Answer: Benefits of Banks holding XRP

[Guest]

Hey bob, Can you explain what benefits a bank would get if they wanted to hold XRP instead of leveraging xRapid?

is that what PolySign is for then?

Edited March 12, 2019 by Guest

[stuartXRP]

8 minutes ago, AlexCobb said:

Hey bob, Can you explain what benefits a bank would get if they wanted to hold XRP instead of leveraging xRapid?

is that what PolySign is for then?

If a bank was holding XRP they could use it for Lending and Borrowing, increasing demand perhaps ? 

[BobWay]

I split this from Chat: General, mostly because I just had steak for dinner again and I feel chill. By the way, if you wife ever suggest you should move to a Keto Diet, do it!!! 

This is question I'm sure everyone is interested in. I'm happy to answer it and then take a nice nap. !

----

I've written elsewhere about this, but it is pretty hard to grok so I don't mind saying it in different ways until everyone is comfortable with the concept.

1. (Alice) ------o (Bank A) o------(Mark) ------o (XRP) o------ (Mak) ------o (Bank B ) o------(Bob)
2.              MXN                       MXN / XRP                          XRP/PHP                         PHP
3.                            fee                   fee                                       fee                  fee

Description of above line by line

1. Line 1 represents accounting relationships between the parties to this payment.
   • Alice holds MXN in an account '----o' at Bank A.  (MXN = Mexican Pesos)
   • Mark has an account 'o----' at Bank A
   • Mark has an XRP account on the XRP Ledger (in addition to his MXN account)
   • Mak  has an XRP account on the XRP Ledger
   • Mak  has a PHP account at Bank B
   • Bob  has a PHP account at Bank B
2. This line shows that Mark and Mak are the traders providing liquidity to complete the end-to-end payment.
   • Mark sells XRP in exchange for MXN
   • Mak  buys XRP in exchange for PHP
3. Because this payment uses both Mark and Mak's liquidity, they each get to take a fee
   • Mark's limit order set the price for converting MXN to XRP
   • Mak's  limit order set the price for converting XRP to PHP
   • The "fee" is logically equal to half the spread in each respective market
   • Also Bank A and Bank B can charge payment fees to Alice and Bob respectively

So let's pretend we are accountants. To make the payment from Alice to Bob happen

• Bank A
  • debits Alice
  • credits Mark
• XRP Ledger
  • debits Mark
  • credits Mak
• Bank B
  • debits Mak
  • credits Bob

The goal of an atomic transaction is to make sure:   (here atomic transaction is being used in the database sense)

• either all three of those debits and credits happen
• or none of those debits and credits happen at all

A multi-party, atomic transaction that results in Alice being debited if and only if Bob is credited is known as a rippling payment.

------

But I still haven't answered the question...

So let's draw the case where Bank A hold XRP.

1. (Alice) ------o (Bank A) -------------------------o (XRP) o------ (Mak) ------o (Bank B ) o------(Bob)
2.                     MXN / XRP                                                   XRP/PHP                        
3.                   fee + fee                                                               fee                  fee

By holding XRP, Bank A now gets to claim both the payment transaction fee, plus the currency conversion fee. And Mark is cut out of the transaction.

[BobWay]

39 minutes ago, stuartXRP said:

If a bank was holding XRP they could use it for Lending and Borrowing, increasing demand perhaps ? 

Sure, but now doesn't that change your perception about what XRP is?

When I continue the conversation on accounting, I think some people's mind may be blown. 

[dr_ed]

Moar steak for Bob!

(Eddie goes to heat up a pile of Ikea meatballs)

[BobWay]

Oh yes, the really important things I'd like everyone to understand and internalize:

1. is that it is possible to every accounting relationship on line (1) directly on the XRP Ledger. The XRPL is NOT just for XRP. It can do proper accounting for any currency. Even a new one that is completely made up from scratch.
2. that the XRP Ledger executes multi-party, atomic transactions natively. You don't need to integrate with any other accounting system.
   1. So as I wrote above, these end-to-end transactions are called, rippling payments
   2. And that's why the system as a whole was originally called Ripple

 

[stuartXRP]

14 minutes ago, BobWay said:

Sure, but now doesn't that change your perception about what XRP is?

When I continue the conversation on accounting, I think some people's mind may be blown. 

 XRP brings liquidity, Fast and secure. The best digital asset ever made

 cant Wait 

[GregZade]

Hi Bob, 

 

I know you have mentioned this a few times already however wanting to pin you down further than you have been on the question of short term and long term. Hope i can articulate to you correctly so that we can talk freely about whether it will take months or years.

Possible to talk in terms of probabilities? Understanding that at any given moment original outcomes can change at any given moment and not hold you responsible/accountable in any shape or form if your probabilities and tradrictory do not come to fruition. 

In the short term would it be fair and reasonable given the current climate regarding the price of XRP and the tradrictory that until the tracks are laid down (regulator clarity are in place) price movement will be only volatile spikes and nothing more? how far down the road are we regarding regulative clarity? If there's regulator clarity in place would this not speed the process in the price of XRP? knowing there are other forces at work when discussing XRP prices...Same question regarding to long term tradrictory. Hope my question is somewhat phrased so that it's not nonsensical.

 

 

[Julian_Williams]

Who are your target audience for your book?  Are you trying to introduce ideas about what the future might look like in light hearted amusing way to people who have no knowledge of crypto and XRP, or are you wanting to provide XRP chat types with a reference book about the history of XRP and your part in the story so far?? 

Have you a format, perhaps titles for dividing the book into sections? 

 

[UncleMikey]

17 minutes ago, Julian_Williams said:

Who are your target audience for your book?  Are you trying to introduce ideas about what the future might look like in light hearted amusing way to people who have no knowledge of crypto and XRP, or are you wanting to provide XRP chat types with a reference book about the history of XRP and your part in the story so far?? 

Have you a format, perhaps titles for dividing the book into sections? 

 

Yes, @BobWay...a better understanding of the direction you’d like to go with your book (best seller, academia, etc.) would make it easier for us to help you. I’ve made a few suggestions, that could be useless if I’m assuming a different audience than you’d like to target. 

[ADingoAteMyXRP]

1 hour ago, BobWay said:

Sure, but now doesn't that change your perception about what XRP is?

When I continue the conversation on accounting, I think some people's mind may be blown. 

Since banks tend to specialize in client-facing financial solutions, my guess is the version of events where Mark and Mak are straddling either side of the market has a pretty short shelf-life...

As long as XRP volatility risk is outweighed by the extra transaction fees, could Bank A and Bank B profit more by simply holding a percentage of their liquid capital in XRP?

 

[FOOD]

 

.

Edited March 13, 2019 by EcneitapLatnem
relocated my general inquiry into..... "general" category.... I am getting smarter everyday!!!

[Guest]

4 hours ago, BobWay said:

I split this from Chat: General, mostly because I just had steak for dinner again and I feel chill. By the way, if you wife ever suggest you should move to a Keto Diet, do it!!! 

This is question I'm sure everyone is interested in. I'm happy to answer it and then take a nice nap. !

----

I've written elsewhere about this, but it is pretty hard to grok so I don't mind saying it in different ways until everyone is comfortable with the concept.

1. (Alice) ------o (Bank A) o------(Mark) ------o (XRP) o------ (Mak) ------o (Bank B ) o------(Bob)
2.              MXN                       MXN / XRP                          XRP/PHP                         PHP
3.                            fee                   fee                                       fee                  fee

Description of above line by line

1. Line 1 represents accounting relationships between the parties to this payment.
   • Alice holds MXN in an account '----o' at Bank A.  (MXN = Mexican Pesos)
   • Mark has an account 'o----' at Bank A
   • Mark has an XRP account on the XRP Ledger (in addition to his MXN account)
   • Mak  has an XRP account on the XRP Ledger
   • Mak  has a PHP account at Bank B
   • Bob  has a PHP account at Bank B
2. This line shows that Mark and Mak are the traders providing liquidity to complete the end-to-end payment.
   • Mark sells XRP in exchange for MXN
   • Mak  buys XRP in exchange for PHP
3. Because this payment uses both Mark and Mak's liquidity, they each get to take a fee
   • Mark's limit order set the price for converting MXN to XRP
   • Mak's  limit order set the price for converting XRP to PHP
   • The "fee" is logically equal to half the spread in each respective market
   • Also Bank A and Bank B can charge payment fees to Alice and Bob respectively

So let's pretend we are accountants. To make the payment from Alice to Bob happen

• Bank A
  • debits Alice
  • credits Mark
• XRP Ledger
  • debits Mark
  • credits Mak
• Bank B
  • debits Mak
  • credits Bob

The goal of an atomic transaction is to make sure:   (here atomic transaction is being used in the database sense)

• either all three of those debits and credits happen
• or none of those debits and credits happen at all

A multi-party, atomic transaction that results in Alice being debited if and only if Bob is credited is known as a rippling payment.

------

But I still haven't answered the question...

So let's draw the case where Bank A hold XRP.

1. (Alice) ------o (Bank A) -------------------------o (XRP) o------ (Mak) ------o (Bank B ) o------(Bob)
2.                     MXN / XRP                                                   XRP/PHP                        
3.                   fee + fee                                                               fee                  fee

By holding XRP, Bank A now gets to claim both the payment transaction fee, plus the currency conversion fee. And Mark is cut out of the transaction.

thanks for the detailed explanation

[Balzerp]

8 hours ago, BobWay said:

By the way, if you wife ever suggest you should move to a Keto Diet, do it!!! 

funny thing you mention. How do you feel on a keto? Anything special you can mention on routines?

I am a cardiovascular postdoctoral research and i have been on an super high fat diet (low carb diet) for the last 3 years. I do however avoid being in ketosis, which i am normally just about two to three weeks over year; mostly when i need to do some week of cleansing. I acutally did a study on my body myself 4 years ago, where i literally rotated from evbery possible diet (from high carbs low fat, to low carbs high fat) from Ornish and Zone (both vegetarian), to the typical body builder diet (high protein, high carbs to low fat) and to Aktins, Paleo and completed a Ketogenic for full 3 months. Found my balance was actually high fat, low carb, but not zero carb. But also it matters substantial which type of fats what we need to put it. And i can tell you for a fact, the majority of scientific community is more lost on nutrition than common/laymen people. That is sad.

i am actually going to start soon a ketogenic project on some of my wortk. There is quite some large potentials to be gain. Happy to get some any input.

Vasco