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Ripple Beating The Banks, But Centralization Concerns Remain

Anyone that has made an international bank transfer will feel the frustration of waiting for at least a day and paying far more than should be necessary for something that can be done with a click of a button. Ripple is bridging that gap with RippleNet which offers SMEs a competitive edge for global payments.

The San Francisco based blockchain firm has taken to its blog to proclaim that “the world’s payments infrastructure hasn’t changed since the heady days of disco, nearly four decades ago.” Business operations are unnecessarily hindered by today’s archaic banking system built upon decades old infrastructure.

Businesses today need to plan for days of delays while banks and payment providers self-fund multi-currency accounts and pass the costs and over inflated foreign exchange rates and transaction fees onto their customers. A significant percentage can be lost sending money from one country to another going through a number of different currencies, the only ones profiting are the banks.

According to the company RippleNet speeds up transactions, reduces costs, and introduces a level of certainty to global payments;

“Using RippleNet, banks and payment providers can reimagine a payment from invoice to confirmed settlement for their clients. Just one small change, like the ability to drag-and-drop invoices as part of a RippleNet powered transaction, can have many benefits: it saves time with pre-populated fields, automatically confirms recipients for accuracy, and obtains real-time quotes.”

Smaller transactions in emerging markets such as Brazil, India, and China will benefit more from an international cross-border payments platform that doesn’t take days or cost a hefty slice of the remittance. According to the World Bank global remittance payments will grow by 3.4% or roughly $466 billion this year.

Ripple is currently at the forefront of the industry and has partnered with over a hundred banks and payments providers across the globe. It claims that it “connects all parties in a global transaction through a single seamless, frictionless experience. Built for the Internet age, Ripple delivers access, speed, certainty and savings.”

While this may be a service long overdue, crypto aficionados and cypherpunks claim that Ripple is as centralized as a bank and will still profit from these transactions. The company, however, argues the opposite claiming that the XRP Ledger ‘is based on an inherently decentralized, democratic, consensus mechanism’.

The key thing to note here is that Ripple is the company with products such as RippleNet, xRapid and xCurrent while XRP is the ledger working on blockchain principles used by other cryptocurrencies. The bigger thing to note here is that the company, or its executives, holds a massive proportion of these tokens which can enter or leave the market as and when they see fit and consequently have a huge influence on price.

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Ripple Chief Technology Officer: Getting Volume On RippleNet is Top Priority

David Schwartz – the current Chief Technology Officer CTO [former Chief Cryptographer] for the startup that provides better solutions for cross-border payments Ripple did an interview with Asheesh Birla – Ripple Senior Vice President of Product. The questions were made by the Ripple [its XRP Token] community and enthusiasts over Twitter.

Ripple – David Schwartz

Keeping in mind that news which are related to the crypto-firm Ripple fly in daily, it is obvious that investors, traders, followers want to know what are the priorities and most important tasks that the team has set in front of them. According to Mr. Schwartz the most important matter to take care of is getting more volume in RippleNet. Accordingly, getting more payment corridors by which the transaction flow will increase and its tech implementation will take place.

“I think having that transaction flow as candidates to be bridged with XRP is tremendously important to the company. Also, xRapid, actually doing the bridging of payments with XRP”

Even that Ripple is known for signing many partnerships during the last years counting hundreds according to its CEO Brad Garlinghouse, David Schwartz thinks there is still need for more which of course will turn out positive.

The next major factor to work on is decentralization as Mr. Schwartz highlighted out, and explained why it does matter when asked.

 I’ve had people tell me “Well, banks don’t care if something is decentralized; they trust each other, don’t they?”. Well, not only they do not trust each other, but imagine if you are trying to build on that ecosystem… if you are trying to compete with a company that’s spent billions of dollars on its liquidity solution, are you going to want to spend billions of dollars? And the other problem is that things that are based on trust don’t really scale… However, if you have a system that doesn’t require trust, you can interoperate with everybody by just firing up your own instance.

He continued adding that with a decentralized system there is no need for anybody to manage it on daily, or a governance body which would intermediate the engine. Which is why a decentralized platform that can govern and run by itself is needed.

The following questions were directed to Senior Vice President of Product, especially about Ripple’s product xRapid. As we all just want to know the best part, a twitterati asket when it is going to be in production. Birla noted:

“Right now, we are really working hard on getting the experience right for xRapid… We’ve seen really positive results with the pilot so far. There’s no set time for production just yet… We hope to have it by this year. I would say that the pilots were really good learning both for us and our customers”

As many do know, the partnership with Western Union had its ups and downs. Birla explained that for WU to see the full potential of xRapid and take advantage of the financial transaction solution, they have to set all their volume under xRapid. That is because they already set costs and optimized liquidity flows. However, according to the senior vice president of product, the team has set under radar startups and firms that are competing with Western Union and hoist them with their tech.