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16 hours ago, BobWay said:

I said, "Time is always working against Ripple and everyone else as well." Meaning I, personally, am older and everyday closer to death.

For companies that means, "you snooze, you lose."  Either you execute ASAP or someone else will beat you to your goal.

So Ripple's great execution means, "Time is working against, Stellar/IBM, Bitcoin, Etherium, etc. as well."

Sorry to wax philosophical.

I love this, after all, "our" team is not exactly standing still lol

giphy.gif

 

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6 hours ago, rippCurrent said:

Thank you for the answer @BobWay, here is the video where that quote is from.  Not that it makes any difference, but dont want it to look like i made that up out of thin air.  Minute mark 53:20 is when he starts talking about how policy is holding XRP back.  I do understand though how customers will be able to use xrp without ever even touching it through multi hop and such, but would be a lot easier and drive faster adoption if we could just get some damn clarity.  

Thank you very much for this video reference! It was very helpful to me for context.

First, I'm not about to argue with Zagone. Ryan is scrupulously honest in everything he says. I wouldn't say we were the closest of friends at Ripple. He worked in NYC and I didn't so we didn't get as much opportunity to interact as I very much would have liked. But still, I knew him closely enough to know it would be personally credibility suicide to contradict him.

So let me say, "I stand corrected." Ryan and Ripple both believe that they need regulatory clarity to move forward at maximum speed. If they believe it, then it is true.

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Now, I am not a lawyer, but let me speculate on what that clarity might be. I don't usually want to speculate, but here I think I'm close enough that what I'll say will be helpful to you.

I'm guessing the clarity is based around the Howey Test. 

Quote

The "Howey Test" is a test created by the Supreme Court for determining whether certain transactions qualify as "investment contracts." If so, then under the Securities Act of 1933 and the Securities Exchange Act of 1934, those transactions are considered securities and therefore subject to certain disclosure and registration requirements.

As I've said elsewhere, regulations constrain what people do, they don't necessarily constrain the technology being used. The main confusion comes because XRP the asset is, in the media and gossip, so closely tied to Ripple the company. So, in my speculative view, I believe Ripple is more concerned with how regulators will judge the actions of the company, rather than with any technical detail in and of itself.

So one helpful step, as Ryan suggested, would be for regulators to acknowledge that XRP as an asset, is just like BTC as an asset, when both are used in similar ways for similar purposes. This would remove all unnecessary conflation between the actions of the company and the actions of the users of the XRP asset. Specifically, your use of XRP for legal purposes is not tied to the behavior of Ripple the company.

I agree, that would be very helpful. But I also think that enough lawyers of companies that want to use xRapid or otherwise want to buy and use XRP as they would BTC, see their company behavior as being absolutely out of any grey areas in this regard. And I think those companies are ready to go and provide enough volume for XRP as a bridge currency to start building toward its final success.

Let's talk about Howie a little more.

As Ryan pointed out, the consensus is that BTC and ETH are not securities. This is true because no company or venture ever promoted and sold them as such. But say Satoshi returned, and decided to sell his vast holdings of BTC by saying,

  • "Hey everyone, buy these BTC from me now because you are going to see a huge profit based on the work of all these other people in companies in the Bitcoin ecosystem. If you snooze you lose! Better get them now before they go, to the moon!"

Well in that case, Satoshi would be selling unlicensed securities, even though BTC still isn't considered a security in and of itself. Notice in the quote at the top, I bolded the part about business transactions. It is the behavior and transactions that are constrained by the Howie test. Not the assets themselves.

The actual test:

  1. It is an investment of money
  2. There is an expectation of profits from the investment
  3. The investment of money is in a common enterprise
  4. Any profit comes from the efforts of a promoter or third party

In my personal opinion, Ripple has never said or done anything even close to being constrained by the Howie test. However, in the recent ICO boom, many coin issuers did. Some clarity on behavior which separates Ripple from the later group certainly wouldn't adoption either.

 

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3 hours ago, BobWay said:

Thank you very much for this video reference! It was very helpful to me for context.

First, I'm not about to argue with Zagone. ...

[Bob's edit: snipping the unnecessary.]

HI Bob, 

Thank you for all of your contributions! I have really enjoyed reading all of your input. 

Do you think the XPring initiative will help determine that XRP isn't a security? Was this a primary reason for why Ripple decided to launch XPring?

Thanks again for your thoughts

Edited by BobWay
truncated quote for brevity
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16 minutes ago, ZerpEnthusiast said:

Do you think the XPring initiative will help determine that XRP isn't a security? Was this a primary reason for why Ripple decided to launch XPring?

Quick note: I find the Xpring spelling more confusing than necessary. This is pronounced, "Spring" rather than X-Pring.

No, the two are unrelated.

There are teams within Ripple working on regulatory issues. (We just talked about Ryan Zagone above.) But the Xpring team isn't tasked with that.

Xpring explains: "Our objective is to build a robust community of developers, entrepreneurs and companies who believe that blockchains, and the XRP Ledger in particular, will transform industries."

The way I understand it is that Xpring could help any external team working on a project unrelated to the core bits of RippleNet. The rest of the company is focused on that. Quite simply, it is an attempt to get more people doing more things in parallel.  

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41 minutes ago, tony71 said:

@BobWay Once SEC says XRP is not a security, do we know how quickly thing can start picking up?

I can't really predict. But it quickly gives existing RippleNet members new options. For example, members currently transaction fiat to fiat, could be encourage by the news. In a best case, it shouldn't take much effort to reroute their current transaction flow through XRP if that path turns out to be cheaper.

But keep in mind, I expect there is also a bunch of liquidity work to be done to make existing XRP markets viable for most banking transaction. If you look at the Monthly Statistics page from Fedwire, you'll see that the AVERAGE payment size is over 4 million dollars.

What would that do to the current thinly traded XRP markets?  Well in my view, nothing at all. Because nobody would try it as I see discussed around the internet. It would be quite absurd.

Say you wanted to send $4 million to Philippine Pesos.

  • Buy $4 million of XRP from the XRP/USD book would spike the price, costing the sender way more than the listed price.
  • Sell $4 million of XRP on the XRP/PHP book would crash the price, resulting in less than the listed delivery amount.

The math simply doesn't work to do that. It would be WAY more costly to send than the existing pathway, so RippleNet wouldn't take it.

No note, as David said, it is possible to move 4 million through the current markets. You would just have to break it up into smaller amounts like Coils streaming payments do. (Well not that small) But that would take time, making it much less Instant.

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45 minutes ago, BobWay said:

Quick note: I find the Xpring spelling more confusing than necessary. This is pronounced, "Spring" rather than X-Pring.

No, the two are unrelated.

There are teams within Ripple working on regulatory issues. (We just talked about Ryan Zagone above.) But the Xpring team isn't tasked with that.

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Thanks for the response. I'm trying to think of a better way to ask my question. I understand that Spring doesn't directly handle any of the regulatory issues, but do you think the fact that other companies and projects are building around XRP will help prove that it's not a security? 

Hope that makes more sense. 

Edited by ZerpEnthusiast
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9 hours ago, ZerpEnthusiast said:

Thanks for the response. I'm trying to think of a better way to ask my question. I understand that Spring doesn't directly handle any of the regulatory issues, but do you think the fact that other companies and projects are building around XRP will help prove that it's not a security? 

I'd like to just say, "Sure I think everyone using XRP for different creative things, will prove XRP is not a security. That will clear the way for everybody." That sentence would be so much easier to say in this forum and in tweets.

And in fact as it relates to my comments on Ryan's point on usage...

14 hours ago, BobWay said:

So one helpful step, as Ryan suggested, would be for regulators to acknowledge that XRP as an asset, is just like BTC as an asset, when both are used in similar ways for similar purposes. This would remove all unnecessary conflation between the actions of the company and the actions of the users of the XRP asset. Specifically, your use of XRP for legal purposes is not tied to the behavior of Ripple the company.

...I do think you are right. The more people who are using XRP for obviously non-security related reasons, the easier it is to separate the asset from bad behavior.

----

But I don't think that solves the broader problem Ripple the company has.

For example, say I had 100 toasters. Each is serialized and perfectly good at making toast. In fact you might want to make toast every day and feel need a toaster. So I think everyone would agree that a toaster is not a security. Well... because it is a fricking toaster.

But if I decided to try and sell the toaster to you by saying, "Hey, this toaster is better than your ordinary toaster. It is a limited edition serialized toaster. There is a team of people promoting these toasters all over the world, we are building a huge business making toasters over the next few years. But these will be the only limited edition serialize toasters we make. So if you buy this toaster, expect its value to skyrocket as these toasters become famous. In fact, we are working to make them so coveted in the near future, that to preserve its highest future value, you probably shouldn't even open the box." And you are totally convinced, so you buy the toaster. 

Then almost certainly, I could be charged with selling an unlicensed security. What I did clearly falls in violation of the Howie test.

  1. I convinced you to make, an investment of money
  2. I gave you an expectation of profits from the investment
  3. I told you lots of people were working together in a common enterprise
  4. And you expected to profit from the efforts of a promoter or third party

So you can be charged with making something that is clearly not manufactured to be a security, into a security just by how you try to sell it.

And from what I've read on the internet, that is what I hear some people are alleging. I never saw any behavior to suggest that is true.

 

But if you are a bank signing contracts to join RippleNet, then perhaps you want better assurances than simply, "Trust Bob".  My gut tells me that could be the bigger issue Ryan would like clarity on. Many ICO promoters did just what I described. It really doesn't matter what the properties of their coin is/are/were, it was the way they promoted the coins that put the promoters in violation. A coin can't be found in violation. It's just a coin. And in fact, its just a coin that doesn't even exist.

 

Edited by BobWay
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