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Ahbritto: ILP will potentially increase value of XRP as a bridge currency


T8493
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Brianwalden posted interesting question on official forum and ahbritto answered:

ILP allows scalable payments by not requiring the use of the RCL or any particular ledger. This potentially increases the value of XRP as a bridge currency. This is because XRP can be used to bridge more transactions off ledger than on ledger. The more liquidity there is for XRP, the more value it will potentially have. This liquidity does not have to be restricted to the RCL. The more places XRP trades, the more liquidity it will have.

Opinions?

 

Original thread: https://forum.ripple.com/viewtopic.php?f=1&t=15734

EDIT: this is also interesting:

I believe the primary uses case of the RCL is grounding digital assets such as XRP and the primary use cases for XRP are 1) bridge currency, 2) settlement, 3) long term investment, and 4) short term speculation. None of these require the RCL to be primarily used for all the world's payments.

 

Edited by T8493
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Ok, so both Arthur Britto and David Schwartz have described the RCL as grounding XRP and Arthur sees it being used extensively off ledger. Can someone make me a picture of this? Are market makers going act as ILP connectors on transactions between bank ledgers and then use XRP in off ledger trades to get all their funds back in place?

Can someone please explain why you would create a counterparty-less asset and then use it as a couterparty-laden IOU on other ledgers? I can't unknot my brain on this one; am I totally misunderstanding what "XRP can be used to bridge more transactions off ledger than on ledger" means?

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AFAIK XRP can not be used off ledger as bridge, but it sure can be trraded off ledger

No offense, but I'll take Arthur Britto's assessment as more of an authority on this subject than your opinion or knowledge.

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So RCL will be able to monitor off-ledger transactions (and to what degree)? If it can, how is this reflected in RCL price, i.e. via Ripple Charts we can see prices relative to each market due to gateways and their issuances. How does it work when transactions don't occur on RCL but use XRP; does it affect on-ledger price charts? I am just wondering otherwise how people both on and off RCL set prices. Where are they getting their "absolute" XRP price signal from?

Edited by rippledigital
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RCL doesn't need to "monitor" off-ledger transactions or prices. From the perspective of RCL all that would have happened in an ILP payment bridged through XRP is a simple XRP payment between two accounts.

The order books on RCL would not reflect this type of trading. Connectors can set whatever price they choose, but hopefully there will be competition between the connectors connecting any two ledgers.

There isn't an absolute price signal, but even today I don't think there is an absolute signal, the price is slightly different in each of the different markets on RCL.

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