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Bagheera

The reason why XRP will be adopted

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16 minutes ago, Kylo Ren said:

Nice post.  In your opinion, are business partners of Ripple Labs likely to privately buy large sums of XRP from the company in order to guarantee a certain amount of "owned liquidity?"

In part, perhaps yes, however, I think the liquidity of XRP is a direct result of the liquidity experienced by all of the financial instruments that were formerly locked up due to counterparty risk which are now freed up to make gains in other financial channels. Its possible that banks see an opportunity in holding large sums of XRP as an investment simply because there is a limited supply and a massive demand. If you as a bank saved billions per year in costs associated with counterparty risk you would likely continue to implement Ripple solutions and adopt XRp as the risk mitigating mechanism. This in turn promotes liquidity and even more demand for XRP.

As a child I was obsessed with creating the perpetual motion engine. I never achieved that goal, however, I think that Ripple/XRP has come the closest.

 

 

 

 

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Just now, Bagheera said:

As a child I was obsessed with creating the perpetual motion engine. I never achieved that goal, however, I think that Ripple/XRP has come the closest.

 

 

 

 

A perpetuaL motion engine. Really?.. as a child. Interesting!

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41 minutes ago, Bagheera said:

The true risk lies with the possibility that others create a solution that eliminates counterparty risk and surpasses the speed at which XRP presently operates. If you study INTEL and what they did to overcome the competition, they focused on a specific industry (personal PC) and constantly improved the speed at which their semi-conductors worked. Ripple has already eliminated the counterparty risk phenomenon and must now keep focused on two things... 1) Implementing the Ripple network globally across Banking and possibly other FI infrastructures (opportunities that others here have outlined) and 2) keep XRP in the race--i.e., move from 60% time savings to 80% time savings or greater. My degree is not in Physics so please direct your technical questions to our favorite cryptographer.

 

 

 

So do you think all the people saying, oh, yeah, I think Ripple is great as a software company--I just don't like XRP-- are misguided and that, as I suggested, Ripple is doomed without it?

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2 hours ago, Bagheera said:

XRP is the native currency of the Ripple network that only exists within the Ripple system. Not dependent on any third party for redemption, XRP is the only currency in the Ripple network that does not entail counterparty risk and it is the only native digital asset on the Ripple network. Any other digital asset (non-XRP) existing on the Ripple network is a debt instrument (a liability) and exists in the form of a balance which entails counterparty risk. Eliminating this risk is why XRP will be adopted over any other digital asset.

A counterparty risk, also known as a default risk, is a risk that a counterparty will not pay as obligated. Financial institutions or other transaction counterparties may hedge, take out credit insurance or, require the posting of collateral. Offsetting counterparty risk is not always possible because of temporary liquidity issues. Counterparty risk increases due to positively correlated risk factors. Accounting for correlation between risk factors and counterparty default in risk management methodology is not trivial. XRP removes both the counterparty risk and the associated costs 100%.

The elimination of counterparty risk IS the reason why XRP will in fact be adopted by everyone who uses the Ripple network. Notice how Ripple (the company) has been focused on implementing their solution globally in the banking sector and not focusing on the promotion of XRP. Why? Because they don't have to. XRP is to the Ripple network as plasma is to the blood in the human body. Focus your attention on Ripple's ability to implement quickly and broadly across the globe and that will translate into XRP strength and growth.

Disclosure: This information was compiled from secondary sources and summarized for simplicity.

 

Another way to look at this is that XRP is a token that forms part of the core of its "blockchain" (RCL). Just like Bitcoin does on its Blockchain and ETH does on Ethereum. (Nxt and Counterparty also, I think.) None of them have counterparty risk on their own blockchains either.

Counterparty risk sounds better than it really is, IMO. It just means that XRP isn't a debt obligation.

 

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24 minutes ago, Quintree said:

So do you think all the people saying, oh, yeah, I think Ripple is great as a software company--I just don't like XRP-- are misguided and that, as I suggested, Ripple is doomed without it?

Yes, they are misguided. Here is why. XRP is the native currency of the Ripple network that only exists within the Ripple system. Not dependent on any third party for redemption, XRP is the only currency in the Ripple network that does not entail counterparty risk and it is the only native digital asset on the Ripple network. Any other digital asset (non-XRP) existing on the Ripple network is a debt instrument (a liability) and exists in the form of a balance which entails counterparty risk. Eliminating this risk is why XRP will be adopted over any other digital asset.

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4 minutes ago, TiffanyHayden said:

Another way to look at this is that XRP is a token that forms part of the core of its "blockchain" (RCL). Just like Bitcoin does on its Blockchain and ETH does on Ethereum. (Nxt and Counterparty also, I think.) None of them have counterparty risk on their own blockchains either.

Counterparty risk sounds better than it really is, IMO. It just means that XRP isn't a debt obligation.

 

Counterparty risk is why Banks are spending $$$ to mitigate those risks. Take away that risk and you have $$$ to invest/spend on other things (remember the lyrics to the song "If I had a million dollars" by the Bare Naked Ladies?) Their future with Ripple is bright because Ripple has already eliminated the counterparty risk phenomenon and must now keep focused on two things... 1) Implementing the Ripple network globally across Banking and possibly other FI infrastructures (opportunities that others here have outlined) and 2) keep XRP in the race--i.e., move from 60% time savings to 80% time savings or greater. The risk that Ripple faces is that someone else will create a consensus model that can speed things along faster than the 60%. I am not overly concerned about someone inventing a better mousetrap. Ripple has applied itself to building its success through business relationships with many global entities. Many who practice the art of creating IT solutions know that it is the business relationship which drives the adoption of a certain technology. The creation of a groundbreaking technology goes nowhere without business demand/need which can only be expressed and resolved through relationships. Ripple has responded to that demand/need by building a massive relational base with the global banking and FI leaders, hence, they will get the signed contracts with the banks and FI's around the globe.

 

 

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12 minutes ago, Bagheera said:

Yes, they are misguided. Here is why. XRP is the native currency of the Ripple network that only exists within the Ripple system

XRP is the native token of the Ripple Consensus Ledger (RCL) only. Ripple offers multiple proprietary solutions to banks under the Ripple brand that can transact all day long without ever touching RCL or XRP. That was the significance of Interledger. It allows private ledgers to connect without having to go through RCL.

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2 minutes ago, TiffanyHayden said:

XRP is the native token of the Ripple Consensus Ledger (RCL) only. Ripple offers multiple proprietary solutions to banks under the Ripple brand that can transact all day long without ever touching RCL or XRP. That was the significance of Interledger. It allows private ledgers to connect without having to go through RCL.

So do you believe as well with the "multiple proprietary solutions" offered by Ripple that XRP is too good to fail and that something of its sort will eventually be implemented, whether by Ripple or another company?

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Just now, Quintree said:

So do you believe as well with the "multiple proprietary solutions" offered by Ripple that XRP is too good to fail and that something of its sort will eventually be implemented, whether by Ripple or another company?

I think that Ripple has good footing and knows what needs to be done. I don't know what their "solutions" look like, but Ripple is light years ahead of the pack, with brilliant tech, an all-star lineup, and 60+ billion reasons to make XRP the greatest digital asset that has ever existed.

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4 minutes ago, TiffanyHayden said:

I think that Ripple has good footing and knows what needs to be done. I don't know what their "solutions" look like, but Ripple is light years ahead of the pack, with brilliant tech, an all-star lineup, and 60+ billion reasons to make XRP the greatest digital asset that has ever existed.

All right, well, since there are multiple solutions involved, I guess we'll have to wait and see what caliber ammo the banks like..

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25 minutes ago, TiffanyHayden said:

XRP is the native token of the Ripple Consensus Ledger (RCL) only. Ripple offers multiple proprietary solutions to banks under the Ripple brand that can transact all day long without ever touching RCL or XRP. That was the significance of Interledger. It allows private ledgers to connect without having to go through RCL.

Yes, thank you for the clarification on the RCL. Ripple is very effective in that it offers multiple solutions for those at various entry points--i.e., tactical vs strategic options based on business needs. At some point you stop pouring money into repairing an old car and you replace it with one that will cost less to operate (Bank profits). In as much, if a ledger is not a public resource, it will have the pressures incumbent to existing settlement systems in addition to the overhead of maintaining a shared database among competitors. If I run a car repair shop I still fix old cars but I know I had better figure out how to service the Tesla or my business dies. This is OK until the money you spend on mitigating risk starts to prevent you from profiting from those resources. Ripple is many things to many customers, however, where XRP is concerned, it is the the right jockey for the right horse... all bets aside.

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