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Is it too late for banks?


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Hi everyone!

I have been in XRP since 2014 and have sold everything last year to get back recently with a similar position. The reason I came back is that I don't believe there is a clear winner between Defi and the banks adapting to this new world of crypto assets.

However, while I was gone I went into the Etherum ecosystem and played a lot on Polygon with Quickswap and AAVE. What I experienced there were fast transactions at low costs. Now that I have experienced this and with the development of Layer 2 solutions and ETH 2.0 I was questionning myself if it was too late now for banks. As a matter of fact, even one of the last hurdles to me, mortgages issued in smart contract, could be easily done with NFT's and private company that take these NFTs as collateral.

I was just curious as to what have been your own experiences on different blockchains and why you think being invested in XRP is still good for you.

 

 



 

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That is a really interesting observation.  I suppose one answer is that XRP approach is different in being focused on cross border payments system using ODL, Ripplenet and pools of liquidity strategically placed around the world with lots of KYC and AML algos in place.  Also a lot of thought being given to integrating with FX APIs and trading, delivering money into the pockets of people in far flung un-banked regions of the world.  To me it still looks like a winning hand.

Added to this is FLR which is building out on the XRPL and clearly integrated with the XRP ecosystem.  From what i understand this development will help XRP catch up and overtake the features of ETH and, NFTs and Defi.

You make another point about banks, and whether they will miss out.  I think they will inevitably have to break up in specialist units, work with crypto or die. But that will surely not happen vey fast because 99% of the world use banks and are not really interested in changing their patterns of living yet. 

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10 minutes ago, yxxyun said:

maybe XRP is too late to enter the NFT & DEFI world.

I don't think so.  XRP is one of the best commercially connected teams in crypto space.  These services will be parts of suits of products provided to Ripplenet and FX services and the XRPL.  Defi and NFT are very nascent underdeveloped markets and FLR (unlaunched) is going after them too.

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4 hours ago, Harfang said:

Hi everyone!

I have been in XRP since 2014 and have sold everything last year to get back recently with a similar position. The reason I came back is that I don't believe there is a clear winner between Defi and the banks adapting to this new world of crypto assets.

However, while I was gone I went into the Etherum ecosystem and played a lot on Polygon with Quickswap and AAVE. What I experienced there were fast transactions at low costs. Now that I have experienced this and with the development of Layer 2 solutions and ETH 2.0 I was questionning myself if it was too late now for banks. As a matter of fact, even one of the last hurdles to me, mortgages issued in smart contract, could be easily done with NFT's and private company that take these NFTs as collateral.

I was just curious as to what have been your own experiences on different blockchains and why you think being invested in XRP is still good for you.

 

 



 

Till the day I can use my crypto as efficiently and as easily as fiat in the real world Banks are here to stay. No matter how efficient and forward looking crypto technology is if at the end of the day you need to convert back to fiat to use it then banks are not going anywhere.

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Posted (edited)

Banks have something crypto doesn't have on it's side right now regulation and deep connections in high political places.  I believe the narrative is about to change in the banks favor.  A lot of these banks will become exchanges also and a lot of exchanges will be regulated out of existence and the larger exchanges will become banks or institutions with a banking license to stay alive

Edited by RikkiTikki_is_Back
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1 hour ago, RikkiTikki_is_Back said:

Banks have something crypto doesn't have on it's side right now regulation and deep connections in high political places.  I believe the narrative is about to change in the banks favor.  A lot of these banks will become exchanges also and a lot of exchanges will be regulated out of existence and the larger exchanges will become banks or institutions with a banking license to stay alive

I think you're right. Another point in the favor of banks is trust. I wonder how many people are interested in jumping into the crypto space but end up asking themselves "what the hell is Coinbase and Binance? And these people want all of my most sensitive data just to sign up? No thanks." I think as soon as retail banks begin to offer crypto services (right after clear regulation comes into effect), most of the exchanges we use today will be left in the dust.

Even though I've been in this space for years, I still don't feel quite right providing all of my info to these exchanges. I still do it because I don't want to miss my opportunity, but I see it as a risk. As much as I dislike banks in general, I would simply feel more comfortable trading through an established institution even if it meant higher fees because I try to leave as small a digital footprint as I reasonably can. And I know I'm not alone.

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7 hours ago, yxxyun said:

maybe XRP is too late to enter the NFT & DEFI world.

I agree with the NFT part. XRP is rather late to get on the Digital Art / Music NFT train. I think they would be better served going after other aspects of tokenisation that are more formal and/or require more regulation or real-world connection, such as real estate. 

As for DeFi, I don't think so. DeFi is where crypto was 6 or 7 years ago, complete wild west. Ethereum does not have it locked down by any means. 

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10 minutes ago, efFofexX said:

I think you're right. Another point in the favor of banks is trust. I wonder how many people are interested in jumping into the crypto space but end up asking themselves "what the hell is Coinbase and Binance? And these people want all of my most sensitive data just to sign up? No thanks." I think as soon as retail banks begin to offer crypto services (right after clear regulation comes into effect), most of the exchanges we use today will be left in the dust.

Even though I've been in this space for years, I still don't feel quite right providing all of my info to these exchanges. I still do it because I don't want to miss my opportunity, but I see it as a risk. As much as I dislike banks in general, I would simply feel more comfortable trading through an established institution even if it meant higher fees because I try to leave as small a digital footprint as I reasonably can. And I know I'm not alone.

Not at all, definitely one reason I don't leave any crypto on an exchange, if it were a bank and functioned under banking rules I would probably do so as i am really not to particular about holding my assets on a hardware wallet either but that is my best choice at the moment.

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7 hours ago, Harfang said:

mortgages issued in smart contract, could be easily done with NFT's and private company that take these NFTs as collateral.

At first glance, I'd say "no" mortgages cant be done with crypto. Primarily because mortgages are one of the biggest methods of expansionary monetary tools that exist, expanding the money supply with each loan. 

But then you brought up NFTs which could theoretically represent an expansion of the money supply, I guess. But then that also begs the question "how do you do Collateralized Mortgage Obligations with NFTs?" Or even simpler that that, how do you do Strips on an NFT... I think the answer is, you cant. 

NFTs lack the ability of bifurcation, and that makes then wholly unsuitable for things like real estate, loans, and other cash flow instruments that benefit from being split up / bifurcated.

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12 minutes ago, KarmaCoverage said:

NFTs lack the ability of bifurcation, and that makes then wholly unsuitable for things like real estate, loans, and other cash flow instruments that benefit from being split up / bifurcated.

Think people are confusing NFTS with tokenisation.

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Posted (edited)
2 hours ago, KarmaCoverage said:

NFTs lack the ability offurcation, and that makes then wholly unsuitable for things like real estate, loans, and other cash flow instruments that benefit from being split up / bifurcated.

This reminded of the auction coming up in a few days for Michael Arrington's (of Arrington XRP Capital) apartment in Kiev. After it's done, the winner receives an NFT that transfers real ownership of the property.

https://www.businesswire.com/news/home/20210525005839/en/Propy-Auctions-World’s-First-Real-Estate-NFT-with-Ownership-Transfer

To your point though, it sounds like the NFT simply represents ownership of the standard documents that also still exist in the real world, and there's no loan involved. That being said, it looks like they will be trying to use NFTs for mortgages. A quote from that article:

"It is very exciting to push the innovation and use cases around blockchain technology and real estate. This NFT proof of concept can continue to develop even larger utility inside the DeFi realm, to enable collateralized loans and p2p mortgages."

It'll be interesting to see how this plays out long term.

Edit: After reading more, it turns out the NFT doesn't even transfer the property ownership documents at all. Instead, it transfers ownership of a Delaware-based LLC that exists solely to own this one property.

"In the current legal environment, title deeds cannot be directly represented by a token, but legal entities can. The apartment is owned by a Delaware Limited Liability Company (LLC). The LLC is “tokenized into” a specific NFT and made available for purchase."

"Each sale of an NFT will effect a complete, self-contained transfer of rights to acquire full membership in the LLC, which owns the property."

Pretty interesting workaround there.

Those two quotes came from the FAQs near the bottom of this page:

https://propy.com/browse/propy-nft/

Edited by efFofexX
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Posted (edited)
2 hours ago, efFofexX said:

"In the current legal environment, title deeds cannot be directly represented by a token, but legal entities can. The apartment is owned by a Delaware Limited Liability Company (LLC). The LLC is “tokenized into” a specific NFT and made available for purchase."

I've tweeted at Propy & Arrington about this, but they are going to run into a very solid brick wall backed up by a well established suite of patents owned by a man named Michael. I may call him tomorrow, been thinking about reaching back out to him as I've been watching Propy.

He owns the patents for both putting real estate titles into a database, and the bifurcation of those rights in the US. I made him aware of XRPL and some of my early thoughts around applying XRPL to real estate several years ago. He resubmitted his key patents "post Alice" case and included "distributed databases". So AFAIK, he has a lock on this and wont sell out.

These real estate NFTs look like a simi misguided attempt at what otherwise makes sense.

Liquidity Risk needs to be addressed in the real estate market and it's complicated, but very very necessary to improve the market's infrastructure. Its no joke.

It was my pre XRPL work on creating a market for real estate rights that originally attracted me to XRPL as a tool. IMHO XRPL is a well suited tool for real estate if configured properly (pun intended).

Edited by KarmaCoverage
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5 hours ago, KarmaCoverage said:

I've tweeted at Propy & Arrington about this, but they are going to run into a very solid brick wall backed up by a well established suite of patents owned by a man named Michael. I may call him tomorrow, been thinking about reaching back out to him as I've been watching Propy.

He owns the patents for both putting real estate titles into a database, and the bifurcation of those rights in the US. I made him aware of XRPL and some of my early thoughts around applying XRPL to real estate several years ago. He resubmitted his key patents "post Alice" case and included "distributed databases". So AFAIK, he has a lock on this and wont sell out.

These real estate NFTs look like a simi misguided attempt at what otherwise makes sense.

Liquidity Risk needs to be addressed in the real estate market and it's complicated, but very very necessary to improve the market's infrastructure. Its no joke.

It was my pre XRPL work on creating a market for real estate rights that originally attracted me to XRPL as a tool. IMHO XRPL is a well suited tool for real estate if configured properly (pun intended).

 

Sounds as if the patent it is worth billions.  Do this patent extend to Europe and the rest of the world? You should be working as a team building the rail lines.

I remember in 2018 learning that land registries were a use case for blockchain.

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