Ripple's way to success: do "+ blockchain" instead of "blockchain+"

Ripple was successful as the world's second-largest digital currency XRP issuer.

Ripple's success is that it is a "+blockchain" project, not a "blockchain+" project.

Ripple did not, like other companies, issue digital currency first, and then consider its value. Instead, it found the necessary location for the existence of digital currency in the established payment network.

The financial technology company, founded in 2004, discovered in the process of eliminating the bank settlement system (SWIFT) that they needed a medium to act as a bridge between national currencies to eliminate the NOSTRO account, a hurdle that hindered the flow of cross-border funds. . So, XRP was born.

Three months later, Ripple received investment from companies such as Google and IDG, and then in-depth cooperation with companies such as Bill Gates and Masayoshi Son.

On the other hand, XRP is also highly controversial.

Organizations such as BitMEX pointed out that XRP has not been decentralized. Ripple founders hold 20% and can issue or destroy them at will, which violates the basic principles of blockchain.

Even one of the founders, McCaleb, left Ripple and joined the competing team Stellar because of different opinions.

India saves $6.6 billion annually

According to the data, India’s annual remittance is 70 billion U.S. dollars, of which 6.6 billion is used to pay the handling fee. India’s annual education spending is only $1.22 billion.

Currently, cross-border transfers rely on the SWIFT system.

When a bank user of country A transfers money to a bank user of country B, it needs to send information to the other party through SWIFT, and then the transfer application will be processed.

In the process, the user has to pay an additional fee, and it takes 2-3 days to transfer the money. Banks are required to pay royalties for SWIFT.

In this regard, Ripple offers three solutions: xCurrent, xVia, and xRapid. The bank only needs to install the Ripple Gateway to complete the transfer within 4 seconds with almost no processing fees.

With the Ripple program, developing countries can save nearly $100 billion annually.

It is worth noting that there are currently more than 100 Ripple partners choosing the xCurrent solution, and only three have chosen xRapid. Of the three options, only xRapid requires XRP as the transit currency.

Still, the Ripple team has always believed that the xRapid solution is the future because it helps banks eliminate NOSTRO accounts. In other words, when the Bank of State A pays to the B-country enterprise, there is no need to open a foreign currency account in Country B, and there is no need to pre-store funds in the foreign currency account.

Currently, Cuallix plans to use XRP to send money between the US and Mexico, and the network has been tested.

Ripple's past

In 2004, Ryan Fugger founded RipplePay, the original idea was to establish a peer-to-peer payment network.

After seven years of silence, this project, which was originally supported by the community, suddenly became different. Everything starts with the joining of two people.

In 2011, Jed McCaleb sold the exchange Mt.Gox and joined Ripple with Chris Larsen.

Jed McCaleb and Chris Larsen changed their strategy, changing to-customer to-business, banking as a customer, targeting the SWIFT system, and hitting the pain points of cross-border transfers.

More importantly, they applied the blockchain concept to Ripple, adding a gateway system based on the original network, and making the bank equipped with the gateway a node.

In 2012, Jed McCaleb and Chris Larsen took control of the Ripple community from Ryan Fugger and released the digital currency XRP.

They believe that there is a need to have a trusted, streamable, encrypted digital currency as a bridge between legal coins to address liquidity problems.

This idea was quickly recognized by the capital, including Google, IDG, Softbank SBI, Standard Chartered Bank and other investment institutions. Up to now, Ripple has completed 4 rounds of financing, totaling 96.2 million US dollars.

At the same time, Ripple has a strong lineup of board members: including Stanford Economics Professor Susan Athey; former Morgan Stanley Co-President Zoe Cruz; Ben Lawsky, who was involved in the development of the New York State Digital Passport regulatory license; and, during Obama's inauguration Gene Sperling, a national economic adviser.

However, Ripple, who owns the "Dream Team", did not arouse the demand for XRP in the market. Instead, it caused a lot of trouble due to the centralized distribution mechanism.

Ripple was sued three times in two months for allegedly Ripple's manipulation of the currency, and the founding team profited by selling the existing XRP. Jed McCaleb left on this ground and joined Stellar.

To this end, Ripple decided to deposit 55 billion XRP into the escrow account. Subsequently, the price of XRP rose rapidly by nearly 10 times.

From the current results, Ripple is successful, and this success is phenomenal.

With peer projects, Ripple is not blindly sending money, extravagantly subverting, but starting from the pain point, using blockchain technology as a solution, thereby introducing digital currency.

Most importantly, Ripple chose to work with traditional banks without direct forced subversion.

The value of the application token is a function of the value of the application. Here, we will look at what happens when banks use XRP.