On 27th February, the official YouTube account of Ripple released a video with David Schwartz, the CTO, and Breanne Madigan, VP – Institutional markets at Ripple. The video is a part of Ripple drop episodes with the team wherein they dive deep into the vision, progress, and development of Ripple and its products.
Here’s the official video:
David Schwartz talks about how Ripple in its early days had the ability to get started off as a network that performed transactions in a couple of seconds on a decentralized ledger. After which they started to realize that the properties of the algorithms they developed allowed them to do things similar to a decentralized exchange. Which led to the idea of allowing people to issue assets and ideas like community credit. This all was put together into a functional system, and Ripple was off to go into the real world in 2012.
Schwartz also puts forth his opinion on centralized traditional payment providers. When he was asked why is robustness necessary nowadays for payment providers and financial networks that depend on XRP ledger?
He said, “You need to realize that you’re talking about billions of dollars in a system that doesn’t have an administrator there’s nobody to go to if it messes up.”
This is why reliability is the no.1 property and it means that these systems are very slow to develop and evolve, he added.
David even says that in the earlier days when the team looked at Bitcoin they thought it could adopt any new feature which was very naive. Since any change to a system like Bitcoin’s imposes costs on everybody who uses it irrespective of their preferences.
Conventional software systems let its users work their way through the upgrades, whatsoever fits wherever the development is done accordingly. That said, such things don’t work on a public blockchain, because if rules change people have to run their software with the new rules. One has to follow what the majority wants, he exclaims.
Changes on the XRP ledger and what they mean for the network
The CTO of Ripple gives a few insights into the upcoming changes on the network. He believes that Proof-of-Work is a “technological dead-end”. Even though it works just fine for many cryptocurrencies there hasn’t been any significant innovation in it for the longest time. He hints on “Core consensus improvements” and also talks about a liquidity solution that’s coming up next.
Breanne Madigan addresses the important components of liquidity such as immediacy – how quickly one can get access to the market to trade in and out of the system.
The breadth of the market being another important component, Madigan believes covers the segments of trading volumes at different prices. Contrasting to the depth of the market which is about the no. of orders that are close to the current trading price of the assets. Implying that one can get a lot of volume through without having much price movement while trading in and out of the asset.
The VP of institutional markets even talks about accessibility and the seamlessness to trade assets be it through geographic convenience, multiple infrastructure partners, exchanges or OTC desks. Adding that the last key to a healthy liquid market is also resilience – the ability of the market to recover from a significant systemic event such as a market shock.
From what the core team of Ripple has talked about in this episode hints go to building features that will help people to launch better with assets pegged to external value like stable coins and “guaranteed liquidity by the ledger mechanics” in David’s words.