Hacker News Reader

Comment by hanklazard | Hacker News Reader

Bray mentions Ripple as a better crypto to buy because it has an application (ie ledger for enterprise banking and other financial institutions).

I disagree for two reasons: 1. I’ve become convinced that the crypto currencies with applications (ether, xrp, and others) are actually riskier than the simple store of value coins like BTC. If, for example, dapps don’t really take off in popularity and the “application” of the crypto currency fails, I would expect that would tank the value of that currency. BTC or LTC, which seem more like simple store of value coins at this point, would appear to have less of this type of associated risk. 2. Ripple (XRP) in particular seems doomed to me. I do not believe that any major financial institution would use a public blockchain and associated currency. If they need / want to use blockchain, there are non-public options that would better serve banks, some being developed by the hyperledger group and others.

View on HN

"store of value coins" are such a far departure from what cryptocurrency was invented and intended to be: peer to peer decentralized money.

For sure. But here we are, at least with btc. Current fees, volatility, and confirmation times make it a pretty bad choice as a proper currency.

It's hard to argue that something that could be worth +/- 10%+ in the time it takes a transaction to process is a good "store of value", too.

Fair enough, maybe it’s not the best label. My purpose was just to discriminate between the cryptocurrencies that are trying to solve some other problem (create a worldwide supercomputer, decentralized storage, etc) from those that are more straightforward.

I certainly don’t think of any of it as a store-of-value ... more like a trip to the casino!

I wasn't really aiming that at you so much as at the constantly changing story about Bitcoin's purpose coming from the Bitcoin community as a whole.

Bitcoin is new technology, the fact that its use cases are changing is evidence of that. That should be exciting, not disheartening. It would be a worse sign if it simply accomplished the goal it purportedly was intended for and nothing else. This shows it may have more growth potential.

I for one know a few folks who have used bitcoin to transfer large sums of money across borders... pretty crazy times we live in. I expect bitcoin to dominate in this area in the short to medium term.

That's a bit like complaining that a gold bar is useless because it won't fit through your letterbox.

That counterintuitive (and probably not eternal) relative dependability through lack of a backing asset or functionality is something I have noticed as well. It is easier to explain when comparing bitcoin to the situation when company shares are used as the token in a game of greater fool: there, a business event like a bad quarter (or even a good quarter, tainted by even more optimistic predictions) can be enough to make the music stop. Bitcoin does not have these event sources, but a crypto token with a well defined application or function would. The application would just reintroduce an apparently unnecessary source of bad news.

Bitcoin was initially pitched with an application function as well, paying for services and goods (and, depending on who you asked, sometimes even "anonymous" would somehow sneak into the argument). The "beauty" is that in terms of that metric, bitcoin already has failed, that particular event source has been drained dry. The conversion rate has somehow survived the switch from bootstrapping via proposed use as payment to pure pyramid, but I doubt that this can be replicated.

Just a note that Ripple and Mt. Gox founder Jed McCaleb left the Ripple project to form Stellar Lumens which is technologically superior and I expect XLM to surpass XRP in the "cheap transactions and marketable to banks" space.

Interesting, I’ll check it out.

My question remains though, and here it is in another form: is there a compelling reason for banks to use a public blockchain rather than just use their own private network? I can’t figure out why they would use a cryptocoin-incentivized public blockchain, but maybe I just haven’t thought about it enough. Anyone have a good answer to this?

In the case of Ripple, it’s use case targets remittance and having a publicly trading coin is meant to increase the liquidity of the coin as a settlement layer.

There is a nice speculative article about Jed McCaleb which may or may not be true, still interesting nonetheless: https://steemit.com/ripple/@olyup/fck-you-money-the-rise-and...

I can't read comments on the Internet for a full hour without bumping into someone trying to advertise the amazing qualities of one or another coin I never heard of. Call me skeptical.

Read about it. Or heck, buy one and see how fast it works. Lumens are sell at about $0.26 as of this posting.

It’s insanely fast compared to any other “currency” I’ve transacted with (including BTC, ETH, and LTC).

While we're shilling cryptos that we're heavily invested in, I suggest you check out XRB for even faster, and fee-less transactions

As a side note, just put this together a few days ago myself, Stripe is also invested in Stellar Lumens, having invested $3M USD back in 2014 for 2% of the coins, now Stripe's position is worth over $500M USD.

There seems to be some high profile XRP Customers signed on already, BMO, UBS etc.

I'm not holding my breath as to the wide spread usage in Korea & Japanese banks (as another article states), but I'm optimistic about the technology in general. (1500 TRX/s vs BTC 7 TRX/s)

>There seems to be some high profile XRP Customers signed on already, BMO, UBS etc.

using it as in, using the technology, or using it as in using the currency?

No idea. Potentially initial speculators or investors? Not sure why they would list them as "Customers" otherwise.

I guess much of it is just planting a flag, signaling to shareholders and the like that they are not getting left behind. There is a huge difference between "we are in touch with this" and "we are fully committing to this".

It's like the difference between a software consultancy claiming scala expertise because they had a few people read up on it and a software consultancy stopping to write java.

Something like Corda (1) seems like a better technology. Banks get all the benefits of distributed ledger without all the cryptocurrency speculation and hype.

(1) https://www.corda.net/

No doubt. This will be a competitive space for quite some time.

Reply on news.ycombinator.com