David Schwartz, Chief Technology Officer of Ripple, and Luke Martin, Founder of Venture Coinist, discuss the usefulness of the crypto-asset XRP.
In a series of tweets, Martin questions the use of XRP as a fuel for payments, saying that stable coins tied to traditional assets have the liquidity necessary to move money.
“I asked [David Schwartz] What XRP is useful for because it didn’t make sense to me and his answer didn’t make sense to me either.
When it comes to payments, stablecoins are better. Even if you think it’s better for payments, there is no incentive to hold (no store of value or income generation). “
In response, Schwartz doubts that a single stablecoin will be widespread worldwide.
In order to exchange one stable coin for another, he considers a digital bridge currency such as XRP to be necessary.
“If the whole world were to choose a stablecoin, I would agree. But stablecoin will always be tied to jurisdictions and counterparties, too. So there is unlikely to be a winner.
Today the dollar acts as an intermediary or bridge between currencies. For this role, being bound by US jurisdiction is both an advantage and a disadvantage. A better US than a worse jurisdiction, but a pure digital good is even better. “
Martin believes that Bitcoin has already proven that, despite its slow transaction speed compared to XRP, it is an ideal base settlement layer.
“We already have a perfect case study for the world you are describing! We have thousands of obscure token assets here in crypto. What is the best bridge currency in the crypto universe? Bitcoin (the most fluid, survived reg attacks better than any other bridge, decentralized).
I imagine some are thinking – yes, but it’s too slow and the throughput isn’t high enough. Transactions on exchanges (or liquidity pools) do not have to be carried out in the chain. All that matters is the liquidity pool / matching engine and using the asset with the characteristics you describe. “
Martin emphasizes that regulatory issues related to XRP also put the crypto asset at a disadvantage compared to Bitcoin and stablecoins.
Schwartz said his vision for XRP has always been focused on what is possible when the asset reaches deep liquidity around the world.
“My personal vision for XRP since around 2013 has been the idea of deep, open, public liquidity pools that anyone can contribute and benefit from anywhere – a global market for assets that someone happens to have right where someone is, otherwise they have to be . “
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