Implications of ILP

[Mpolnet]

Apologies if this has been discussed in the past. My previous understanding was the ILP sourced the fastest digital asset as a bridge currency for cross ledger transactions, which for the time being would be XRP. Is this still the case (or was it ever the case) that this is how ILP functions fundamentally? Or should ILP and XRP be viewed independently of one another - meaning if adoption of ILP outpaces XRP, there won't be a large impact on the usage of XRP?

Edited September 4, 2019 by Mpolnet

[ADingoAteMyXRP]

9 minutes ago, Mpolnet said:

My previous understanding was the ILP sourced the fastest digital asset as a bridge currency

Sort of...  but it's not a race between ILP and XRP.

ILP is simply a method to internetwork between different ledgers. It's like an internet for payments.

In an ILP future, if you're trying to make a payment, the network will pick the most efficient path available for that value flow depending on what value you have and the type of asset the recipient is requesting. In the future, if XRP is the global bridge asset, it will often be XRP. But if you're paying USD to someone else who wants USD, or paying USD to EUR (a highly liquid corridor already), then there may be a cheaper way to facilitate that payment across bank connectors without XRP.

The idea behind ILP is that there will be many winners in the space. XRP will be best-positioned to take a large share of global ILP payments though, not just because it's a bridge asset, but due to its speed, throughput, and instant global reach. Governments will also be competing with CBDCs but it's left to be seen if they'll allow overseas transactions with digital fiat.

[Mpolnet]

3 minutes ago, ADingoAteMyXRP said:

In an ILP future, if you're trying to make a payment, the network will pick the most efficient path available for that value flow depending on what value you have and the type of asset the recipient is requesting. In the future, if XRP is the global bridge asset, it will often be XRP. But if you're paying USD to someone else who wants USD, or paying USD to EUR (a highly liquid corridor already), then there may be a cheaper way to facilitate that payment across bank connectors without XRP.

This is exactly what I was looking for. Thank you!

[Guest]

1 hour ago, Mpolnet said:

This is exactly what I was looking for. Thank you!

Yes it’s a very good explanation.  

Something to also consider is that ILP was created at Ripple.  It was created because they felt a need existed for this basic layer of a digital payments system.  And that system needed to exist if XRP is to be used as intended.

So they viewed it as similar to what SMTP did for email,  but this time for payments.  They gifted it to the world because only then can it be used by everyone as that bottom layer.

Now when they conceived of the idea and when Stefan created it,  they were FULLY aware that it is currency agnostic.  It will utilise whatever has the cheapest available path.  They were actually worried about this because it wasn’t an XRP lock-in.  

They looked at the product and worried and considered for a full year before releasing it.  

Eventually they concluded it was a necessary component of the InternetOfValue and that it creates a level playing field...   and that XRP should do well in such a situation.  So they released it and now as the rails are being put in place it does look like XRP can shine on that level playing field.

 

[pucksterpete]

6 hours ago, Mpolnet said:

Apologies if this has been discussed in the past. My previous understanding was the ILP sourced the fastest digital asset as a bridge currency for cross ledger transactions, which for the time being would be XRP. Is this still the case (or was it ever the case) that this is how ILP functions fundamentally? Or should ILP and XRP be viewed independently of one another - meaning if adoption of ILP outpaces XRP, there won't be a large impact on the usage of XRP?

Maybe you have seen this    

https://www.ripple.com/insights/speed-and-cost-of-payments-dont-need-to-be-at-odds

[Mpolnet]

9 hours ago, pucksterpete said:

Maybe you have seen this    

https://www.ripple.com/insights/speed-and-cost-of-payments-dont-need-to-be-at-odds

Yes, this article led led to the need for a refresher so figured I pose the question here. Thanks @Tinyaccount for the feedback as well. @ADingoAteMyXRP thanks as well - that info was exactly what I was looking for. Just trying to come up with my own assumptions around how beneficial ILP will be on XRP demand.

[dr_ed]

Good thread  y'all. Thanks.

[Mpolnet]

ILP will be huge. Imagine the implications if services like Send Friend or MoneyTap integrate with Skype or FaceTime and allow real time money transfers while you're talking with your loved ones back home. So many potential use cases it's hard to fathom what can be done with this tech.