The Ripple Drop – Episode 4

Welcome to episode four of The Ripple Drop, a web video series covering the latest news about the company’s customers, technology, products and culture.

On our first segment this week, Ripple’s Chief Market Strategist Cory Johnson shares the most significant finding in the Q2 XRP Markets Report. We also ask him what he’ll talk to Brad Garlinghouse about in his upcoming AMA later this week.

Next, we talk to Marcos Fernandez, senior manager for xRapid infrastructure partnerships. He tells us why last week’s announcement, xRapid Brings on Three New Exchange Partners, is so important for remittances from the U.S. to Mexico and the Philippines.

On our final segment, we sat down with Welly Sculley, director of business development. He discusses interesting trends he’s seeing among financial institutions on RippleNet.

We hope you enjoy this episode, and as always, let us know if there are topics you’d like to learn more about in the future.

An extended cut of this episode featuring the full interviews will also be available on Youtube. And, if you haven’t yet, make sure to catch up on episode one, two and three!

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xRapid Brings on Three New Exchange Partners

xRapid, Ripple’s cross border payments product that minimizes liquidity costs, is powered by the superior speed, low transaction cost and scalability of the digital asset XRP. But for xRapid to be most successful, there needs to be a healthy ecosystem of digital asset exchange partners around the world. These exchanges allow xRapid payments to move from one currency – into XRP – and back into another currency quickly and efficiently.

Today, we’re pleased to announce Bittrex will act as the preferred digital asset exchange for xRapid transactions that move through US Dollars. In addition, Bitso and Coins.ph will be preferred for Mexican Pesos and Philippine Pesos, respectively.

Here’s what a xRapid payment flow will look like from the U.S. to Mexico:

  1. A financial institution, that has an account with Bittrex, initiates a payment in US dollars via xRapid which is instantly converted into XRP on Bittrex.
  2. The payment amount in XRP is settled over the XRP Ledger.
  3. Bitso – through its Mexican Peso liquidity pool – instantly converts the XRP into fiat, which is then settled into a destination bank account.

“Bittrex is one of the biggest names in digital asset trading in the U.S. The same goes for Bitso in Mexico and Coins.ph in the Philippines. That makes today’s announcement an important development for xRapid,” said Cory Johnson, Chief Market Strategist at Ripple. “We’ve seen several successful xRapid pilots already, and as we move the product from beta to production later this year, these exchange partners will allow us to provide financial institutions with the comfort and assurance that their payments will move seamlessly between different currencies.”

“We are excited to be partnering with Ripple to bring the benefits of blockchain technology to cross-border payments, making sending money home more affordable for 10M+ overseas filipino workers”, says Ron Hose, CEO of South East Asia’s e-wallet and financial services company, Coins.ph.

In May, Ripple announced that financial institutions piloting xRapid saved 40-70% on average compared to traditional foreign exchange brokers who facilitate cross-border payments. The payments also settled in two minutes or less compared to two to three days from traditional methods.

For more information on Ripple’s solutions or to learn more about becoming an xRapid partner contact us.

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The Ripple Drop – Episode 3

Welcome back for episode three of The Ripple Drop, a video series covering the latest news about our customers, technology, products and company culture.

Our first segment offers a deeper look at the Swell 2018 program, our invite-only customer conference connecting the world’s leading experts on policy, payments and technology. We talk to Austin Cowden, Manager of Global Events, to learn more about President Bill Clinton’s keynote and the dynamic line-up of speakers and panelists to follow.

The second segment provides a sneak peek into our recently opened New York City office. We sit down with Hana Kelley, Visual Design Lead, to understand how the Ripple brand is translated throughout this beautiful physical space.

Our final segment features Ripple’s summer 2018 intern class. We’ve had a talented group of students from across the country join every department in the company — from marketing to business development to engineering. They share experiences and highlights working alongside our team in the San Francisco office.

We hope you enjoy this episode, and as always, share via comments on Twitter, LinkedIn and Facebook with input for future episodes. An extended cut of this episode will also be available on Youtube. And, if you haven’t yet, make sure to catch up on episode one and episode two!

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President Bill Clinton Keynotes Swell 2018

Today, we’re thrilled to announce 42nd President of the United States Bill Clinton as the keynote speaker for Swell – where the world’s leaders in policy, payments and technology connect.

At a time when groundbreaking technology and regulation were often on a collision course, President Clinton helped usher in a period of extreme growth and adoption of the Internet, shaping what it is today. He also established programs that bridged the “digital divide” and brought new technology to underserved communities around the world.

These learnings are perhaps more relevant now than ever before. Like the Internet boom of the 90’s, we are at an impasse: digital assets and blockchain technology offer a way for value to be exchanged as quickly as information – creating more financial inclusion and economic opportunity. However, with this new technology comes potential for concern, requiring thoughtful policy to protect consumers from risk without hampering innovation.

Gene Sperling, National Economic Council Director and Advisor under Presidents Clinton and Obama, will moderate a Q&A with President Clinton during the keynote address.

This year’s Swell program will also feature:

  • Financial services companies using blockchain technology in production
  • New market opportunity in remittances, e-commerce and corporate marketplaces
  • Frameworks for regulating digital assets across Europe, Asia and the Middle East

The Swell 2018 conference is located in our hometown of San Francisco, California from Monday, October 1 to Tuesday, October 2. For more information, we encourage you to visit the Swell website and stay tuned over the coming weeks for updates on this dynamic line-up.

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Ripple and Raising Malawi Launch Campaign to Sponsor Children in Need

In emerging markets, it’s the people — many times children — who have the cards stacked against them, whether it’s being left behind by the current financial, education or healthcare systems.

That’s why, today, we’re excited to kickstart a month-long campaign in partnership with non-profit Raising Malawi to raise funds for orphans and vulnerable children across the southeast African country. From July 30 through August 31, Ripple will match all public donations in support of the cause and help individuals sponsor children directly through Facebook.

“We’re honored to be a part of Raising Malawi’s amazing work with some of the world’s most underserved children and are grateful to our investors at Sound Ventures for making the introduction to us and this important cause,” said Eric van Miltenburg, SVP of Business Operations at Ripple.

Nearly one million children in Malawi have lost one or both parents to HIV/AIDs, leaving them orphaned or without anyone to care for them.

Since 2006, Raising Malawi has served these children — more than 10,000 — through direct healthcare services and educational support, including materials, classes and funding scholarships. Raising Malawi has also helped establish the first pediatric surgery and intensive care unit in the country.

The non-profit was founded on the belief that vulnerable children deserved more than to “just survive.” It works with local partners on the ground to create opportunities for children to learn, grow and transform their futures.

Ripple and its executive team care deeply about giving back and eliminating barriers that keep marginalized populations from being a part of our global community. This means fostering programs for financial inclusion, improving access to fundamental human services, empowering teachers and supporting primary education, and promoting environmental literacy and conservation. This recent donation to Raising Malawi is just one such example of how we invest in causes that exemplify this philosophy.

With your support, we can help Raising Malawi provide critical healthcare services and educational opportunities for children across the country. Learn how you can sponsor a child today and become part of this important campaign.

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Q2 2018 XRP Markets Report

By Cory Johnson & Miguel Vias

Ripple sells $73.53 million in XRP amidst low volatility in Q2 2018

  • $73.53 million XRP sold
  • Ripple sales volume accounted for 0.125 percent of global XRP volume
  • Three billion XRP released out of cryptographic escrow, 2.7 billion XRP returned to escrow

In Q2 2018, the company sold $56.66 million XRP programmatically. This represented 0.125 percent, or 12.5 basis points of the total XRP volume traded globally in the second quarter.

In addition, XRP II, LLC — a Ripple subsidiary that is a registered and licensed money service business (MSB) — sold $16.87 million XRP in direct sales. In total, the company sold $73.53 million in Q2.

XRP was notably less volatile in Q2 and XRP’s 9.0 percent price decline was in line with bitcoin’s 8.2 percent decline. Despite the tepid environment, the company’s XRP sales proved to be a drop in the bucket of an XRP market that traded $45.35 billion.

 

Q2 Escrow Activity

In Q4 2017, Ripple locked up 55 billion XRP in a cryptographically-secured escrow account. Due to the lockup, Ripple has access to only 13 percent of the total XRP in circulation.

In Q2 2018, XRP was again released out of escrow. 3 billion XRP was released out of escrow (1 billion each month). 2.7 billion XRP was subsequently put into new escrow contracts.

The remaining 300 million XRP not returned to escrow is being used in a variety of ways to help support the XRP ecosystem.

New Entrants

Q2 brought several significant new entrants into the XRP ecosystem, such as Coil, a new venture led by Stefan Thomas that will use XRP for various micropayments applications, such as facilitating “bite-sized” purchases of media.

Additionally, Scooter Braun, entertainment talent manager, entrepreneur and founder of SB Projects, is pursuing several endeavors that will use XRP to improve artists’ ability to monetize and manage their content.

Both of these new entrants have support from Xpring, a new initiative by Ripple that will work with companies and projects run by proven entrepreneurs that are building out the XRP ecosystem.

Market Commentary

The total market capitalization of all digital assets started the year at $603.7 billion but by mid-year — despite the issuance of hundreds of new ICO “coins” — had declined to $254.7 billion.

During Q2, the XRP market also slowed considerably, compared to the prices and volumes we saw in Q4 2017 and Q1 2018.

This slowing could be attributed to the ongoing concern around regulation, both in the U.S. and around the globe. Despite the SEC announcing in June that they don’t consider ether a security, there wasn’t a meaningful and sustained bump in volume or price of any digital asset, including XRP.

The decline in both volume and price was consistent across the majority of digital assets, as many moved with tight correlation.

The tight correlation is indicative of a market that is still in its infancy. Traders have yet to distinguish among the intrinsic values of the best known digital assets. As the industry matures and decides what it deems most useful and valuable, we should expect to see more separation.

When we drilled down further to specific assets, we saw some slight variation. XRP performed in line with bitcoin (-9.0 percent vs. -8.2 percent), while widely traded digital assets ether and bitcoin cash outperformed, up 14.8 percent and 9.3 percent.

It’s also important to note that despite Ripple having its best quarter ever in Q2 — in terms of customers signed — XRP’s price continued to decline with those of other digital assets, underscoring XRP’s independence from Ripple.

Also notable in the contraction of the market was the lessening influence of South Korean trading. South Korea had dominated digital asset trading, on some days accounting for nearly 70 percent of global volume. But by the end of the second quarter, South Korea’s trading had fallen to fourth in global share. Several prominent exchange hacks in South Korea, along with overall fatigue from traders, may have contributed to the recent fall.

Speculative traders drove volatility to 13.8 percent in Q4 2017, but as retail investing in digital assets subsided in Q2 2018, XRP volatility also abated — falling to 5.7 percent. It was the lowest volatility XRP has seen since Q4 2016. The highest XRP volatility, as it happens, was not Q4 2017, but Q2 2017 when XRP volatility hit 22.3 percent. The decline in volatility was accompanied, chicken and egg style, by a decline in volume.

That lower volume notwithstanding, a number of the largest firms in finance made a series of announcements about moving into the space:

  • Goldman Sachs announced plans to start a digital asset trading desk.
  • JP Morgan named a head of “crypto-asset strategy.”
  • Nasdaq’s CEO Adena Friedman said it would consider becoming a crypto exchange.
  • Fidelity said it was building a digital asset exchange.
  • Nomura became the first bank to offer custody services for digital assets.

These announcements are nascent efforts but seem to indicate widespread interest in digital assets from the largest names in finance. However, it’s important to note that these are announcements — they have yet to lead to meaningful institutional crypto trading. Nevertheless, it’s clear that financial institutions are beginning to build crypto divisions and establish technological solutions to take advantage of the opportunity at hand.

Last quarter’s (Q1 2018) XRP market report can be found here.

XRP II, LLC is licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services.

Correction: An earlier version of the post stated that total sales of XRP was $75.53 million. This was not accurate. We have updated the post to reflect the correct number: $73.53 million.

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Ripple’s List of Summer Must-Reads

Since we published our last reading list two years ago, the blockchain industry has grown dramatically and with it, the list of books, articles, newsletters and other valuable resources to learn about the space. In this time, the industry has also grown and become more mainstream with dozens of companies looking to provide enterprise use cases for the technology.

The importance of deploying blockchain for real use-cases requires a deeper knowledge of the history of the technology itself together with broader business and economic know how to get the job done. Here’s three books that we think are critical to your summer reading consumption with this goal in mind.

“The Truth Machine: The Blockchain and the Future of Everything” by Paul Vigna and Michael J. Casey is a deep dive into blockchain technology. Vigna and Casey go all the way back to the Middle Ages, to provide context on why the technology has so much potential. The authors believe that the decentralization of the technology, a distributed new layer of trust unreliant on any central authority, provides potential to change broader economics as we know it. The book provides depth into some of the most promising and exciting projects using blockchain along with the history and detail to really underscore to the reader why it’s so groundbreaking.

The technology behind digital assets might have seemingly exponential potential, but harnessing it requires also understanding how to apply it for real use-cases and real customers. That’s why we’re recommending the next two books; they offer broad learnings and recommendations for entrepreneurs and business leaders in any industry.

A book once recommended by the late Steve Jobs, “The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business” by Clayton M. Christensen provides a thoughtful outline of why every company, even those that develop new technology must be aware of its applications and limitation, especially when it’s time to move on. This book challenges readers to think critically about their industry but remain introspective about their business objectives and operations.

The last book, “Matchmakers: The New Economics of Multisided Platforms” by David S. Evans and Richard Schmalensee is at the top of reading lists for top business leaders and entrepreneurs. The two economists break down the mechanics of what powers the business of the biggest players in the digital economy. The authors outline why multi-sided platforms that “matchmake” are so successful.

The concept of matchmaking isn’t new and examples of businesses that have done this successfully include everything from your local mall to high-tech leaders of the gig economy, like Airbnb. Yet, the authors stress this is only the beginning, arguing that the smartest and most successful companies continue to build on the original connections they forged — bringing together new users and amplifying network effects.

For more features like this be sure to follow Asheesh Birla for the launch of his newsletter BUIDL. We also plan to publish new recommendations each quarter, so visit us again this fall, and happy reading!

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Banks Turn Remittance Obstacles into Opportunities with Ripple

Over the last ten years, changes wrought from the 2008 financial crisis along with a marked increase in fraud and terrorism funding concerns, have consolidated the world’s system of correspondent banking. Despite positive macro-economic trends and an increasingly interconnected commerce sector, de-risking efforts at large financial institutions have shrunk the world’s correspondent banking relationships by as much as 25% according to research by Accuity.

The result is a growing pool of regional banks that struggle to affordably and securely serve the international transactions needs of their customers. This increase in regional banks is leaving large segments of the world’s population excluded from mainstream financial systems.

Eroding market share for regional banks

This disconnect in correspondent banking has driven up the cost of remittances in smaller, riskier regions, even while overall remittance prices have fallen in larger developed countries. For regional banks, this impacts their ability to serve customer needs and ultimately diminishes their financial performance.

This is because consumers will not simply walk away from international transactions. Immigrants or refugees must get money to their families, expatriates need to manage finances in multiples countries.

So as in any natural ecosystem, when these consumers encounter one barrier they move towards another opportunity. With bank-based remittance prices too high or simply unavailable in these regions, customers are turning to money transfer operators (MTOs) like Western Union or MoneyGram.

MTOs are better able to serve customers because remittances are a core product — rather than a cost center like at smaller banks — allowing them to be more creative in its delivery. Customers turning to MTOs means significant erosion of market share for banks.

To counter this trend, regional banks are becoming increasingly creative in building remittance and money transfer corridors. By creating long chains of partner banks across countries, they can link currencies through multiple “hops.”

Unfortunately, these hops introduce additional risk — especially as some bank or currency partners operate in less than transparent ways — and add layers of extra cost in partner and FX fees. And the more remote the remittance corridor, the murkier and more cost prohibitive the transaction for the consumer.

Enter RippleNet and xCurrent

So what’s a regional bank to do? They need to overcome two barriers: the risk inherent to a multiple-hop corridor and finding banking partners to create new corridors.

xCurrent and RippleNet solve both issues. First, xCurrent provides groundbreaking speed that enables regional banks to send and settle money instantly, and with new end-to-end messaging tied to settlement, it also creates a new level of transparency.

RippleNet solves the second piece of the puzzle for regional banks. The decentralized network of banks across the world is over 100 strong. Next week in Dubai, members of the network will meet to forge new connections and discuss how they use Ripple technology — sharing lessons learned and best practices.

For regional banks, events like these provide a critical opportunity to create relationships that open new remittance corridors. Together with new technology, these relationships level the playing field for regional banks — they can now  overcome both the cost and risk associated with the traditional correspondent banking model and better service their customers’ needs.

For more on the xCurrent and our other solutions, visit our website.

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fix1571 is Now Available

As previously announced, the fix1571 amendment became enabled on the XRP Ledger on 2018-06-19. Furthermore, the fix1623 amendment is expected to become enabled on 2018-06-20, followed by the fix1543 amendment on 2018-06-21.

Action Required

  • If you operate a rippled server, you should upgrade to version 1.0.1 (or higher) immediately.

For instructions on upgrading rippled on supported platforms, see Updating rippled on supported platforms.

Impact of Not Upgrading

If you operate a rippled server on a version older than 1.0.0, then your server is now amendment blocked, meaning that your server:

  • Cannot determine the validity of a ledger
  • Cannot submit or process transactions
  • Does not participate in the consensus process
  • Does not vote on future amendments
  • Could rely on potentially invalid data

fix1571 Summary

Changes Escrow to fix the following issues:

  • Changes the EscrowCreate transaction to require the Condition or FinishAfter field (or both). Escrows with neither Condition nor FinishAfter that were created before this amendment can be finished by anyone at any time before their CancelAfter time.
  • Fixes a flaw that incorrectly prevents time-based Escrows from being finished in some circumstances.

Learn More

Related documentation is available in the XRP Ledger Dev Portal, including detailed example API calls and web tools for API testing.

Other resources:

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rippled Version 1.0.1

Ripple has released rippled version 1.0.1, which includes fixes for issues identified by Ripple engineers and reported by external security researchers. These issues, when exploited, could cause a rippled instance to restart or, in some circumstances, stop executing.

While these issues can result in a denial of service attack, none affect the integrity of the XRP Ledger and no user funds, including XRP, are at risk.

Action Required

If you operate a rippled server, then you should upgrade to rippled version 1.0.1 as soon as possible.

Impact of Not Upgrading

  • If you operate a rippled server, but do not upgrade to version 1.0.1 as soon as possible, then your server may experience restarts or outages.

Upgrading

For instructions on updating rippled on supported platforms, see Updating rippled.

The SHA-256 for the RPM is: 4bfa27b0e1e1979f2bc042edb9dd11ae4119dac6be087813dadcc67572877189

The SHA-256 for the source RPM is: 60279abc65476b0a96ddedcd23338ce1c6fb5481ab94fe8b8c856448044e3ebe

For other platforms, please compile v1.0.1 from source. See the rippled source tree for instructions by platform. For instructions building rippled from source on Ubuntu Linux, see Install rippled on Ubuntu.

The first log entry should be the change setting the version:

commit 8429dd67e60ba360da591bfa905b58a35638fda1
Author: Nik Bougalis 
Date:   Mon Jun 4 16:36:22 2018 -0700

      Set version to 1.0.1

Network Update

The Ripple operations team plans to deploy version 1.0.1 to all rippled servers under its operational control, including private clusters, starting at 3:00 PM PST on Thursday, 2018-06-14. The deployment is expected to complete within 5 hours. The network should continue to operate during deployment and no outage is expected.

Other Information

Acknowledgements

Ripple thanks Guido Vranken for discovering and responsibly disclosing an off-by-one error in the base64 decoder logic when handling malformed input.

Bug Bounties and Responsible Disclosures

Ripple welcomes reviews of the rippled codebase and urges reviewers to responsibly disclose any issues that they may find. For more on Ripple’s Bug Bounty program, please visit https://ripple.com/bug-bounty/.

Boost Compatibility

When compiling rippled from source, you must use a compatible version of the Boost library. Ripple recommends Boost 1.64.0 for all platforms.

Other compatible versions differ by platform. Boost 1.58.0 is compatible on Linux but not on Windows. On macOS, Boost 1.58.0 is not compatible with the Clang compiler version 4.0+.

Learn, ask questions, and discuss

Related documentation is available in the XRP Ledger Developer Portal, including detailed reference information, tutorials, and web tools.

Other resources:

Upcoming Features

The previously introduced fix1543, fix1571 and fix1623 Amendments in XRP Ledger version 1.0.0 are now open for voting. Ripple expects these amendments to become enabled on Tuesday, 2018-06-19.

An upcoming version of rippled will switch to using the Boost.Beast library instead of the Beast library from the rippled source code. As part of this change, the minimum supported version of Boost will change to be a version incorporating Boost.Beast.

Ripple does not expect to enable the SHAMapV2, Tickets, or OwnerPaysFee Amendments before the next release of rippled. These Amendments have been disabled in the source code so rippled version 1.0.1 will not show them as available. Ripple plans to re-introduce some or all of these amendments in a future version of rippled.

1.0.1 Change Log

Bug Fixes

  • Improve JSON exception handling

  • Fix a corner case when decoding base64: Under some corner cases, the base64 decoder would not allocate enough memory, which could result in spurious errors.

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