BANK NEVER ADOPT XRP

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Re: BANK NEVER ADOPT XRP

Postby virtualvester » Wed Jun 15, 2016 8:57 pm

yxxyun wrote:https://ripple.com/dev-blog/introducing-offer-autobridging/


Yeah, that didn't answer my questions in any way, but thanks for trying...
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Re: BANK NEVER ADOPT XRP

Postby JoelKatz » Thu Jun 16, 2016 4:45 am

I'm not clear on XRP disposability. If a bank exchanges one currency for another, and XRP are used as the intermediary token:

1.) Are XRP used 1:1 for every dollar exchanged to a different currency, or would 1 XRP be used for one entire transaction, regardless of the dollar amount?


There are a lot of different cases and they all differ.

Case 1: XRP is an intermediary asset and the transaction takes places on the RIpple consensus ledger. In this case, a tiny bit of XRP pays the transaction fee and is destroyed. A larger amount of XRP is transferred from the person who bought asset you are paying with to the person who provided the asset that was delivered. So if I send dollars and the recipient gets Euros, XRP flows from the person who bought the dollars to the person who sold the Euros.

Case 2: The conversion of assets does not involve XRP, but the transaction takes places on RCL. In this case, a tiny bit of XRP pays the transaction fee and is destroyed. Other non-XRP assets move between the traders who facilitated the transaction.

Case 3: XRP is an intermediary asset and the transaction takes place using ILP with the XRP off ledger. Here, XRP flows off-ledger between currency traders. No XRP is destroyed.

You can imagine other cases as well.

2.) Are the XRP used in a currency exchange transaction disposed of? As in they will never be used again, and the total 99 billion XRP in existence will diminish by that amount?


Only for RCL transaction fees, which would take a century to make any kind of a dent. There is no intention of using XRP destruction to reduce the supply of XRP.
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Re: BANK NEVER ADOPT XRP

Postby tomxcs » Thu Jun 16, 2016 4:47 am

virtualvester wrote:
JoelKatz wrote: XRP can even be the intermediary in a bank-to-bank transaction without the banks doing anything at all with XRP.


I'm not clear on XRP disposability. If a bank exchanges one currency for another, and XRP are used as the intermediary token:

1.) Are XRP used 1:1 for every dollar exchanged to a different currency, or would 1 XRP be used for one entire transaction, regardless of the dollar amount?

2.) Are the XRP used in a currency exchange transaction disposed of? As in they will never be used again, and the total 99 billion XRP in existence will diminish by that amount?

I've read all the Ripple white papers over the years, and haven't seen info regarding these questions before. Thanks for your time.


1) The number of XRP that exchange hands depends on the going XRP/IOU market rate, based on offers from traders and market makers, and the amount of the IOU to be exchanged, just like any other transaction with fiat currency, securities or real goods you can imagine. If you'd like an example, let me know.

2) Whoever is exchanging the IOU for the XRP gets the XRP; it is not destroyed. But any transaction fees, denominated in XRP (currently fees are usually a small fraction of an XRP), are destroyed. Again, let me know if you'd like an example.

If you'd like to learn more, I encourage you to come to http://xrpchat.com, which is a bit of a livelier forum with many of the same people that read and post here.
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Re: BANK NEVER ADOPT XRP

Postby yxxyun » Thu Jun 16, 2016 8:32 am

JoelKatz wrote:
Case 3: XRP is an intermediary asset and the transaction takes place using ILP with the XRP off ledger. Here, XRP flows off-ledger between currency traders. No XRP is destroyed.



I don't understand case 3, when using ILP, why the XRP is off ledger? I was thought XRP should on RCL and using suspay, but as you said, XRP is complete not on RCL but on some regulated exchange.
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Re: BANK NEVER ADOPT XRP

Postby JoelKatz » Thu Jun 16, 2016 8:45 am

yxxyun wrote:
JoelKatz wrote:
Case 3: XRP is an intermediary asset and the transaction takes place using ILP with the XRP off ledger. Here, XRP flows off-ledger between currency traders. No XRP is destroyed.



I don't understand case 3, when using ILP, why the XRP is off ledger? I was thought XRP should on RCL and using suspay, but as you said, XRP is complete not on RCL but on some regulated exchange.


There's not necessarily any particular reason it's off ledger, it just happens to be off ledger. For example, say Poloniex implements ILP with XRP auto-bridging. And say someone makes a ILP transaction to pay with Bitcoin but deliver Ether, Poloniex is the connector, and it's autobridged. Inside the Poloniex exchange, XRP will go from the guy who bought the Bitcoin to the guy who sold the Ether. This will take place on Poloniex's books, not the RIpple consensus ledger.

I'm not saying this will have to happen or that it will be popular. Just that it's an example of one way XRP can be an intermediary asset in an ILP transaction that would work if people wanted to do it.

And these aren't all the cases. There are a few more that are even more interesting, but I"m not going to spill the beans just yet. Sorry.
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Re: BANK NEVER ADOPT XRP

Postby virtualvester » Mon Jun 20, 2016 8:06 pm

JoelKatz wrote:
not clear

There are a lot of different cases and they all differ...


Thanks for your time/explanation.
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