cryptocurrency Exchange

According to Reuters the Boston based company already operates its app-based peer-to-peer payment network using blockchain. It has been one of the most well-funded blockchain startups, and its investors include Goldman Sachs Group and Chinese search giant Baidu Inc.

https://www.newsbtc.com/2018/02/26/goldman-sachs-backed-circle-acquires-poloniex-crypto-exchange/

Circle Makes China Play: Raises $60 Million From Baidu, IDG Capital, Breyer; Forms Circle China 

"The company’s overall vision is to make money more like email or the web. (Sounds like Ripple/XRP/ILP?- this note is mine) When asked a question about cross-border payments, Allaire responds, “We don’t think about cross border email or cross-border web. We’re moving into a world where that just works how the internet works, and there are going to be companies that get built that are the core social payments experience at the center of how people use money, and we want to be one of those companies.”

 

Baidu teams up with PayPal to take its Chinese mobile wallet global

Jul 27, 2017

"PayPal has continued its strategy of expanding its presence on mobile after it revealed a tie-up with Baidu."

Circle Makes China Play: Raises $60 Million From Baidu, IDG Capital, Breyer; Forms Circle China

JUN 22, 2016

"Investing in Circle's $50 million round last spring were Goldman Sachs, Breyer Capital, General Catalyst Partners, Accel Partners, Oak Investment Partners, Fenway Summer, Digital Currency Group and Pantera Capital; it was then valued at $250 million. Allaire declined to update the valuation but says it “increased a good bit from our last financing.”

"While Circle currently uses the Bitcoin blockchain to settle payments (not anymore, see below-my note), Allaire says the company is open to using any public blockchain as long as it has good software support, distribution among merchants and consumers, a global liquid market and enough scale to be secure."

(From Wikipedia)

"In December 2016 the Circle app stopped supporting the exchange of bitcoin"

 

Goldman Sachs Adds Blockchain Page To Main Web Site

By Nathan Reiff | June 30, 2017

"New Technology of Trust"

"Just below the page header which notifies the user that the content to follow is about the blockchain, Goldman Sachs describes this innovation as "the new technology of trust." This could signal a substantial change in the thinking of many of the largest global banks, for whom a lack of trust was one of the primary reasons to stay away from digital currency networks like Bitcoin or Ethereum."

"Throughout, the website is positive and optimistic in its presentation of blockchain, indicating, perhaps, that Goldman is shifting its focus on the technology, and that other bank and businesses may follow in the same way."

Cryptocurrency company Ripple signs for Chelsea office

By Konrad Putzier | January 19, 2018 06:10PM

Blockchain technology company Ripple, which created the cryptocurrency XRP, is opening an office in Chelsea, the firm said.

The San Francisco-based company signed a 6,933-square-foot lease at the Kaufman Organization and Goldman Sachs Asset Management’s 155 West 23rd Street.

 

From Wikipedia:

Digital Currency Group

(Investor in Circle)

Subsidiaries

Grayscale

"Established in 2013, Grayscale is a digital currency investing firm. It manages the Bitcoin Investment Trust (BIT), provides titled, auditable bitcoin exposure through a traditional investment vehicle. BIT shares are the first publicly quoted securities solely invested in, and deriving value from, the price of bitcoin. The Trust trades under symbol: GBTC on the OTCQX market, and is only available to accredited investors."

This ties in to :

Grayscale opens new fund tied to 5 top cryptocurrencies

https://finance.yahoo.com/news/exclusive-grayscale-launches-new-digital-large-cap-fund-tied-bitcoin-ether-ripple-litecoin-160507615.html

Feb 7, 2018 - Grayscale, the company behind the first public stock tied to the price of bitcoin, is launching a new Digital Large Cap Fund weighted to the price of bitcoin, ether, litecoin, ripple, and bitcoin cash.

And this:

CoinDesk

"CoinDesk is a global media, research, and events platform that was acquired[4] by Digital Currency Group in 2016. The company is best known for its coverage of blockchain’s daily news, Bitcoin Price Index and data tools, and its tutorials and research products, including the quarterly State of Bitcoin report. CoinDesk also hosts a conference on digital currencies and blockchain technologies titled Consensus,[5] which was last held in May 2016 in New York City and hosted over 1,500 attendees."

Cryptofunds tap into Wall Street's talent pool

20 Feb 2018

Pantera's first fund was up 758.6 percent since its inception in 2013 through the end of last year. That portfolio includes companies that help buy and store bitcoin including Ripple, Circle, Xapo and Bitstamp.

https://www.cnbc.com/2018/02/20/pantera-crypto-blockchain-fund-lands-deutsche-veteran-william-healy.html

Edited by GiddyUp
addition

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13 minutes ago, MaxEntropy said:

Circle failed on its previous attempts... why would the same leadership expect to succeed by buying an exchange?

Poloniex is not a significant company. The clients are not loyal to its service. Circle will need to differentiate in some way.

What has Circle failed at? As far as I know they failed at selling BTC via credit cards due to fraud. 

To my knowledge, they have succeeded wildly with providing crypto to large investors (over 250k).

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Circle was the first recipient of a BitLicense in New York. When they pivoted away from direct sales of Bitcoin to larger investors and FIs, it created a big opportunity for Coinbase, another BitLicense holder.  In my opinion, Coinbase is the one that should be most threatened by this acquisition.  It's no wonder that Coinbase is now trying to diversify with their Coinbase Custody. So it seems that these two have come 'full circle' with today's news.

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@Hodlezerper, I am of course in complete agreement with you.  One of my first posts on this forum was about Circle,.  As I recall, people were replying with the XRP community's favorite phrases: "Ripple is building the infrastructure.  Circle is not." "Ripple is the road.  XRP is the car.", "Ripple is the engine.  XRP is the oil," and the list goes on (I am sure I got some of those wrong).  :)

I always viewed this as a bit short sighted as who says an entirely distinct infrastructure and network needs to exist?  What I mean by that is Circle could conceivably be quite successful by using a wide variety of block chains (i.e., Bitcoin, Ethereum, Ripple, etc.) and offer similar services as Ripple.  

A few months back, I also posted about Circle Invest: https://www.circle.com/en/invest.  In my opinion, Circle Invest is going to compete directly with Coinbase.  And XRP will likely be included if the screenshot is still accurate (Circle already trades XRP with their OTC operations).

  • No commissions
  • Custodial account
  • Unparalleled liquidity
  • Variety of coins
  • Secure storage

@MaxEntropy, I believe Circle Invest is one of the primary reasons Circle acquired Poloniex.

According to Circle's whitepaper on CENTRE, they plan on adding their CENT token to their OTC and market making operations.  It is important to keep in mind the whitepaper is a few months old so they may have already done this.

Quote

Circle Trading plans to add CENT trading and liquidity to its OTC and market making capabilities. This will contribute to liquidity for fiat flows that employ CENTRE tokens and help network members match new fiat currency pairs with other network member currencies. While the expectation is that most major crypto asset exchanges may ultimately also contribute to CENTRE token liquidity, Circle believes that its early commitment to providing liquidity and orderly FX flows will help promote the successful development and ongoing operation of the CENTRE network.

People can think what they want about Circle, but I have long viewed them as the "Ripple of the East" (they are based out of Boston).  They are just going about things in a different manner.  In addition, as much as Ripple likes to compare themselves to Amazon, Circle IMO has a more Amazon feel.  Has Circle spread themselves too thin with their P2P money transfer app, CENTRE, Circle Invest, and OTC operations as Yahoo! did when Brad Garlinghouse was there (i.e., the famous peanut butter memo)?  Perhaps, but at the same time, it is also conceivable Ripple has become a bit too laser focused on cross border payments for institutions.

On the other hand, I recognize the problem Ripple is trying to solve is immense and that we, the XRP community, are probably only privy to 5-10% of the information (even when factoring in Ripple's preference for making announcements about announcements :)).

One of the reasons I do not post much anymore (and have been sticking to my dashboard: https://public.tableau.com/profile/sebastian8319#!/) is because so few on this forum seem willing to engage in critical discussions.

I am bullish on XRP and own what I consider to be a good amount, but I also have a healthy amount of fear, uncertainty, and doubt (FUD).  Anyone who does not have FUD either possess inside information (which I envy) or they are not being rational (which I do not envy :)).

Edited by Sebastian

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2 hours ago, Hodlezerper said:

@Sebastian has previously pointed out, rightly so, that Circle may be the most realistic competitor to Ripple at the moment. 

Seemingly working backwards, Circle worked on creating a peer to peer value transfer service, and is now looking to integrate crypto into that service. 

Part of the argument about XRP being valuable is that it'd make it difficult for another company to create a crypto that we somehow trust, but if that said company had already built a platform people trust, and then issued their own currency, then flipped the switch, it's conceivable they could usurp quite a bit of market from XRP. Particularly if they go the banking route, which they seem to be doing. 

Obviously Ripple is going enterprise, not Peer-to-Peer so that could be the primary difference. Companies are going to vie for control of various customer bases so we should be on the lookout for their possible routing strategies. 

 

It's not about whether Circle can compete with Ripple but more about Circle vs. ILP.

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This is all speculative but I can see Circle using crypto as an intermediary for cross-currency fiat transfers so USD -> some crypto -> KRW, and using poloniex to source that fiat-crypto liquidity (I know polo doesn't trade fiat right now, but perhaps Circle is looking to add that in the future). That would essentially be what Ripple is trying to do except Ripple would ideally like to have XRP as the intermediary crypto whereas Circle might not care and would choose from any of the fiat-crypto pairs on polo as the intermediary. 

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