10 ms·

Or XRP can just evaporate since the infrastructure required to actually distribute it will no longer be available once the company goes bankrupt (having to pay

by boh 6y ago

Or XRP can just evaporate since the infrastructure required to actually distribute it will no longer be available once the company goes bankrupt (having to pay the various fines and lawsuits that follow).

PragmaticPulp 6y ago
Ironically, the underlying cryptocurrency infrastructure has little to do with the exchange rates. Most traders aren't actually moving cryptocurrency around so much as trading numbers back in forth inside of the exchanges. I suspect that speculators would continue to trade XRP as long as they're allowed to do so on exchanges, but most exchanges are smart enough to start delisting currencies when they get in trouble like this. It's truly fascinating how little the underlying technology of cryptocurrencies matters to the exchange rates and how they're traded.
- boh 6y ago
  Markets don't actually move the tokens from one wallet to another, the network specific to the currency has to do that. Since Ripple is centralized, if the company goes out of business, the network does too. You will not be capable of trading it at all if that happens.
- nullc 6y ago
  There have certainly been altcoins trading where during periods where there were literately zero reachable nodes running on the internet for them. Fun fact: Ripple actually lost some of the early history of their ledger! Everything before block 32569 was lost.
- Animats 6y ago
  Most traders aren't actually moving cryptocurrency around so much as trading numbers back in forth inside of the exchanges. Yes. That's why Coinbase got out of margin trading. They claim the SEC made them do it. But all the SEC did was to say that "delivery" meant delivery to the customer's wallet, not an entry on Coinbase's books. Coinbase was willing to exit margin trading rather than actually pay out.
  - jaycroft 6y ago
    I'm not sure it's entirely unreasonable on Coinbase's part to disallow margin trading if the margined securities are required to be delivered to the customer's wallet, and not just noted in their account. TD Ameritrade certainly doesn't let you transfer long stock bought on margin off the site - and for good reason! If the market moves against you, TD needs the assurance that they can liquidate your collateral (the stock bought on margin) before your total account value drops below zero - they give you some warning (a margin call) to deposit more funds, if you fall too low in balance, they'll automatically liquidate you. It seems like Coinbase was doing basically the same thing, allowing you to buy on their books but not take the securities off site. The SEC basically says that Coinbase can do that, but then they need to follow the regulations just like stock brokers. If they want to offer margin and not have to comply with regs, then they needed to deliver to their customers (which would allow customers to avoid liquidation / margin calls). So while Coinbase might be being a little disingenuous here, it's more about avoiding regulation than about "actually paying out".
    - Animats 6y ago
      Sorry, CFTC, not SEC. Here's the actual rule.[1] This refers to "delivery" when the futures contract is closed out, not while it is pending. This follows the procedure for physical commodities, like grain. A key point there is that the organization storing the grain is totally separate from the trading process. What you're trading is a warehouse receipt for grain in a grain elevator somewhere. You can "take delivery" by getting the warehouse receipt and starting to pay storage charges. At that point your broker no longer has access to the asset. Eventually someone buys it who actually intends to use it, and they have it loaded onto a train or truck. The key point here is separation between the broker, exchange, and storage facility. Cryptocurrencies use cryptographic wallets instead of warehouses, so "delivery" means delivery to the user's wallet. [1] https://www.cftc.gov/PressRoom/PressReleases/8139-20 https://www.cftc.gov/PressRoom/PressReleases/8139-20
      - SilasX 6y ago
        Interesting, thanks for the explanation. I didn’t know about that rule.
- johntb86 6y ago
  In the future they could turn into something like Rai stones, where it's impractical to move them but people still trade ownership anyway.
paulpauper 6y ago
XRP exists independent of Ripple . The XRP in circulation cannot be destroyed by Ripple or any other entity.

by boh 6y ago

PragmaticPulp 6y ago

Ironically, the underlying cryptocurrency infrastructure has little to do with the exchange rates. Most traders aren't actually moving cryptocurrency around so much as trading numbers back in forth inside of the exchanges. I suspect that speculators would continue to trade XRP as long as they're allowed to do so on exchanges, but most exchanges are smart enough to start delisting currencies when they get in trouble like this. It's truly fascinating how little the underlying technology of cryptocurrencies matters to the exchange rates and how they're traded.

boh 6y ago
Markets don't actually move the tokens from one wallet to another, the network specific to the currency has to do that. Since Ripple is centralized, if the company goes out of business, the network does too. You will not be capable of trading it at all if that happens.
nullc 6y ago
There have certainly been altcoins trading where during periods where there were literately zero reachable nodes running on the internet for them. Fun fact: Ripple actually lost some of the early history of their ledger! Everything before block 32569 was lost.
Animats 6y ago
Most traders aren't actually moving cryptocurrency around so much as trading numbers back in forth inside of the exchanges. Yes. That's why Coinbase got out of margin trading. They claim the SEC made them do it. But all the SEC did was to say that "delivery" meant delivery to the customer's wallet, not an entry on Coinbase's books. Coinbase was willing to exit margin trading rather than actually pay out.
- jaycroft 6y ago
  I'm not sure it's entirely unreasonable on Coinbase's part to disallow margin trading if the margined securities are required to be delivered to the customer's wallet, and not just noted in their account. TD Ameritrade certainly doesn't let you transfer long stock bought on margin off the site - and for good reason! If the market moves against you, TD needs the assurance that they can liquidate your collateral (the stock bought on margin) before your total account value drops below zero - they give you some warning (a margin call) to deposit more funds, if you fall too low in balance, they'll automatically liquidate you. It seems like Coinbase was doing basically the same thing, allowing you to buy on their books but not take the securities off site. The SEC basically says that Coinbase can do that, but then they need to follow the regulations just like stock brokers. If they want to offer margin and not have to comply with regs, then they needed to deliver to their customers (which would allow customers to avoid liquidation / margin calls). So while Coinbase might be being a little disingenuous here, it's more about avoiding regulation than about "actually paying out".
  - Animats 6y ago
    Sorry, CFTC, not SEC. Here's the actual rule.[1] This refers to "delivery" when the futures contract is closed out, not while it is pending. This follows the procedure for physical commodities, like grain. A key point there is that the organization storing the grain is totally separate from the trading process. What you're trading is a warehouse receipt for grain in a grain elevator somewhere. You can "take delivery" by getting the warehouse receipt and starting to pay storage charges. At that point your broker no longer has access to the asset. Eventually someone buys it who actually intends to use it, and they have it loaded onto a train or truck. The key point here is separation between the broker, exchange, and storage facility. Cryptocurrencies use cryptographic wallets instead of warehouses, so "delivery" means delivery to the user's wallet. [1] https://www.cftc.gov/PressRoom/PressReleases/8139-20 https://www.cftc.gov/PressRoom/PressReleases/8139-20
    - SilasX 6y ago
      Interesting, thanks for the explanation. I didn’t know about that rule.
johntb86 6y ago
In the future they could turn into something like Rai stones, where it's impractical to move them but people still trade ownership anyway.

paulpauper 6y ago

XRP exists independent of Ripple . The XRP in circulation cannot be destroyed by Ripple or any other entity.