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AlexCobb

XRP and The Trillion Dollar SBI Forex Market.

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@AlexCobb Watched your live stream today where this came up - great work getting this video out so quickly after! Interested to see what others here make of this.

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6 hours ago, slinuxuzer said:

If we really want to stretch the theory, what would stop SBI from buying XRP with USD, then swapping it into BTC and selling BTC for JPY? Thereby creating an asymmetric relationship where the USD/XRP price rises, but the JPY/BTC price goes down?

USD > XRP > BTC > JPY

but USD > XRP > BTC > JPY it's the same as USD > JPY:

USD > XRP = price of XRP goes up

XRP > BTC = price of XRP goes down again, BTC goes up

BTC > JPY = price of BTC goes down again

Anyway the overall volume is growing

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5 hours ago, Dario_o said:

but USD > XRP > BTC > JPY it's the same as USD > JPY:

USD > XRP = price of XRP goes up

XRP > BTC = price of XRP goes down again, BTC goes up

BTC > JPY = price of BTC goes down again

Anyway the overall volume is growing

We care less about the BTC/XRP spread than XRP/USD right?

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Posted (edited)
16 hours ago, slinuxuzer said:

If we really want to stretch the theory,

At first glance this will only stretch as deep as your liquidity is deep. 

But in reality, a payment path is only as fast as it's slowest hop... sort of like, a chain is only as strong as it's weakest link.

There is additional risk in increasing the time which the liquidity is floated, and adding extra hops, (especially if they are as slow as btc's 30+ min) then you are increasing the TX costs. "Float" can be thought of as a loan, interest is charged across time, the more time, the more cost.

I would guess that SBI would do a combo of "make a market" between XRP and each fiat, as well as btc/eth/etc to fiat, and also "host a market" for fiat to each crypto. With the difference being when they "make a market' they are selling their own liquidity, vs when they "host a market" they are acting like an exchange and letting traders trade their own liquidity. 

Given that XRPLedger is so much faster than other crypto ledgers, it is likely that it will be used to close out multi leg trades, and I remember some Ripple person saying as much a few months back.

Even if SBI wanted to do multi-crypto-hop transactions (maybe for arbitrage?) they could issue btc/eth/etc on ledger, backed by the crypto deposits of their traders, and do a multi-hop TX all on XRPLedger through as many crypto currencies as they wish to string together.

There used to be an arbitrage trade where you could get custody of an asset on one exchange faster than settling the asset on another, and you could make money on the time delay, having already seen where the price movement was on the faster exchange, and then doing a trade on the slower exchange. (trade out "exchange" for "crypto ledger" and you have the same idea.) The faster ledger/exchange becomes the base from which you trade... ultimately their own private corp ledger is the base which they judge their results and trade from.

 

Edited by KarmaCoverage

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22 minutes ago, KarmaCoverage said:

At first glance this will only stretch as deep as your liquidity is deep. 

But in reality, a payment path is only as fast as it's slowest hop... sort of like, a chain is only as strong as it's weakest link.

There is additional risk in increasing the time which the liquidity is floated, and adding extra hops, (especially if they are as slow as btc's 30+ min) then you are increasing the TX costs. "Float" can be thought of as a loan, interest is charged across time, the more time, the more cost.

I would guess that SBI would do a combo of "make a market" between XRP and each fiat, as well as btc/eth/etc to fiat, and also "host a market" for fiat to each crypto. With the difference being when they "make a market' they are selling their own liquidity, vs when they "host a market" they are acting like an exchange and letting traders trade their own liquidity. 

Given that XRPLedger is so much faster than other crypto ledgers, it is likely that it will be used to close out multi leg trades, and I remember some Ripple person saying as much a few months back.

Even if SBI wanted to do multi-crypto-hop transactions (maybe for arbitrage?) they could issue btc/eth/etc on ledger, backed by the crypto deposits of their traders, and do a multi-hop TX all on XRPLedger through as many crypto currencies as they wish to string together.

There used to be an arbitrage trade where you could get custody of an asset on one exchange faster than settling the asset on another, and you could make money on the time delay, having already seen where the price movement was on the faster exchange, and then doing a trade on the slower exchange. (trade out "exchange" for "crypto ledger" and you have the same idea.) The faster ledger/exchange becomes the base from which you trade... ultimately their own private corp ledger is the base which they judge their results and trade from.

 

If these swaps take place inside of the same exchange then there are many ways the transaction could be conducted without the need to settle through the BTC/BCH public ledger, also as you mentioned you can hold and transfer other assets on the XRP ledger, we'll see what happens, any way we look at it once XRP hold the majority of fiat volume there will be many opportunities to exert pressure and shape the landscape.

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24 minutes ago, slinuxuzer said:

If these swaps take place inside of the same exchange then there are many ways the transaction could be conducted without the need to settle through the BTC/BCH public ledger, also as you mentioned you can hold and transfer other assets on the XRP ledger, we'll see what happens, any way we look at it once XRP hold the majority of fiat volume there will be many opportunities to exert pressure and shape the landscape.

It'll be funny when the fastest way to trade BTC and ETH turns out to be through XRP ledger.

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On 7/16/2018 at 9:35 PM, slinuxuzer said:

IMO, once SBI VC goes live, the majority of the infrastructure needed to take on JPY Forex volume will be in place, the only real question I have is, how long will it take to integrate the platforms at SBI FX and SBI LM with xRapid? For all we know this engineering work is already done or real close, so maybe it will take another 12 months after SBI launch or maybe we'll see tons of volume from Forex right away, I guess we'll see what happens.

I'm kinda hoping that we see some action after September prob in October to be inline with SWELL. I'm kinda hoping that's what the SBI Fx campaign that is started July 31st - September 1st is testing/fine-tuning possible xRapid throughput as a bridge-currency for different pairs with Japanese Yen.

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