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BobWay

Hi! I'm Bob

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@BobWay Thanks for the amazing thread. It has truly been a great read.

I have a pretty important question:

How can I get as many likes per minute as you? It's almost as if the OOL counter is disabled on anyone liking your comments...

I've spent 18 months accumulating this false sense of numerical recognition, and here you are upstaging even the mighty chicken and bending robot.

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Posted (edited)

@BobWay Just want to preface this with a huge thank you for doing this for the community, the stuff I’ve learned is absolutely incredible from just this post. 

 

How far ahead of “competition” is Ripple in realizing it’s strategey? Who are their closest competitors in your opinion, IBM? 

 

I think the strategy of Ripple is crystal clear in that they are targeting high friction corridors (Mexico, India, Philippines, Singapore, Thailand...) are these (mostly ASEAN) the corridors that will see a lot of XRP usage at first? I’ve also seen a lot of activity in the MENA region, it seems like they’ve gone full on into the blockchain space, do you see that as being a targeted corridor for XRP use? 

 

How do big banks/treasuries view crypto currencies like XRP in your opinion, are they taking it seriously? Can they realize benefits today or are they waiting to join the game? What’s holding them back? Back in 2016 there was a pilot of like 16 banks that trialed using XRP and they said they were pretty much on board but couldn’t use it because of regulations, are they any closer to using digital assets today? 

Edited by Ryyy20

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4 hours ago, BobWay said:

When you analyze xRapid's flow, you'll quickly realize that in a single transaction you both buy XRP and sell the same amount of XRP. The payment flow doesn't consume XRP in and of itself. What it does is move XRP from one trader's hands to another's.

So in the delivery end of the payment the second trader is buying XRP in exchange for selling his fiat that needs to be delivered. In situations where payments are predominantly one way (say remittance flows from the US to Mexico) the delivery currency is consumed by the transaction. In effect, all of the Pesos that Mark deposited into the exchange to sell for XRP, get removed from the exchange and delivered to Bob.

As the amount of available Pesos is consumed, the demand drives up the price for the rest. This is typical market behavior. But in a small contained system one way flows can completely deplete the delivery currency from the exchange. This stops the payment flow completely.

So "Mak" needs to find a second transactional pathway in which he can sell his XRP (say for EUR) then use that EUR to buy MXN in another market, then redeposit that MXN back into the xRapid exchange so the payment flow can continue. That is called "rebalancing" in our jargon.

Rebalancing is really a costly pain in the ass. No traders really want to do that. What they prefer are two way flows. This allows them to sell their MXN for XRP in support of incoming payment, then to buy the MXN back using slightly less XRP in support of an outgoing payment.

Finding underserved two way flows is really hard because they are so easy to make money on they everyone wants to serve them.

Yes, "High volume, Low value payments" has been part of Ripple's pitch for a long time now. I'm partially responsible for that direction. Traditionally, low value payments have been very costly in proportion to the value transferred. That makes them low hanging fruit for improvement.

High value, low volume payments are actually decently served by the current correspondent banking system. The service they currently provide is by no means great, but it is tolerable to most people with high values to send.

But that isn't the "deep" reason that Ripple targets them. It turns out that it is pretty much impossible to bootstrap a high value low volume payment system. It requires too much trapped capital.

Let's take the best case scenario for both by saying we have balanced flows. Let's say we are going to move a million dollars left to right and the same amount right to left.

For low value high volume, let's say there are going to be a million $1 transactions in both directions. For the high value low volume case let's say there is going to be a single $1,000,000 transaction in each direction.

So now say you are Mark and Mak putting up liquidity in the markets to support these payment through XRP. How much money do you need to have on deposit?

In the low value case, presuming the transactions interleave, Mark is going to be sell $1 worth of XRP for USD, and Mak is going to be selling some MXN for the same amount of XRP. Then on the next payment in the reverse direction, the flows reverse. So in the best case, Mark only needs $1 on deposit and Mak only needs $1 on deposit in order to support the necessary liquidity. BUT, and this is the truly awesome part, they put up $1 but get to claim spread fees on $1,000,000 worth of volume each way. That is making bank!

In the high value case things get optimally bad. Both Mark and Mak need to bring $1,000,000 to the market in order to support the liquidity needs of a single payment. Its worth if they don't know the which direction's payment will happen first. All that money has to sit in the market waiting for that single payment. That is why its called "trapped cash".

 

They are absolutely not a secret, but most people fail to see it or completely underestimate the value.

  1. Multi-party atomic (synchronized) payments
  2. Instant settlement

I'm kind of tired now, but I'll happily do a thread or a book about what makes these so important to the future of money.

 

Nope, should I look into it?

 

 

It certainly is a good idea being implemented to help the casino gaming community.

 

And pretty cheap to buy currently around $0.000225 per coin.

Lots more information about it at cscchat.com 

 

Still a company in the early stages of development and adoption.

 

They are full of industry experts with a similar approach that has served Ripple so well, that being  an eye on serving and services towards compliance and regulations.

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6 hours ago, BobWay said:

I do understand Codius. I'll start a thread to talk about it in the appropriate form when this thread dies down enough for me to get out of my chair.

But just to get you started, you probably know that Stefan, Ben, and Peter founded a new company called Coil. What you probably don't know is that the name Coil was Ben's idea. It is a contraction of "Codius" and "ILP".

Is that Peter Kray III? Very interesting.  I have many questions about Author specifically, but I’ll follow your lead and respect his privacy (he’s too interesting).

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4 hours ago, BobWay said:

That looks like an attempt at arbitrage. Or at least an attempt to exploit mismatched pricing. They might be doing that regularly just in case. Notice the following things:

  1. The sending and receiving addresses are the same. That makes this a circular payment.
  2. The currencies are different. It spends XRP in exchange for receiving XCN
  3. The partial payment flag is set. This is a trick that says if you can't send it all, send what you can at this price
  4. There are a bunch of different paths set that bounce through different currencies

This transaction cost them 11 drops for it to fail. But perhaps they are checking to see if pricing is out of whack on one or more of those paths. If so, they might have net a few XRP.

So... a sort of automatic arbitrage.  Interesting.

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Posted (edited)
12 hours ago, BobWay said:

I don't have specific information to say "it will happen because of this, that or the other thing".

But there is a "this", "that" and "other" thing? Please elaborate... /troll

I had to, sorry.

Edited by RippleEvangelist
And welcome Bob!

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5 hours ago, BobWay said:

It's been a long day typing. I don't think this is a particularly clear answer. If you think it's lacking let me know and I'll try to be clearer tomorrow. ^_^

Thank you. This answer is clear in conceptual terms: the atomicity of the XRP ledger is the key difference, the ripple daemon knows all liquidity paths on the ledger and finally the ILP enabled products allow for real world implementations. 

I think if we keep this thread going you will have written a book unknowingly.  :biggrin:

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Dear @BobWay, I am having a fan boy moment thank you!

 

On a serious note I would like to thank you for all the invaluable information you have shared with us. It is amazing to see the sheer ammount of work and effort you and all your colleagues have put into Ripple.

I don't want to bombard with questions but just pass on sincere respect for your time.

I hope you have been invited to the Zerpening as you will enjoy the company I think.

:)

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7 hours ago, BobWay said:

I have used bithomp!

If you look there you see that ~bway was activated by ~reddog. That account is original Ripple account and it was funded by JoelKatz. If you look in the ripple forums you'll see the ~reddog address linked to the forum account (Red).

I used ~reddog to experiment with personally.  ~bob was used for Ripple business mostly. You'll see that account activating a lot of other accounts. That was part of my duties as the original integration engineer.

You'll notice the the ~reddog account has GDW balance. GDW stand for "goodwill" it was the first (and maybe only) Local Exchange Trading System (LETS) implemented entirely on the Ripple ledger. I created goodwill to explain the LETS concept to the rest of the community before I started working for Ripple.

GDW is a counterparty free currency. However, according to this it looks like the bookkeeper is out of balance. If I get bored I'll try to figure out why.

Thank you for your detailed answer!

Was this goodwill lets created only for testing or was it in use for some time? I think I saw another lets on ripple, don't remember the name. something related to "time" or "work hour", so people were paying in hours to each other. It was another one, where people could pay with "coffee cups" currency :) 

Did you work with Ryan Fugger?

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