Edoardo Farina, CEO of Alpha Lions Academy, recently shared a video of Ripple’s Chief Technology Officer (CTO) David Schwartz, where Schwartz delved into the fundamental aspects that contribute to the effectiveness of cryptocurrencies.
According to Schwartz, one of the pivotal innovations introduced by Bitcoin was the concept of proof-of-work. This mechanism ensures that transactions are validated without the need for a central operator, making the entire process decentralized.
As Schwartz noted, “The magic comes from the fact that there is no central operator. All transactions are public.” This decentralization, combined with the public nature of transaction rules, allows for an open system where anyone can enforce these rules.
Early adopters of cryptocurrency technology, including those at Ripple, recognized the potential of this new system in transforming various aspects of financial transactions.
Schwartz highlighted that the initial focus was on improving payments, particularly international ones. He stated, “Payments are a multi-trillion dollar problem,” pointing to the significant challenges associated with traditional payment systems.
Ripple’s focus on cross-border payments was driven by its inefficiencies compared to domestic transactions. Schwartz acknowledged that while domestic payments have their issues, international payments are significantly more problematic.
“Anyone who’s made an international payment probably has stories of bad experiences,” he stated. This focus on cross-border payments is strategic; by addressing the most problematic area, cryptocurrency solutions have the potential to demonstrate substantial improvements over existing systems. Ripple has succeeded in its goals, as the World Bank has endorsed Ripple as the most suitable cryptocurrency for cross-border transactions.
The idea behind XRP is to address existing problems and eventually revolutionize the entire payment landscape. Schwartz was realistic about the timeline, stating, “The worse the thing you start with, the less amazing you have to be to be better.”
SWIFT is notorious for its inefficient payment system that can take days to complete single transactions. This makes XRP stand out as a superior product, as people can complete transactions instantly and with much lower fees.
XRP could also see significant global adoption soon, as the BRICS bloc is looking to move away from SWIFT and the U.S. Dollar, and has announced a crypto-based replacement. Although it hasn’t been explicitly confirmed, many believe XRP will fill this role, significantly boosting adoption.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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