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XRP Bridge Currency Diagram: 28 pairs down to 8?

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In the paper, "Building Network Effects on Ripple", found here https://ripple.com/files/ripple_vision.pdf, they give an example of a liquidity provider having to quote up to 28 currency pairs on page 5, first image attached. I think I understand what's going on there, though maybe I'm being nit-picky and can't count but shouldn't it be 30 pairs?

But regardless on page 6, they show how by using XRP as a bridge currency (second image attached), the liquidity provider can accomplish the same thing by only quoting 8 pairs. I've been trying to figure this out but, what are those 8 pairs they are referring to that can bridge all six different currencies in the example?

Screen Shot 2017-06-23 at 12.26.58 PM.png

Screen Shot 2017-06-23 at 11.55.35 AM.png

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To simplify imagine 3 banks: A-B-C

Here are all the connections you'd need:

  • A-B
  • A-C
  • B-C

you get this with: n*(n-1)/2; n being the number of banks...

Regarding your second point I guess it's one pair between each bank and XRP... even if two banks use the same currency.

Edited by BlackRainbowFT
typo

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1 hour ago, tulo said:

And in the second figure the pairs are all the FIAT vs XRP. 

Agreed, the bottom (XRP) graphic has an additional step which is not emphasized in the way it is illustrated.

The top graphic (correspondent banking system) has the same flaw though. Cross-border payments are not always direct (bank to bank). They often go through multiple banks which further complicates the model.

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14 minutes ago, Xi195 said:

Agreed, the bottom (XRP) graphic has an additional step which is not emphasized in the way it is illustrated.

What additional step are you referring to? USD --> XRP --> BRL?

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1 hour ago, tulo said:

And in the second figure the pairs are all the FIAT vs XRP. 

So there should be 6 pairs correct? The pdf for some reason says 8, that's why I was confused. Also for the top image, should it not be 30? 6 permute 2? 

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5 minutes ago, deep_dive said:

What additional step are you referring to? USD --> XRP --> BRL?

Yes. Whereas the bottom image is fiat to fiat.

To revise my comment though, I should say that it's easy to miss the fact that XRP requires an extra step if you're not familiar with the technology. I don't think the graphic is in any way misleading.

If anything the top graphic is likely grossly oversimplified (for good reason). I read somewhere that single banks often hold multiple accounts in the same fiat to facilitate the liquidity of different departments. 

While the cost difference of the actual payment may be nominal, the increased speed, decreased float, instant liquidity access, limited counter-party risk, and jurisdictional neutrality offered by XRP are becoming an increasingly compelling solution to banks.

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Yea, instead of each bank having to talk to each other, you talk to XRP, and XRP's like, I got you bud

 

There's no other asset in the world thats got you like XRPs got you

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On 6/23/2017 at 9:41 AM, BlackRainbowFT said:

To simplify imagine 3 banks: A-B-C

Here are all the connections you'd need:

  • A-B
  • A-C
  • B-C

you get this with: n*(n+1)/2; n being the number of banks...

Regarding your second point I guess it's one pair between each bank and XRP... even if two banks use the same currency.

it's:  n*(n-1)/2  

 

 

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