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Interesting debate on Twitter involving David Schwartz, Tom Channik, Ari Paul, Rob Lee

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6 minutes ago, automatic said:

First and foremost, lets focus on the positive - Ari says that he can envision a scenario where xrp is used at scale for remittances.  Remittances are Ripple's target #1, so it appears that experts agree that the current trajectory could in fact lead to the accomplishment of the initial goal.  This is good.

Regarding interbank transfers, Ari does have a point - banks are businesses, and businesses like to make money.  It is not a matter of "if" they will develop a competing bankcoin; they WILL develop competing bankcoins (Quorum is a good example).  At that point is becomes a race towards adoption;  large banks will throw their weight around (i.e pressuring smaller partners) in hopes of pushing adoption, whereas Ripple will have to counter with cost/speed of implementation and breadth of RippleNet network.  The first one to reach broadest possible adoption will win.

My guess is that Ripple end up taking the race solely due to the fact that the addressable market of worldwide banks that could use the service but have no discretionary funds to develop a proprietary system will be larger than the market of banks that can either 1) develop their own bankcoin or 2) be pushed into adopting a walled-garden bankcoin.

Time will tell.  In the meantime, let's focus on remittances.

Totally agree.

I also think corporate treasury seems a more viable business opportunity than getting big banks to use XRP.

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Ari's argument banks will avoid using XRP because they do not want to enrich Ripple is potentially valid.  This is arguably the biggest downside to the centralized ownership of XRP.  I suspect some (but not necessarily all) of the banks, who choose to use publicly traded digital assets, may prefer another one.

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1 minute ago, automatic said:

Since I mentioned Quorum, take a look at this: https://cointelegraph.com/news/jpmorgan-considers-making-blockchain-platform-quorum-an-independent-entity

Here is the relevant section:

A unnamed source told Bloomberg that no conclusion has yet been reached about whether Quorum would function better as an independent entity, which could potentially attract more partners. The Financial Times adds that other unnamed sources have said that the JPMorgan label attached to Quorum may be steering away potential partners that are also competitors of JPMorgan.

In many ways this illustrates typical bank thinking; this particular thing is hot -->  we need to get in on this thing --> if we can hijack it and make it our own we can really make some money.

...and then they create a walled garden that gets zero traction outside of their immediate partners.  The end.

This happens so frequently that you would think that CIOs would eventually learn the lesson.  But no - by the time they learn the lesson they get fired/moved elsewhere and are replaced by someone else equally as hungry to make their mark on the organization.  And so, the cycle perpetuates.

A good example of this is crap like Chase Pay. It doesn’t work and nobody uses it because it’s NOT INTEROPERABLE. Oh you don’t have Chase? Guess we’re back to Fintech (Venmo/PayPal) because it’s too closed to solve the users problems 

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I think remittance will be used first. Xrapid seems to fit very well in that arena. Regarding banks and arguments that Chase and others will not use them, well the argument is correct that large banks that control large international transfers will want to use what they have. Large accounts capable of conducting the business with high fees. Xrapid can allow smaller banks to compete in international transfers. If a small bank can transfer a million dollars to the Philippines while making their cut, and charging less than previously since they do not have to use a large bank then a small bank can now compete with a large Goliath.  There are many corporations in this country that operate in Mexico, China, Singapore, and others that are small (like 20 people) that produce speciality  products that would be happy to use their local banks to transfer money. Time is tight, money is tight, and people like face to face business. Ripple can cut the large banks out of their monopoly. Sure it is a fight for ripple. As my grandfather said "if you produce a good product, it will sell itself."

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34 minutes ago, automatic said:

First and foremost, lets focus on the positive - Ari says that he can envision a scenario where xrp is used at scale for remittances.  Remittances are Ripple's target #1, so it appears that experts agree that the current trajectory could in fact lead to the accomplishment of the initial goal.  This is good.

Regarding interbank transfers, Ari does have a point - banks are businesses, and businesses like to make money.  It is not a matter of "if" they will develop a competing bankcoin; they WILL develop competing bankcoins (Quorum is a good example).  At that point is becomes a race towards adoption;  large banks will throw their weight around (i.e pressuring smaller partners) in hopes of pushing adoption, whereas Ripple will have to counter with cost/speed of implementation and breadth of RippleNet network.  The first one to reach broadest possible adoption will win.

My guess is that Ripple end up taking the race solely due to the fact that the addressable market of worldwide banks that could use the service but have no discretionary funds to develop a proprietary system will be larger than the market of banks that can either 1) develop their own bankcoin or 2) be pushed into adopting a walled-garden bankcoin.

Time will tell.  In the meantime, let's focus on remittances.

I think this is about right.  Ripple/XRP are now so far out of the gate they are going to establish roots whatever the banks do or want to do. 

Smaller banks have no more reason to adopt something created by Big Banks than something that is created by a hungry young software company that puts their interests first.

SWIFT have already conceded they do not have the ability to create a digital asset.  Where is this comparable, or nearly as good tech produced by a big bank and have they started testing it yet? 

The obvious route is for countries like Japan to create digital yen like J-coin and then link into the ILP and use available resources for cross border payments (which at present is Ripple/XRP). 

 

 

Edited by Julian_Williams

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1 hour ago, xrpmeplease said:

sort of...I took it to say that banks might prefer to use inferior tech if they can control it...one of my hopes is that ultimately banks won't have a choice but use XRP if they want to remain competitive/relevant

That’s kind’ve what I mean. The payments industry is changing and I don’t believe they’ll be able to get by with the same ol bs. 

Edited by camxrp

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1 hour ago, xrpmeplease said:

sort of...I took it to say that banks might prefer to use inferior tech if they can control it...one of my hopes is that ultimately banks won't have a choice but use XRP if they want to remain competitive/relevant

I believe banks & FIs have realized that to be competitive they must adopt the latest tech. Nowadays they prefer actual software companies to develop the ecosystem and not an internal team, so they can focus on their customers.

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1 hour ago, automatic said:

Since I mentioned Quorum, take a look at this: https://cointelegraph.com/news/jpmorgan-considers-making-blockchain-platform-quorum-an-independent-entity

Here is the relevant section:

A unnamed source told Bloomberg that no conclusion has yet been reached about whether Quorum would function better as an independent entity, which could potentially attract more partners. The Financial Times adds that other unnamed sources have said that the JPMorgan label attached to Quorum may be steering away potential partners that are also competitors of JPMorgan.

In many ways this illustrates typical bank thinking; this particular thing is hot -->  we need to get in on this thing --> if we can hijack it and make it our own we can really make some money.

...and then they create a walled garden that gets zero traction outside of their immediate partners.  The end.

This happens so frequently that you would think that CIOs would eventually learn the lesson.  But no - by the time they learn the lesson they get fired/moved elsewhere and are replaced by someone else equally as hungry to make their mark on the organization.  And so, the cycle perpetuates.

You seem smarter than a CIO ?. You should be a CIO

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One thing I think Ari was overestimating was the amount of open source code available for a bankcoin to leverage. Sure rippled and its ledger are open source and would provide a base to build upon. But Ripple has built proprietary software (xCurrent, xVia, xRapid) already to do the hard parts of messaging, price discovery, atomic transactions, etc. They're using XRP to maximize cost savings.

Walled gardens of multiple types of bankcoins just moves the fiat in nostro/vostro accounts into a nostro/vostro accounts of bankcoins. If the banks want a single digital asset, they can build an alternative to XRP and try to compete with Ripple. Too bad they'd be five years behind and retraining their COBOL programmers on distributed, but secure, network cryptographic blockchain solutions. And then sharing implementations with their competitors.

Pretty sure about who'd win that competition.

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2 hours ago, LuoJi said:

But banks? What banks? All together? 

If not are all banks why would the others trust it?

You need a third party.

exactly. And maybe a fourth. I think that Swift will join Ripple labs to get best of both worlds: the Banks still having their familiar message system, and XRP moving the money arounf the world. If this happens to be the caser: instant moon.

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