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I've just read the Wikipedia page on Ripple. Can somebody explain in clear terms what the point of XRP is supposed to be? Is it supposed to be a faster Bitcoin

I've just read the Wikipedia page on Ripple. Can somebody explain in clear terms what the point of XRP is supposed to be? Is it supposed to be a faster Bitcoin? Is it supposed to be a less Chinese-controlled (supposedly) cryptocurrency than Bitcoin? Let's for the sake of discussion give them the benefit of the doubt.

ur-whale 6y ago
Ripple is centralized. It's basically another PayPal.
- ogogmad 6y ago
  OK, but I'm asking why they need a cryptocurrency. Paypal certainly doesn't need one.
  - eli 6y ago
    Why does anyone start a cryptocurrency? To get rich, of course
    - mtnGoat 6y ago
      this is probably the best answer OP is going to get. i doubt there was much logic applied, past the idea of getting rich, to the few thousand crypto currencies that were born in the last decade.
  - vkou 6y ago
    Because you can't collect dumb money from dumb people with the pitch of "I'm starting a competitor to PayPal, invest in me." But you can if you hint that if they buy your crypto tokens, those tokens will go to the moon.
momothereal 6y ago
My understanding: Ripple is a company that aims to build a faster bank transfer protocol (faster than SWIFT, for example). To achieve that speed, banks transfer a digital currency (XRP) issued by Ripple instead of traditional currencies. It takes a few seconds for XRP transactions to settle, instead of days for traditional currencies via SWIFT. The value of this currency is decentralized, in the sense that people trade it with other currencies (which is also how Bitcoin, Ethereum etc. are valued). In the eyes of the SEC, the fact that XRP is directly issued by Ripple makes it similar to issuing shares. Even if Ripple doesn't control the value of the shares (XRP), they still manage the supply.
- JumpCrisscross 6y ago
  > It takes a few seconds for XRP transactions to settle, instead of days for traditional currencies via SWIFT Just want to note that interbank transfers via Fedwire are (a) close to free and (b) instantaneous.
  - momothereal 6y ago
    Fedwire is instantaneous for US domestic transfers, whereas international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know. The Ripple company offers solutions to replace SWIFT using XRP as the exchange currency.
    - JumpCrisscross 6y ago
      > international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know International wires are a bit of a mess. But there are alternatives to SWIFT. Also, SWIFT is just a messaging protocol. The actual settlement is handled separately. This was Ripple’s original pitch, but it changed along the way.
      - pas 6y ago
        Is there a precise overview/description somewhere about how international wire transfer actually works? If I want to send someone a few USD and I know their IBAN or SWIFT + name, address, what does my bank do? Is there a Visa/MC for wire transfer? (I know that SWIFT operates a network for banks, but then how do banks settle? Is the SWIFT message a legal claim?)
        momothereal 6y ago
        Assuming you mean sending some USD from the US to an overseas recipient, it goes a bit like this: 1. Your bank sends a secure message to the overseas bank through the SWIFT network (this is where the SWIFT number is used for routing the message) to the recipient's bank, detailing the transaction. 2. Through the SWIFT standard message format, the overseas bank validates whether the account exists in their bank. Some additional screening is done at this stage to detect fraud, money laundering, etc. 3. Your bank and the overseas bank have a predefined agreement on a correspondent account, i.e. a bank account in the US owned by the overseas bank to receive USD. If everything checks out, your bank wires the money via a domestic system like Fedwire to settle the transaction. 4. The overseas bank confirms that the money was wired to their US account, and then adjusts the recipient's balance accordingly.
PragmaticPulp 6y ago
The narrative was that Ripple was going to become the protocol used by banks to transfer money around, especially across borders. The pitch was that Ripple, the company, was going to sell XRP, the cryptocurrency, to the general public in order to fund all of their growth. Then, when banks ostensibly adopted XRP for their banking needs, the banks would be forced to pay exorbitant amounts of money to buy the artificially-scarce XRP from all of the speculators who got in early. Everyone conveniently ignored the fact that large banks are not dumb, and they had no real reason to use a currency literally invented out of thin air to power their transactions. If banks really wanted to use cryptocurrency to trade among themselves, they'd obviously just roll their own cryptocurrency. Or they'd just copy-paste the permissively licensed Ripple code and call it something like BankCoin. No one could ever give me a good reason why banks would have no choice but to buy up arbitrary XRP from general public speculators.
- barkingcat 6y ago
  One possible reason was blackmail. if XRP/Ripple got a few of the key members in the CEO group entrapped, they could easily force the banks to buy XRP. It didn't go too well.
contingencies 6y ago
Other comments are incorrect. As I recall Ripple was originally a network-of-issuers for multiple issuer-specific tokens model, it wasn't supposed to be a single-issuer/single-token. The XRP token itself was never intended to be the asset, it was only a cost-token that fuelled the exchange of other issuers' tokens, similar to offline community exchange systems (CES). Ripple the company post-dates Ripple the project, which AFAIK was originally solidly non-commercial in motivation. I was part of the early commercialization of Ripple sort of by proxy while building Kraken, although I was opposed to the move. Aside from the money people, there were some good engineers involved with the right intentions, drawing from solid experience and with an awareness of CES and attempts at networking thereof. The whole central banking thing was a post-facto marketing push as crypto went mainstream AFAIK. I believe some of the people changed at some point, but I didn't have time to focus on Ripple and never met them. I believe the Ripple narrative mirrors my overall experience with crypto: nice technical ideas by people with positive social visions, suddenly people get paid to do it, utopian visions rapidly replaced with money people, regulatory ingress effectively destroys the USP, whole thing turns in to a scam, regulations become warped in to a system of protectionism and government effectively in cahoots with the dominant players. A real education in human behavior.
- PragmaticPulp 6y ago
  The SEC is clearly suing Ripple the company here. We’re all talking about this part of your comment, which doesn’t really disagree with the other comments: > whole thing turns in to a scam Ironically, the narrative that Ripple the project was unrelated to Ripple, the scammy company, was also frequently used to hype XRP in the early days. It was a convenient way to give two narratives to the same cryptocurrency. People could either choose to believe in the Ripple (the company) banking system, or they could choose to believe in Ripple (the project, the technology). Win-win for speculators.
  - contingencies 6y ago
    Just read this other thread it corrects the misinformation here https://news.ycombinator.com/item?id=25502764 https://news.ycombinator.com/item?id=25502764

ur-whale 6y ago

Ripple is centralized. It's basically another PayPal.

ogogmad 6y ago
OK, but I'm asking why they need a cryptocurrency. Paypal certainly doesn't need one.
- eli 6y ago
  Why does anyone start a cryptocurrency? To get rich, of course
  - mtnGoat 6y ago
    this is probably the best answer OP is going to get. i doubt there was much logic applied, past the idea of getting rich, to the few thousand crypto currencies that were born in the last decade.
- vkou 6y ago
  Because you can't collect dumb money from dumb people with the pitch of "I'm starting a competitor to PayPal, invest in me." But you can if you hint that if they buy your crypto tokens, those tokens will go to the moon.

momothereal 6y ago

My understanding: Ripple is a company that aims to build a faster bank transfer protocol (faster than SWIFT, for example). To achieve that speed, banks transfer a digital currency (XRP) issued by Ripple instead of traditional currencies. It takes a few seconds for XRP transactions to settle, instead of days for traditional currencies via SWIFT. The value of this currency is decentralized, in the sense that people trade it with other currencies (which is also how Bitcoin, Ethereum etc. are valued). In the eyes of the SEC, the fact that XRP is directly issued by Ripple makes it similar to issuing shares. Even if Ripple doesn't control the value of the shares (XRP), they still manage the supply.

JumpCrisscross 6y ago
> It takes a few seconds for XRP transactions to settle, instead of days for traditional currencies via SWIFT Just want to note that interbank transfers via Fedwire are (a) close to free and (b) instantaneous.
- momothereal 6y ago
  Fedwire is instantaneous for US domestic transfers, whereas international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know. The Ripple company offers solutions to replace SWIFT using XRP as the exchange currency.
  - JumpCrisscross 6y ago
    > international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know International wires are a bit of a mess. But there are alternatives to SWIFT. Also, SWIFT is just a messaging protocol. The actual settlement is handled separately. This was Ripple’s original pitch, but it changed along the way.
    - pas 6y ago
      Is there a precise overview/description somewhere about how international wire transfer actually works? If I want to send someone a few USD and I know their IBAN or SWIFT + name, address, what does my bank do? Is there a Visa/MC for wire transfer? (I know that SWIFT operates a network for banks, but then how do banks settle? Is the SWIFT message a legal claim?)
      - momothereal 6y ago
        Assuming you mean sending some USD from the US to an overseas recipient, it goes a bit like this: 1. Your bank sends a secure message to the overseas bank through the SWIFT network (this is where the SWIFT number is used for routing the message) to the recipient's bank, detailing the transaction. 2. Through the SWIFT standard message format, the overseas bank validates whether the account exists in their bank. Some additional screening is done at this stage to detect fraud, money laundering, etc. 3. Your bank and the overseas bank have a predefined agreement on a correspondent account, i.e. a bank account in the US owned by the overseas bank to receive USD. If everything checks out, your bank wires the money via a domestic system like Fedwire to settle the transaction. 4. The overseas bank confirms that the money was wired to their US account, and then adjusts the recipient's balance accordingly.

PragmaticPulp 6y ago

The narrative was that Ripple was going to become the protocol used by banks to transfer money around, especially across borders. The pitch was that Ripple, the company, was going to sell XRP, the cryptocurrency, to the general public in order to fund all of their growth. Then, when banks ostensibly adopted XRP for their banking needs, the banks would be forced to pay exorbitant amounts of money to buy the artificially-scarce XRP from all of the speculators who got in early. Everyone conveniently ignored the fact that large banks are not dumb, and they had no real reason to use a currency literally invented out of thin air to power their transactions. If banks really wanted to use cryptocurrency to trade among themselves, they'd obviously just roll their own cryptocurrency. Or they'd just copy-paste the permissively licensed Ripple code and call it something like BankCoin. No one could ever give me a good reason why banks would have no choice but to buy up arbitrary XRP from general public speculators.

barkingcat 6y ago
One possible reason was blackmail. if XRP/Ripple got a few of the key members in the CEO group entrapped, they could easily force the banks to buy XRP. It didn't go too well.

contingencies 6y ago

Other comments are incorrect. As I recall Ripple was originally a network-of-issuers for multiple issuer-specific tokens model, it wasn't supposed to be a single-issuer/single-token. The XRP token itself was never intended to be the asset, it was only a cost-token that fuelled the exchange of other issuers' tokens, similar to offline community exchange systems (CES). Ripple the company post-dates Ripple the project, which AFAIK was originally solidly non-commercial in motivation. I was part of the early commercialization of Ripple sort of by proxy while building Kraken, although I was opposed to the move. Aside from the money people, there were some good engineers involved with the right intentions, drawing from solid experience and with an awareness of CES and attempts at networking thereof. The whole central banking thing was a post-facto marketing push as crypto went mainstream AFAIK. I believe some of the people changed at some point, but I didn't have time to focus on Ripple and never met them. I believe the Ripple narrative mirrors my overall experience with crypto: nice technical ideas by people with positive social visions, suddenly people get paid to do it, utopian visions rapidly replaced with money people, regulatory ingress effectively destroys the USP, whole thing turns in to a scam, regulations become warped in to a system of protectionism and government effectively in cahoots with the dominant players. A real education in human behavior.

PragmaticPulp 6y ago
The SEC is clearly suing Ripple the company here. We’re all talking about this part of your comment, which doesn’t really disagree with the other comments: > whole thing turns in to a scam Ironically, the narrative that Ripple the project was unrelated to Ripple, the scammy company, was also frequently used to hype XRP in the early days. It was a convenient way to give two narratives to the same cryptocurrency. People could either choose to believe in the Ripple (the company) banking system, or they could choose to believe in Ripple (the project, the technology). Win-win for speculators.
- contingencies 6y ago
  Just read this other thread it corrects the misinformation here https://news.ycombinator.com/item?id=25502764 https://news.ycombinator.com/item?id=25502764