Here’s Some Cryptocurrency. Now Please Use It | Hacker News Reader

Here’s Some Cryptocurrency. Now Please Use It

nytimes.com

26 pointskimsk11252 comments

Western Union made a bunch of press by announcing they would be leveraging Ripple to streamline their international payments and reduce costs.

Last month they announce that they are parting ways as the Ripple hype did not deliver: http://fortune.com/2018/06/13/ripple-xrp-cryptocurrency-west...

Not true. Direct quotes from the article:

Still, Ersek cautioned that the pilot may be too early on and “too small” to draw conclusions, as Western Union has only tested the cryptocurrency for transfers between two currencies—U.S. dollars and Mexican pesos—so far.

“I don’t want to kill it,” Ersek said of the partnership, adding that the Ripple team working with Western Union “are good people” who are “very innovative.”

"Despite a dramatic drop in the value of cryptocurrencies this year, Ripple still owns $30 billion worth of XRP,"

But ripple can just make more.. it's not like bitcoin or even wants to be.

http://hivergent.com/you-shouldnt-invest-in-ripple-and-not-b...

A related issue is that most crypto currencies are deflationary. This makes people not want to spend them and they become poor currencies because they stifle economic activity.

You can easily prove me wrong, too; use your crypto currencies to invest in something that increases economic activity (such as shares in companies).

Cryptocurrencies are often used to fund companies. That is what many ICOs are, though many are also scams. Just because you can’t buy stock doesn’t mean that people don’t buy equity in other ways using cryptocurrencies.

Almost all the ICO's are scams. And the ones that aren't are mostly destined to fail too.

This is an oft-repeated falsehood. The majority of cryptos I have looked at (the big, non-pre-mined ones in particular) are not and will not be for many, many years. They are disinflationary. They experience inflation at a decreasing rate over time. Eventually, yes, they will become deflationary. Bitcoin will become deflationary on or before (effectively owing to "lost" coins) 2140, but until then the monetary supply increases. That is called: inflation.

If the amount of goods and services you can purchase with the currency increases over time, the currency is deflationary. Disinflation is a slow down in the decrease of the currency value, but if the value of the currency is increasing it’s deflating.

> This is an oft-repeated falsehood

Inflation is a measure between real goods and services on one hand and a single unit of a currency on the other. It is not a measure of money supply. (For that we say “money supply”.)

Money supply increases tend to be inflationary. But that’s not a hard and fast rule. Bitcoin’s money supply is increasing, but on average it’s been deflating.

This article really shows up the insanity of the cryptocurrency situation for me -

  > digital token its founders created *six years ago*
  > almost no transactions are happening
  > Ripple still owns *$30 billion* worth of XRP
  > “It’s still really, really early days..."

Six years, massive valuations, little real use.

The founders are probably living in castles, though.

Cryptocurrency is a lot like Klondike. The first prospectors made money on gold, but now the profit lies with the brothels, hardware shops and the big kingpins.

If you ran an exchange you’d be extremely rich.

More like the South Sea Company. No actual revenue stream, just a self-perpetuating mania that carries on until suddenly it doesn't.

I keep pointing people to the "shitcoin vs buttcoin" animation on Counterthink, showing how low volume can make market valuations skyrocket.

https://www.naturalnews.com/CounterThink/Shtcoin-Buttcoin.ht...

Stellar was created to fix the issues with Ripple https://www.bitdegree.org/tutorials/stellar-vs-ripple/

Ripple could help me a lot but the last time I checked (around one year ago) their platform (Gatehub) was buggy. Plainly unusable. They are not friendly toward small amount testing (they charge your for creating the account and require a minimum balance)

It didn't help the bug debug text was unreadable and the platform way more complicated that the bitcoin blockchain. Steep learning curve.

Apart from that they have a solid offering. Basically, if two parties (exchanges, banks, etc...) support Ripple, you can move your currency (at least USD/EUR) in real time and for no cost.

I'll give a second try and see how they evolved.

You might like Stellar - pretty much the same offering as XRP, but with better smart contract support and it has an open test network that anyone can use. You basically just interact via an API so you can develop in pretty much any language you like.

GateHub isn't their platform, its an independent 3rd party which has built effectively built a portal between the ripple network and their own hosted crypto wallets(a Gateway). GateHub conforms to their(ripple's) API which makes it a "Gateway". I'll give you that gatehub's customer service is awful though, I only use them as way to check what my bot has been up to now. They have a test network now, idk about a year ago.

The minimum account balance is there to keep you from opening a million accounts basically.

Lastly I had trouble with their debug messages as well until I realized I wasn't reading them literally enough.

You can basically search for "ripple test net" on Google, and the first result leads you directly to a page where you can create a test account here: https://developers.ripple.com/xrp-test-net-faucet.html

And I really don't know why you think Gatehub (the exchange) has anything to do with Ripple.

I remember reading about a guy giving away 1 BTC to interested people (when it was 7 USD/BTC). My first thought was poor guy, he sure regrets that he gave so much money (in retrospect) away. But at a second thought his remaining BTC probably gained more value by actively spreading the adoption rate of BTC in this early stage.

Ripple wants to be a global payment platform for banks.

There's just one problem, the banking world already has a platform (created by the banks) called Swift.

Nearly every bank in the world is signed up to this platform and the banks can send payment requests to each other for pennies. (Basically text promises.)

The network effect in full effect.

So what's the advantage of Ripple? Well as far as I can see they don't have a USP.

And worse, even if a bank wants to start communicating with other banks using the Ripple network , each bank now has to create new agreements with each other. As opposed to Swift where you just sign up once.

Good luck with that.

There are plenty of examples of incumbent players being disrupted by new technology. Besides better interop, what do you reckon would a competitor need to offer for it to be compelling offering to banks?

A radical USP. You have to disrupt an existing network.

Swift has high fees, approx $30 per transaction, and 6% of those transactions require some sort of human intervention down the line, the last time I checked.

If you believe Ripple's marketing [1], a remittance company sending $12b of payments a year stands to save 33% on operational costs using their xCurrent software. It would also take seconds to send payments instead of days.

[1] https://ripple.com/files/xrp_cost_model_paper.pdf

One person's high fees are another person's profit centers.

I don't understand what your point is.

I was trying to say that high fees for the consumer are the profit centers for the banks. (Which is why in my opinion the banks would never use Ripple.)

So, this is basically the opposite of how free markets work.

Eh, SWIFT's GPI service apparently already only takes a few seconds, not days, and has around 150 banks signed up and using it, and it's transferring over 100 billion USD per day.

So how does Ripple make money then?

$10m implementation fee, plus it attempts to make the conversion from using xCurrent (which doesn't need XRP) to xRapid (which does), the incentive being that you save more.

And also, the banks make a ton of money using Swift. Even the Western Union and MoneyGrams of the world want to keep taking their huge cut. Even a new startup will have trouble getting traction in places where you can't exchange Ripple for fiat.

Add to all of this the fact that 60% of the tokens are held back. Who wants to take a large position in a currency when a single entity can flood the market anytime they want.

They can't. Their 60% is in escrow. 1 billion XRP is released each month and the remainder of the unused XRP is put back into escrow after that month. https://ripple.com/xrp/market-performance/

I didn't realize that, sorry. But 1 billion released each month still has to have a huge effect on and kind of supply/demand.

Here is my experience with SWIFT for International payments:

1. Emitter pays around 35-50 USD to send you the money.

2. It takes from 5 to 10 days depending on (traffic?).

3. No clue where your payment is until it hit your account. Basically there is no visibility (unlike the blockchain where you can see in real time if the payment is made even though it is not confirmed).

4. Your bank take a cut. Usually it is another 10-20 USD.

And here is the worst part. In some countries (maybe many, most?) there is an obligatory FX circle even if you hold USD accounts.

1. You receive the amount in USD.

2. Bank convert USD to Local Currency.

3. Bank convert Local Currency to USD.

4. USD deposited in your local bank account.

And here is the funny part: The bank make sure it fucks you really well on the FX fees. Around 5-7% both ways. So ends up over 10% of the total amount + the fixed fees.

Welcome to reality.

That doesn't sound like the sort of thing Ripple is going to fix - as it's aimed at being an inter-bank settlement layer, those banks would still get to play those games.

As a consumer, sending money to other people where I am is free and effectively instant. Sending within the EU is heading this way too thanks to SEPA.

Not really. If two exchanges support the Ripple platform, you can move USD without friction. If businesses started supporting Ripple, then you can transact with them too.

You don't need to be a bank or an institution to start using Ripple. You can do so at Gatehub.

> You don't need to be a bank or an institution to start using Ripple.

Sure, but I'm not going to stop transacting using my bank or my national currency any time soon, for a huge variety of reasons. Ripple is angling to be an inter-bank service (see the first sentence in this thread), which doesn't solve the problem of banks playing exchange-rate shenanigans.

It lowers the barrier to entry for remittance competitors significantly. Had planned to build a proof of concept for a hackathon back in march but ran into issues with nobody on the team having foreign bank accounts that we could pair with crypto exchanges. We planned to use Bitstamp -> Bitso to change USD to MXN via moving XRP between the exchanges. All the API documentation is there to make it happen but unfortunately we couldn't open real accounts and one or both of the exchanges didn't have a sandbox API. However the cost to make a transfer would effectively be less than 1% and take roughly a day, which is essentially the time it takes to deposit money from a crypto exchange to a bank account.

> you can move USD without friction

You can already move U.S. dollars frictionlessly: with instantaneous, irrevocable and pennies-to-a-dollar Fedwires. SWIFT is more useful for non-dollar settlement, or between banks without dollar clearing privileges.

It's not really about being settlement layer as much as a way to crowd source vostro/nostro accounts. At least that's how I interpret what xRapid's page[0].

https://ripple.com/solutions/source-liquidity/

I’ve done many FX wire transfers in China, and they’ll transfer USD directly if you have it. If not, they convert to USD first, well, since it is from RMB you need lots of documentation to do that anyways. If you receive USD, it stays as USD until you want to change it tonight RMB. They actually just can’t auto convert it either way since the RMB is not fully convertible.

Same is true for CHF, Euro, any other fully convertible currency.

Here's mine:

1. Bank charges ~5 USD

2. It happens same day

3. The receiving bank charges nothing

I'm typically transferring between US, CH and GB accounts. Occasionally DE. This has been the case for all of them.

When I want to avoid FX fees/spread I just use Revolut as an intermediary, which adds about a day and no fees.

SWIFT isn't bad, bad banks are bad. Make sure to use decent banks and you'll be fine.

Swift (aka wire transfer) is both slow and somehow has very high fees.

It's trash, I'd rather bypass US banks and use crypto at this point.

You're thinking of swift from a banking customer perspective.

The banks don't pay high fees to Swift, they just charge you high fees.

But, if you can avoid that with crypto then good on you.

The advantage of using Ripple's platform versus Swift is it allows you to crowd source your Nostro and Vostro accounts, which frees up that capital to be invested elsewhere. Basically what Circle does except with a more native implementation.

The rebuke from XRP investors is to "go do more research". Headline catching articles predicting the future value of XRP is not research!

after doing research i'm certain ripple can just make more at anytime to keep the value low.

Why would they want to keep the value low? They raise capital by selling it.

liquidity? Ripple owns most of the XRP in existence now anyway and could just flood the market.

Is that a guess? Greater demand -> better market value and greater trading volumes -> better liquidity because it requires less XRP to move x amount of money from A to B, and the market price is less likely to be affected by the move.

The majority of their XRP is in escrow contracts, so they physically can't flood the market with more than 1b a month.

Please present your research which does not simply state "XRP can be created out of thin air" without sources, that can be verified...because you can't.

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