Two days ago, David Schwartz, Ripple’s Chief Technology Officer (CTO), responded to online users’ curiosities during a live session held by The Next Web (TNW). Here are the most focal points of the so-called Q & A.
“Ultimately, this will be up to the SEC to decide. We believe that XRP should not be classified as a security. XRP does not give ownership shares in Ripple or any other entity. XRP exists independently of Ripple. If Ripple went away tomorrow, XRP would continue to exist and have the same utility it does today. Neither Ripple nor any single entity can exert unilateral control over the XRP ledger.”
“Our goal is to have xRapid out of beta by the end of the year. We’re really excited about the recent pilot results showing 40% to 70% savings compared to what financial institutions normally pay expensive foreign exchange providers.”
“It has to do with a lot of factors. A Big one is just how efficient the alternatives are. The less efficient the alternatives, the greater the savings with xRapid. Some companies have spent absurd amounts of money optimizing their current liquidity sourcing. They won’t see as big a savings with xRapid as a smaller company that hasn’t invested so heavily in optimizing their current liquidity sourcing. In a way, xRapid helps level the playing field and might even make it possible for new competitors to enter the market without a huge disadvantage relative to the existing players who have invested more.”
“I’ve never heard Brad say that. I definitely don’t think bitcoin is a scam and defended bitcoin publicly continuously since 2011 when I first learned about it. I think it’s the first example of an exciting new technology and still the market leader, at least by market cap. The technology is genuinely a breakthrough and I too hold some BTC. If nothing else, the current market mechanics are telling us that we’re all in this together and I don’t think one crypto project can become successful by pulling others down. That said, I do think we should be objective about bitcoin’s weaknesses and limitations. Proof of work is expensive, has no clear response to a majority attack, and has not delivered on its promise of decentralization. It makes miners forced stakeholders, because the system is not secure without them, and miner’s interests can diverge from the interest of other users. I genuinely believe that the XRP Ledger design significantly improves on bitcoin’s design.”
“The purpose of xRapid is to provide liquidity on demand through XRP. With xRapid, a cross-currency payment can, in just a minute or two, buy XRP with USD and then sell the XRP for MXN on existing digital asset exchanges. Within the RippleNet network, xRapid can provide rapid settlement through existing XRP liquidity for payments initiated elsewhere on the network.”
“I’m always hesitant to try to predict the future and particularly committing to specific timelines. My hope for that time frame is that exchanging value becomes as easy as sending an email. You shouldn’t have to care about what assets or systems the people you’re paying, or who are paying you, prefer to use. It should all just work. This takes a lot of pieces, and I expect ILP to be the enabler that lets these work together.”
“The XRP Ledger is inherently decentralized because its ultimate governance is the code people choose to run. Anyone who runs a node in any decentralized network is the ultimate arbiter of their node’s behavior, subject only to the limitation that they can only interoperate with nodes with compatible rules. We are definitely planning on continuing to improve aspects associated with decentralization.”
“While PoW has seemed to be a technological dead end and networks using it are either stagnating or abandoning it, there’s lots of further progress on Byzantine agreement algorithms. Ripple recently proposed adding code for censorship detection to the XRP Ledger software to provide certainty that censorship is not actually occurring. We’ve also published a paper on a new agreement algorithm, Cobalt, that can reduce confirmation latency and also provide provable assurance of correct behavior under a broader set of conditions than the current algorithm.”
“For xRapid to work, there has to be sufficient liquidity between XRP and the local fiat currency to permit fiat currency to be bought and sold as needed. A lot of this liquidity is already being provided organically by market makers. xRapid will just mean that instead of (probably) trading almost exclusively with speculators, market makers will increasing trade with market takers trying to source liquidity through XRP. If needed, Ripple would consider employing third party market makers to provide additional liquidity were existing market making insufficient.”
“The fees are automatically set by supply and demand. One would expect a decrease in supply of XRP due to destruction to reduce what people are willing to pay in fees, which would result in the fees dropping. But it’s very unlikely that this will be a significant effect even in the next several decades. Stakeholders can always agree to change system rules as necessary in any decentralized system, but I think worrying about this now is like turning your car’s steering wheel ten miles before a curve.”
David Schwartz currently occupies the position of Chief Technology Officer at Ripple, one of the most famous crypto projects. He is among the original developers of the Ripple Consensus Network. Prior to joining Ripple, Schwartz was Chief Technical Officer at WebMaster Incorporated, working on creating cloud storages and encrypted messaging networks for businesses such as CNN and the National Security Agency (NSA). Also known as “JoelKatz,” David Schwartz, is one of the influential personalities in the crypto world.