Recently, at the CFCon USA 2018, Chris Larsen, the Co-Founder of Ripple Labs Inc. spoke about Ripple’s “next big thing” in terms of blockchain revolution and the company’s main focus. He also spoke about the globalization and interoperability.
Larsen stated that there was no future for the world unless it was more global or interoperating on an international basis. He stated that “money” was one of the key factors for globalization. However, in the present scenario, he stated that globalization was not possible with the existing banking infrastructure.
The Co-Founder believes that the present scenario has to be changed and blockchain technology was a “container” through which globalization can be achieved. According to Larsen, in a broader sense, it was about the creation of “Internet of Value, ” and not just blockchains and digital assets.
Larsen said that the key requirements for any blockchain to be a part of this new global interoperable ecosystem was to be open source, decentralized, and secure. In addition, he said payment systems need to have a settlement predictability, consistent low cost, have a high throughput, and low energy consumption.
Speaking about XRP in this context, he said:
“We are betting XRP ledger and XRP as the digital asset of choice where we are talking about the blockchain component of this internet of value. XRP clearly has, among the majors [cryptocurrencies], the lowest transaction costs. It is the fastest, about three seconds to settle, and it has the highest throughput of the major blockchains.”
Moreover, Larsen stated that XRP was not just fast but also very consistent. According to him, XRPs’ variability was low when compared to Ethereum [ETH] and Bitcoin [BTC] for example, which has a much larger variability and longer closing periods. He stated that the randomness was “problematic” for payments and payment providers. He also stated that the blockchain needs to be “deterministic” and not “probabilistic,” and said that Bitcoin was a probabilistic blockchain.
Larsen stated that Bitcoin and Ethereum consume a lot of energy, on the present day. He said that XRP ledger uses a consensus that uses a de minimus amount of energy, hence making it suitable for payments.
Furthermore, he stated that liquidity is another factor that drives the internet of value. Considering the above factors he stated that Ripple chose to build their products on the XRP ledger.
Speaking about xRapid, a product that functions on RippleNet, he stated that it allows payment providers to lower the cost of liquidity for global payments.
According to Larsen, the lack of interoperability is also an issue in the existing system. As a solution to this, he stated that it needed a protocol for payments that can connect various networks available and can perform multi-hop. The Co-Founder stated that Ripple would choose Inter Ledger Protocol [ILP] as the right fit in the above scenario.
He went on to say:
“It’s a protocol that’s been underway for many many years. It is a completely open protocol, as decentralized as you can possibly get. There’s a group called the ‘W3C’ that is helping with the standard around the protocol. There are almost 300 organizations that are contributors to it. So our bet is that this is going to be a successful interoperability protocol, a key component of this internet of value. “
Larsen also stated that smart contracts also play a key role in the scenario. He stated that Ripple’s “bet would be on a technology called Codius”. He concluded by stating that Ripple believes that blockchain, interoperability, and smart contracts constitute the Internet of Value.
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