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Hope some one can explain this to me.

So the idea of XRP and XRAPID is to speed payments and reduce the cost. My understanding is that your payments provider buys XRP with the native currency on the exchange, sends it to the corresponding provider who the sells it on an exchange for the local currency and the transfer is settled and funds are in the account in seconds. 

My confusion lies with the cost of buying XRP on the Exchange in the first place, then a second cost in selling the XRP at the other end. So where are these huge savings. I sent £250 to Uphold to buy XRP,  it cost me £8.99 and took 24 hours. I bought XRP with the £250 at a cost of £3.50. A Total cost of £12.49. I understand that sending my Zerps to my Ledger Nano S was all but free and it took minutes( thats XRPS promise upheld) But the cost in getting to that point is not cheap. 

My confusion is compounded by this thought. If both providers keep their XRP on the Exchanges or in Custody wallets to avoid these exchange fees, dosn't this then become a sort of Nostro account.

 I am all in on XRP, and this question is a generic aimed at Digital Assets in general.

Thanks for your time

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@pucksterpete that is the exact reason why I see XRP value in thousands rather than tens eventually. When majority of XRP is owned by banks and governments, they don’t use it for transactions but

1.  Yes. 2. The huge savings were not meant for speculative investors, they are meant for large institutions that save money with quicker transactions occurring at lower fees without requiring No

Yes, it becomes a nostro account. but from that one account the FIAT can be exchanged to XRP which can then be exchanged for all FIAT xrp has a pair with. A bank has to only have one nostro accou

IMHO Uphold is not the best example for the use of Ripple/XRP. Quite slow and expensive! But the costs you had are not imposed by XRP, this is just them making a lot of money out of a simple and cheap transaction!.

But I see your point.

In any case, I guess competition will bring the prices down as more and more exchanges are becoming online. 

Edited by Makanakis
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11 minutes ago, Woodseal said:

My confusion is compounded by this thought. If both providers keep their XRP on the Exchanges or in Custody wallets to avoid these exchange fees, dosn't this then become a sort of Nostro account.

Yes, it becomes a nostro account. but from that one account the FIAT can be exchanged to XRP which can then be exchanged for all FIAT xrp has a pair with.

A bank has to only have one nostro account (on the preffered exchange) instead of dozens of accounts in all sorts of FIAT

On the topic of fees: A high volume user can negotiate a lower fee structure with the exchange. What you are paying on Uphold doesn't really compare.

Edited by Gepster
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11 minutes ago, Gepster said:

Yes, it becomes a nostro account. but from that one account the FIAT can be exchanged to XRP which can then be exchanged for all FIAT xrp has a pair with.

A bank has to only have one nostro account (on the preffered exchange) instead of dozens of accounts in all sorts of FIAT

On the topic of fees: A high volume user can negotiate a lower fee structure with the exchange. What you are paying on Uphold doesn't really compare.

One correction there is not a need for any Nostro account at all, XRP with Xrapid eliminates that need period.

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1 hour ago, Woodseal said:

Hope some one can explain this to me.

(1) So the idea of XRP and XRAPID is to speed payments and reduce the cost. My understanding is that your payments provider buys XRP with the native currency on the exchange, sends it to the corresponding provider who the sells it on an exchange for the local currency and the transfer is settled and funds are in the account in seconds. 

(2) My confusion lies with the cost of buying XRP on the Exchange in the first place, then a second cost in selling the XRP at the other end. So where are these huge savings.

(3) I sent £250 to Uphold to buy XRP,  it cost me £8.99 and took 24 hours. I bought XRP with the £250 at a cost of £3.50. A Total cost of £12.49. I understand that sending my Zerps to my Ledger Nano S was all but free and it took minutes( thats XRPS promise upheld) But the cost in getting to that point is not cheap. 

(4) My confusion is compounded by this thought. If both providers keep their XRP on the Exchanges or in Custody wallets to avoid these exchange fees, dosn't this then become a sort of Nostro account.

 I am all in on XRP, and this question is a generic aimed at Digital Assets in general.

Thanks for your time

1.  Yes.

2. The huge savings were not meant for speculative investors, they are meant for large institutions that save money with quicker transactions occurring at lower fees without requiring Nostro accounts.  The average person purchasing at an exchange is not necessarily saved anything in the purchase*

3. Uphold sells XRP, but the hold up is the time it takes your bank to send the money to them. Similarly, I don't think Uphold runs on XRP in the backend - it is just an item they sell in a traditional fashion.  If your bank or Uphold were using XRP currently, it would not have taken so long.  An important note - lots of consumer transactions seem to occur instantly, but in reality they do not.  They are recorded and the companies must wait on the backend until the money actually arrives and the matter settled.

4.  Perhaps in a sense, but the difference is that Corps that wish to operate in other countries must hold a different account for every currency they might transact in.  With XRP, you only need one pile to disburse anywhere, reducing sunk costs and speeding the transactions.  

Hope that helps, happy investing!

 

*The new exchanges coming out using XRP on the backend are fast, though.

 

Edited by WrathofKahneman
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27 minutes ago, RikkiTikki said:

One correction there is not a need for any Nostro account at all, XRP with Xrapid eliminates that need period.

Uhm what do you want to call the relationship a bank or liquidity provider has with the exchange?

I call it nostro. Its fiat in limbo. Its better than a dozen pools of foat in limbo.

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13 minutes ago, Gepster said:

Uhm what do you want to call the relationship a bank or liquidity provider has with the exchange?

I call it nostro. Its fiat in limbo. Its better than a dozen pools of foat in limbo.

I was just going by the true definition of a Nostro account and if that holds true Banks are not going to put their money on exchanges they may use them to facilitate transfer which in that case the money will only be present on the exchange for a very small amount of time, but I highly doubt they will utilize them as a place of storage any time soon. As I said in a previous post different thread I honestly think banks are going to develop their own institutional exchanges governed by their rules.  I think were starting to see this now.

 

 

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6 hours ago, Gepster said:

Uhm what do you want to call the relationship a bank or liquidity provider has with the exchange?

I call it nostro. Its fiat in limbo. Its better than a dozen pools of foat in limbo.

 

5 hours ago, RikkiTikki said:

I was just going by the true definition of a Nostro account and if that holds true Banks are not going to put their money on exchanges they may use them to facilitate transfer which in that case the money will only be present on the exchange for a very small amount of time, but I highly doubt they will utilize them as a place of storage any time soon. As I said in a previous post different thread I honestly think banks are going to develop their own institutional exchanges governed by their rules.  I think were starting to see this now.

 

 

I tend to be wrong, so don't quote me here.... 

but would it be a technical true nostro account - probably not.

Think about xrp as a literal piece / chunk of digital GOLD... REAL actual GOLD is valuable and transferable to ANY currency.... it's just hard to transfer and transport.  XRP is fast.  So that one XRP digital GOLD is able to be transferred from US dollars to Mexican Pesos or to Japanese Yen - and yeah it's not a traditional nostro account, but there's no need to keep two - Nostros just the one in that example....

hope that helps or makes sense.

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@Woodseal I do not normally answer to these questions, because of their sheer size... but here I am :)

 

In short, whole payment trail from sender´s currency to receiver´s currency is confirmed before money even starts to move. When the whole chain confirms that it is doable, it starts executing the order from last to first. Receiver gets their MXN to their bank account from second exchanges bank account, second exchange gets XRP from first exchange and first exchange gets their USD from sender´s bank account to their own USD bank account.

Remember that these exchanges in this example operate in that particular currency all the time, so these are not Nostro/Vostro accounts, but just regular accounts for daily business. The accounts are not the means of settlement later on, because the Ripplenet transaction is the settlement instantly.

 

Here´s an explanation by David Schwartz himself, reply to a question about transaction times. Published in Quora 16.3.2018. I add some extra words inside parenthesis, to better answer your guestion and to get understanding of the subjects involved in this example.  !!!!! No parenthesis originally existed in David´s post. !!!!!

"It doesn’t need to be cashed out by a bank after a cross-border transaction. That’s the whole point. In an instant XRP transaction, the recipient of the XRP has already committed to making a domestic payment to the recipient, otherwise no funds would move.

Say Alice (Ripplenet USD bank sender´s account)  has $100 and she wants to deliver 1,800 MXN to Bob (Ripplenet MXN bank receiver´s account). She finds Charlie (Ripplenet USD exchange), who is willing to provide 120 XRP for $100 and David (Ripplenet MXN exchange) who is willing to provide 1,800 MXN for 120 XRP.

The following things happen:

Alice (USD bank) arranges it so that if 1,800 MXN is sent to Bob, she (USD bank) sends $100 to Charlie. (USD exchange)
Charlie ( USD exchange) sees that he will get $100 if 1,800 MXN is sent to Bob (MXN bank). So he arranges it so that if 1,800 MXN is sent to Bob, he sends 120 XRP to David. (MXN exchange)
David (MXN exchange) sees that if 1,800 MXN is sent to Bob (MXN bank), he will get 120 XRP. So he sends 1,800 MXN to Bob. (MXN moves from exchange´s MXN account to receiver´s MXN account)
David claims the 120 XRP that Charlie locked up for him. (XRP moves from USD exchange to MXN exchange)
Charlie claims the $100 that Alice locked up for him. ( USD moves from sender´s bank account to exchange´s USD account)
And, we’re done. Notice that the very first movement of money happened in step 3, when 1,800 MXN was sent to Bob. So that’s first, not last.

Notice that all that’s required to do this is that all ledgers involved support locking up of funds that are released on a detectable condition. XRP Ledger supports this with the “Escrow” transaction. Supporting this with currencies like USD and MXN requires interledger, xCurrent, or something similar."

 

That was it by David Schwartz, and it definitely helped me in the first place to draw it all on paper.

Notice! If this first exchange in this example would have both corridors open directly to both currencies, this whole transaction and settlement could be validated using just one exchange which would give value to both currencies at the same time. After transaction is cleared, XRP returns back to exchange´s use for next incoming value changing transaction. Only fiat currency values would then change in sending and receiving ends bank accounts. Then there would be no slippage, no volatility, nothing, since it all happens in an instant. 

In this case XRP does not need to enter XRPL since it does not move, so no transaction fees there although they are absolutely minimal in any case. Ripplenet only uses this exchange´s XRP for liquidity and reserves it only for this brief moment it needs for confirming sender and receiver that they are safe and secure to do business with each other.

Liquidity then stays in one place and is provided to both currencies.

 

PLEASE correct me if you notice any misunderstanding from my side, thank you!

Edited by P3T3RIS
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@pucksterpete

that is the exact reason why I see XRP value in thousands rather than tens eventually. When majority of XRP is owned by banks and governments, they don’t use it for transactions but for liquidity. This is the best means for them to get rid of debt. The higher the value of XRP, the easier it is to pay anything.

Perhaps 5-10% is available on open market, and that amount defines the price per unit for every coin in circulation. So we humans build value to XRP for banks and governments to benefit.

If Ripple’s plan is successful, people will want XRP because of it’s instant accessibility to any other currency, asset or commodity at any time and all the time, in 4 seconds, and it then is the ultimate holder of value because it is valued in any other value all the time and any time. It will be then a respected, widely accepted, trusted method of payment.

Drops do matter ??

I do see it like this, and my vision is clear!

 

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18 hours ago, Woodseal said:

Hope some one can explain this to me.

So the idea of XRP and XRAPID is to speed payments and reduce the cost. My understanding is that your payments provider buys XRP with the native currency on the exchange, sends it to the corresponding provider who the sells it on an exchange for the local currency and the transfer is settled and funds are in the account in seconds. 

My confusion lies with the cost of buying XRP on the Exchange in the first place, then a second cost in selling the XRP at the other end. So where are these huge savings. I sent £250 to Uphold to buy XRP,  it cost me £8.99 and took 24 hours. I bought XRP with the £250 at a cost of £3.50. A Total cost of £12.49. I understand that sending my Zerps to my Ledger Nano S was all but free and it took minutes( thats XRPS promise upheld) But the cost in getting to that point is not cheap. 

My confusion is compounded by this thought. If both providers keep their XRP on the Exchanges or in Custody wallets to avoid these exchange fees, dosn't this then become a sort of Nostro account.

 I am all in on XRP, and this question is a generic aimed at Digital Assets in general.

Thanks for your time

IMO: This is the issue of centralized exchanges, on top of providing their own fees to earn extra money off of new money coming into the market.

Fortunately, this has nothing to do with XRP's use case, as it's the living currency in a large system of remittance and monetary flow. Ledgers will still close as fast as ever, TPS will still scale immensely, and bank a sending funds to bank b isn't imposed by these fees due to the RPPS (most likely liquidity providers will work with institutions and banks. when they have to re-up on XRP.)

 

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