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DGrant

Risk Analysis of XRP: The Four Horsemen

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We have to take the Triffin dilemma into consideration. We know the Federal reserve and central banks around the world have been thinking about this conundrum since the 60s. In reality it has been sort of commented on for milllenias by people like Machiavelli and Roman historians and emperors.

https://en.wikipedia.org/wiki/Triffin_dilemma

Some sort of liquid digital asset could possibly solve this if the cards are played right. It will have to start as a small thing that gains trust over time in many markets and usecases. Projects like USC (started by UBS and Clearmatics in 2015) are doing something very different from this. The XRP-ledger can be developed on by anyone for anything they want.

Edited by mandelbaum

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1 hour ago, AlibabaGrp said:

Xrp itself has no competition. Its only competition would be another digital asset, which doesn't exist really, nothing close to xrp

that^ unless they come up with something that does the transactions before you even want to do it yourself, I'm not worried. Adoption is happening, crypto is being widely accepted by big names. It's all coming together and xrp is the best DA by far.

1) Ripple has been working with regulators for years, they even have Ben Lawsky in their pocket

2) We are on the cusp of mass adoption, this is still a very early space that needs to be ironed out which takes time and effort

3) There is no competition with SWIFT, haha they have no means of settlement

4) PoS coin, lets go!

 

we are moving to a fully liquid and decentralized world, its happening. We are living history as it unfolds...put your big boy pants on everybody

Edited by XRPLearner

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3 hours ago, DGrant said:

This analysis examines four of the major criticisms of XRP: 

1) US government regulatory threat

2) Lack of market adoption by financial institutions for cross-border remittance

3) Competition from Swift, the incumbent

4) Technological risk associated with the Ripple Protocol Consensus Algorithm (RPCA)

Using an empirical approach based on observations of key stakeholders on each issue, this analysis attempts to to qualify the threat of these criticisms to XRP adoption using two matrices. The first will contrast Current Unknowns – how much about this risk is unknown, vs. Threat Development Time – how long market participants will have time to make decisions based on new information. The second matrix explores the Probability that the threat will occur versus the Impact on XRP in terms of the severity if the threat materializes.

https://coinsavage.com/content/2019/01/risk-analysis-of-xrp-the-four-horsemen/

I'm basking in the structure and organization of your writing.   Ahhhhh, that's nice.

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3 hours ago, DGrant said:

This analysis examines four of the major criticisms of XRP: 

1) US government regulatory threat

2) Lack of market adoption by financial institutions for cross-border remittance

3) Competition from Swift, the incumbent

4) Technological risk associated with the Ripple Protocol Consensus Algorithm (RPCA)

Using an empirical approach based on observations of key stakeholders on each issue, this analysis attempts to to qualify the threat of these criticisms to XRP adoption using two matrices. The first will contrast Current Unknowns – how much about this risk is unknown, vs. Threat Development Time – how long market participants will have time to make decisions based on new information. The second matrix explores the Probability that the threat will occur versus the Impact on XRP in terms of the severity if the threat materializes.

https://coinsavage.com/content/2019/01/risk-analysis-of-xrp-the-four-horsemen/

Your description of investing in xrp as "venture capital with liquidity" is appropriately descriptive. We are so fortunate to be able to invest at this stage, like venture capitalists. I have thought about it as being a venture capitalist, but never put together that we also have liquidity. I wish all the sellers would look at it more like venture capital and leave their money in, but none the less we (as in average, shallow-pocket investors) are lucky even with the waves of volatility. We all know that with stocks people like us don't get to get in before an IPO takes them public. Thanks for the analysis!

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4 hours ago, DGrant said:

This analysis examines four of the major criticisms of XRP: 

1) US government regulatory threat

2) Lack of market adoption by financial institutions for cross-border remittance

3) Competition from Swift, the incumbent

4) Technological risk associated with the Ripple Protocol Consensus Algorithm (RPCA)

Using an empirical approach based on observations of key stakeholders on each issue, this analysis attempts to to qualify the threat of these criticisms to XRP adoption using two matrices. The first will contrast Current Unknowns – how much about this risk is unknown, vs. Threat Development Time – how long market participants will have time to make decisions based on new information. The second matrix explores the Probability that the threat will occur versus the Impact on XRP in terms of the severity if the threat materializes.

https://coinsavage.com/content/2019/01/risk-analysis-of-xrp-the-four-horsemen/

You certainly covered some different aspects and perspectives, making  me pause for thought, so thank you for a great report. Some points that I would comment on:

Technical flaws - I'm not sure if Ripple has ever responded to the issues highlighted, but perhaps the more technically proficient people on the forum can comment on this.

Regulation - it may well be that the SEC will never rule on whether or not XRP is a security. One could take it, over time, that no action would mean that it is safe to use XRP, but what time would be safe and the FI's won't take risks with this lack of clarity. It may even be that the US government sees the ability to control SWIFT as more important than allowing the SEC to rule on Ripple and thus realise it's potential, or otherwise. Waiting for clarity from the court cases could also take an inordinate amount of time. All of this works against the adoption of XRP in the US, hence the focus on the Middle East and Far East where the friction in the remittance corridors also continues to be high. This is recognised by Ripple management who are looking to cover all angles.

 

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Hello and welcome to the forum @DGrant :D Such an excellent first post! 

This seems to me to be the biggest obstacle...

"Hypothetically, Swift could attempt to leverage the US government as a competitive response to Ripple. This appears to be a much bigger threat to XRP adoption for remittance than a technology advancement by Swift. It would be a non-market threat outside the control of Ripple if the US perceived XRP as a hindrance to leveraging sanctions, which would be interpreted as a threat to national security."

I agree with all of your well-thought-out and well-supported points, and also see the Swift/sanctions issue as a major sticking point. Does anyone know if there could be a way to impose sanctions through Ripple? It seems counter-intuitive, but it could be a consideration for major U.S. uptake and usage.

I hope that the U.S. government recognizes the immense advantage it has in Ripple being a U.S.-based business enterprise, and doesn't throw away this opportunity to lead in the space. But unless there is something more going on behind the scenes as far as legislation, I fear the time to act is slipping away. There are many countries/localities that are already taking positive, supportive action to advance, and the U.S could easily get left behind or even left out.

 

 

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Point 5 is missing. Where is it?
A lot of Digital ways of transering money is happening and are working - if one broadens ones perspective.
So maybe XRP is late to the Party and not fully have understanding of the World outside US? I do not know, but it is a hunch of mine.
Still everything more or less evolves around what is happening in US.
Time will tell. Meanwhile I still HODL. But not 4EVER.

Edited by zenkert

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9 hours ago, AlibabaGrp said:

Xrp itself has no competition. Its only competition would be another digital asset, which doesn't exist really, nothing close to xrp

People who live in Lalaland will be hit the hardest when it doesn't go the way we expect! Remember that the result of this race will depend on how fast Ripple gets mass adoption vs how fast banks can develop a similar system! We all see how US regulations are delaying xrp's adoption while altogether allowing banks to figure their **** out! It's not like banks don't have the money, manpower, resources and connection! TIME is the only factor, so don't be delusional! 

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47 minutes ago, kryptoroi said:

People who live in Lalaland will be hit the hardest when it doesn't go the way we expect! Remember that the result of this race will depend on how fast Ripple gets mass adoption vs how fast banks can develop a similar system! We all see how US regulations are delaying xrp's adoption while altogether allowing banks to figure their **** out! It's not like banks don't have the money, manpower, resources and connection! TIME is the only factor, so don't be delusional! 

The problem with your scenario where "banks" can develop a similar system in a race with Ripple's adoption speed seems unlikely. The scenario you suggest would only work if a large portion of the major banks agree and create a bridge asset that can implement value transfer with low/no counter party risk. Considering there are well over 10000+ banks/credit unions around the world, it just seems unlikely for that many separate entities creating one asset that everyone can agree on. Especially since XRP has already been created and it is already functional in it's early stages. 

Just my two cent

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5 hours ago, kryptoroi said:

People who live in Lalaland will be hit the hardest when it doesn't go the way we expect! Remember that the result of this race will depend on how fast Ripple gets mass adoption vs how fast banks can develop a similar system! We all see how US regulations are delaying xrp's adoption while altogether allowing banks to figure their **** out! It's not like banks don't have the money, manpower, resources and connection! TIME is the only factor, so don't be delusional! 

You're one of those people that thinks like what if walmart created a web better than Amazon, what if Taxis created an app and destroyed Uber, what if Blockbuster came back and destroyed Netflix and yada yada yada.... you simply don't understand what makes a business successful lol yeaaa banks will just create another crypto and XRP game over

Edited by AlibabaGrp

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