ESOC Crypto Corner

[Gendarme]

Banks tokens can be used for payment and netting. But they can’t be used to settle without millions of dollars being invested with no way to make revenue from that investment.

How do banks make revenue from XRP?

[cblack]

You sound like someone who bought BTC at $17k and then panic sold it yesterday at $10k.
But I'll play along. Why is XRP a shit "coin"?
Did you read the quote I posted earlier?
Did you even do any research on it at all? Or are you just repeating FUD you picked up at whatever echo chamber you reside in?
Of course, nothing is certain. It's still a risky investment. But it's obvious that XRP, in a sea of coins and tokens with questionable use cases, stands out.

I actually bought Bitcoin three years ago at $80. I've been analyzing crypto and the market in-depth for the past 2 years. No shit I do my research, I was even invested in the coin at one point, when it was just a few satoshis. The fact of the matter is that the Ripple technology is being trialed in the banking space, but there are plenty of coins that have faster payment processors. The developers of these coins also don't hold more than half of the circulating tokens. Did you know that the first 32,000 blocks on the Ripple chain are missing? There's no history for them. It took them getting called out by their own investors to develop a plan to release more of the token on a yearly basis in escrow. They didn't voluntarily do that. It's so funny to me that people really trust the XRP token.

Edit: Not going to waste more of my time educating someone who clearly already thinks they know everything. I will continue to enjoy my 10000x returns I've seen on my two picks from years ago, Litecoin and Bitcoin. Two household coins with proven history and track record.

[Snuden]

Hopefully you will generate LmaoCoin, while laughing.

[Goodspeed]

@Gendarme I don't think they would directly, other than by buying it off of Ripple for a discount. The point he was making there is that if banks made private tokens, it wouldn't serve any purpose as long as the tokens are different. You would still need to buy another bank's tokens if you wanted to use them for settlement. So banks haven't done that, and likely won't, even with the Ripple network. Banks are never going to buy each other's tokens, but they might just buy XRP for the reasons mentioned later in that post.

[cblack]

@Gendarme I don't think they would directly, other than by buying it off of Ripple for a discount. The point he was making there is that if banks made private tokens, it wouldn't serve any purpose as long as the tokens are different. You would still need to buy another bank's tokens if you wanted to use them for settlement. So banks haven't done that, and likely won't, even with the Ripple network. Banks are never going to buy each other's tokens, but they might just buy XRP for the reasons mentioned later in that post.

You really think banks are going to adopt and use a coin that has as much volatility as Ripple? Oh man.

[Snuden]

@Gendarme I don't think they would directly, other than by buying it off of Ripple for a discount. The point he was making there is that if banks made private tokens, it wouldn't serve any purpose as long as the tokens are different. You would still need to buy another bank's tokens if you wanted to use them for settlement. So banks haven't done that, and likely won't, even with the Ripple network. Banks are never going to buy each other's tokens, but they might just buy XRP for the reasons mentioned later in that post.

You really think banks are going to adopt and use a coin that has as much volatility as Ripple? Oh man.

Some exchanges allow for you to sell at market price the very second you receive X token.

[Gendarme]

@Goodspeed So the appeal comes from the fact that the banks are incapable of creating a global crypto and wouldn't trust another bank's crypto, but trust Ripple because reasons? Furthermore, what is the actual reason there is a large amount of XRP-liquidity? Is it not simply due to speculation? Even if banks adopt XRP I don't see why it is a good investment. The banks certainly won't buy the XRP from the public market so the XRP held by non-banks (i.e. you and others) will never be able to purchase anything and would be worthless tokens.

[cblack]

Goodspeed just has no idea what he's talking about. Rip.

[Goodspeed]

@Gendarme I don't think they would directly, other than by buying it off of Ripple for a discount. The point he was making there is that if banks made private tokens, it wouldn't serve any purpose as long as the tokens are different. You would still need to buy another bank's tokens if you wanted to use them for settlement. So banks haven't done that, and likely won't, even with the Ripple network. Banks are never going to buy each other's tokens, but they might just buy XRP for the reasons mentioned later in that post.

You really think banks are going to adopt and use a coin that has as much volatility as Ripple? Oh man.

Banks don't have to actually hold the token themselves. Instead, during any one transaction, they can buy however much they need and the other end can sell that same amount seconds later. In other words, market makers would be the large holders of the token.
But banks may still choose to hold the token if it saves them money. They are not necessarily that allergic to volatility, especially if they can find ways to insure potential losses.

While some banks cannot hold a speculative asset, they can get around this by employing a third party to act as the legal owner of the XRP. This third party would take the risk of a drop in value and gain the benefit of an increase in value.

How this would be structured depends on what the risk profile of holding XRP actually is. If the benefits of holding XRP exceed the risk, then the third party would pay the bank. If the risk exceeds the benefits, the bank would pay the third party. Banks typically consist of a large number of legal entities, not all of which are technically banks. So the third party can be an arm of the bank that is not itself a bank.

Another potential source of demand:

Even if banks do not hold XRP though, there are lots of other parties that would be heavily incentivized to hold a currency that is used as a settlement currency.

For one thing, you can acquire a settlement currency very cheaply, possibly even at below market rates. You do this by waiting for someone to make a payment that delivers that asset you want to get rid of. You take the XRP they got in exchange for the asset they’re paying with. So companies (like Uber or AirBNB) that makes lots of payments can acquire XRP cheaply by market making, which also provides liquidity for other people’s payments.

Why would companies like Uber and AirBNB want to acquire XRP cheaply? Because if it’s a settlement currency in many corridors they need to make payments to, they can make their payments cheaply if they already have XRP. Instead of having to buy XRP from a market maker, they’ll already have it and only have to pay for the “from XRP” side of the payment.

So if Ripple is successful in positioning XRP as a settlement currency, even if FIs don’t hold XRP, companies that make lots of payments around the world would be incentivized to act as market makers to acquire XRP cheaply and then use that XRP to make outbound payments cheaply.

FTR, again, I'm not saying anything is certain. It's a risky investment, no doubt. To me though, this looks like one of the very few cryptos with an actual use case. You say you're holding onto your LTC and BTC, and yes they have a good track record and proven history, but what is their use case in the future? Is there any potential future use that justifies their value, especially considering the rising competition of technically superior coins? I don't see it.

[deleted_user]

Banks = Jews to Gendarme so he is naturally anti-Bank

[Gendarme]

I don't understand how you can even ask what the use case of Bitcoin is. Is it not evident? It may get replaced by a superior coin, sure, but the use case would be the same. Perhaps you think that I am one of a group of extremely few people who seriously see it as a means to free ourselves from the death grip of corrupt governments and banks, but you would be wrong. That is the main appeal of Bitcoin, and with the recent discoveries in the zk-SNARK field it may soon become a possibility. Obviously you disagree with the philosophy of the mission, but surely you can see its use case. It would be easy to increase transaction speed and lower transaction cost, but that is not what the purpose is. It is a secure trustless international currency, and it is not just the technology that matters—adoption does too. Bitcoin is a lot more secure than other coins due to its 18 exahashes per second which no other cryptocurrency can even dream of at the moment.

[Goodspeed]

That much is evident, but I don't see that as a significant real world use case. I guess I just don't see the average family choosing to own cryptocurrency over fiat anytime soon. Perhaps one day digital money will take over, but it's going to be a long time before that happens and it's going to be sanctioned by a global government and centralized. Bitcoin is not it.
https://coinmarketcap.com/charts/#dominance-percentage

[zoom]

With $50 your best bet is an ICO. I myself invested $100 into Krios which seems like a great project.

How is it new?
Reading about this I'm getting some real dotcom flashbacks lol. Just do something that's already been done but add tokens/crypto to it and you will automatically get a ton of investors. So many of these startups are exactly that.

Actually iirc amazon was part of the big dotcom crash. After that they just continued and they are that huge company that they are right now. So if this is really like the dotcom crash, then some bitcoin currencies might prevail in the end.

I fail to see how that would be impossible, were it not for Amazon.

[zoom]

https://www.coindesk.com/400k-hacker-makes-off-with-stellar-lumens-in-blackwallet-theft/

My Stellar is apparently quite appealing.

It's the name, isn't it?

[zoom]

A moment of silence for everyone involved in crypto this day. Remember to not panic and HODL!

It's just like the stock market, always hold because it will go up eventually

Which so far has been absolutely true, in fact. If one had also used one's brain one would be looking at ridiculous returns by now.

[zoom]

Goodspeed just has no idea what he's talking about. Rip.

Rip(ple).

[zoom]

Banks = Jews to Gendarme so he is naturally anti-Bank

What in the name of Garja do you have against jews!?

[Cometk]

@zoom You couldn't have condensed all that into one post?

[deleted_user0]

Panic selling is not my problem lol, its fomo buying. It may always go up again, but it will always come down too lol

[deleted_user]

cant fomo buy if you dont care about anything in life ¯\_(ツ)_/¯

[zoom]

@zoom You couldn't have condensed all that into one post?

Of course I could have.

[Gendarme]

I just don't see the average family choosing to own cryptocurrency over fiat anytime soon.

I don't think it is that far-fetched. With the lightning network this could all be implemented quite quickly, and there would be no real reason for companies to not accept BTC (or other coins) as payment. If government cracks down it then a lot of businesses won't do that of course, but it would also increase the appeal for Bitcoin on other fronts as it proves the need for it.

[fightinfrenchman]

I just don't see the average family choosing to own cryptocurrency over fiat anytime soon.

I don't think it is that far-fetched. With the lightning network this could all be implemented quite quickly, and there would be no real reason for companies to not accept BTC (or other coins) as payment. If government cracks down it then a lot of businesses won't do that of course, but it would also increase the appeal for Bitcoin on other fronts as it proves the need for it.

You have to understand how difficult it is to get people to adapt to new technologies. Try explaining to a 50 or 60 year old how a Chromecast works - it takes forever and they do not want to do it. In the US old people even hate that they've had to learn how chip readers work, and still try to use fucking checks to pay for things. There's a huge amount of people who won't even consider switching to Bitcoin. Maybe in 10-20 years that will be different, but I highly doubt cryptocurrencies are going to be widely accepted anytime in the near future.

[Gendarme]

50- and 60-year-olds are not necessary for wide adoption. Almost all 40-year-olds use their phones for bank payments and transfers—at least here in Sweden. Using Bitcoin does not have to be harder than that. In fact it is likely to be even easier because of the lack of bureaucracy and regulation. Right now it is difficult because you have to handle private keys directly and all that jazz, but that is obviously not necessary when proper UIs are developed when demand increases.

[fightinfrenchman]

50- and 60-year-olds are not necessary for wide adoption. Almost all 40-year-olds use their phones for bank payments and transfers—at least here in Sweden. Using Bitcoin does not have to be harder than that. In fact it is likely to be even easier because of the lack of bureaucracy and regulation. Right now it is difficult because you have to handle private keys directly and all that jazz, but that is obviously not necessary when proper UIs are developed when demand increases.

40 year olds are old enough that they're not going to switch from their banks to something they don't understand, especially when the benefits are vague at best and nonexistent at worst. Like it or not, all most people know about cryptocurrencies is that they are a weird phenomenon. Most people don't realize they are supposed to be an actual currency