Kind. Of intro Dave I'm. Not the man of the hour though these two are we, have the, founder of ripple Chris Larson, and we have its current CTO Stephane, Thomas, we're. Very very excited to have them this is gonna be an awesome talk a, little, kind of brief intro, Chris. Got, his MBA from Stanford he, started alone which is kind, of a mortgage lender it, was actually the first platform to freely, give out FICO, credit scores. To its users. He started prosper, which is actually the first p2p, peer-to-peer, lending. Marketplace. In the US and. Famously, he co-founded ripple, labs which is a subject, of today's, talk so we're really excited to have Chris here Stephane, Thomas is a CTO, of. Ripple, labs. He, was the CTO of numerous. Tech companies, like eel owed and tax payer he, founded, we, use coins which, created this kind of Bitcoin primer video, which, amassed 8 million, views and was. A primer for a lot of people to just learn about kind of the basics of Bitcoin, and it kind of blew up on the website check that out and, he's the board of directors, uh he's. On the board of directors sorry at the Jay s Foundation and he's the current CTO, of ripple. Ripple. Is describes. Itself as the only enterprise. Solution. For. Blockchain, it, allows institutions to, send money globally. In, a fast, frictionless. And cheaper, way and. It's brought it's kind of broader, eventual. Aim is to create an internet, of value which I'm really excited to talk to both of these guys about so. Without further ado please, give. A hand for Chris and Stefan. Awesome. Guys so, can. You guys just give us kind of a brief bio in. Your own words your, career and how you came. To found, ripple labs and, then get involved great, habit - done first of all thanks for having us and thanks. For not making a Bart Simpson jokes appreciate that, so. Yeah. As you mentioned in Infinite, act for about 20 years now with. Kind, of two startups previously. Alone. And prosper kind of the common thread there those.
Were Focused on the consumer ripple. Obviously is what was not enterprise and there's some learnings that I had, from, that else here later. But, the idea there was using the internet to democratize, finance, I think. We did a lot of good there, but. We were always limited by just. A fundamental lack of infrastructure, in in FinTech so, kind of in my view FinTech, it really hasn't even started it. Has sort of been a stepchild. Of the internet, boom. Because, FinTech. Really has to involve both data. And money, and so far you've only had the ability to move data. So. There's. Both a lot of excitement a lot of frustration. That we couldn't go further. At, the same time was. Always keeping an eye on what was going on with virtual. Currencies and, you. Know Bitcoin. Obviously it was a real breakthrough but there's been a lot of attempts, over the years and so we were watching things like, linden. Dollars which was currency. And you, know, that. Kind of existed in the early days second life phil, Rossdale kind of an amazing guy is still the coolest guy in crypto, right you. Know things like Vermont dollars, kind, of this idea of local currencies in a very small community super, interesting. Obviously. Beans and floors which were too big well funded. Projects. During the first calm that, sort of you know failed spectacularly, but. It just seemed like it was a matter of a matter of time before you'd, have a global. Digital. Asset with no you, know kind of government backing and. No counterparty. As. Far as ripple itself, that really essentially go back to about oh four, there. Was something, called the ripple project, created, by Ryan. Fuger a, Canadian. Gentleman. Is just really a neat, guy and he, tried really to. Kind. Of give birth to this idea of a peer-to-peer. Platform. For. People. Exchanging, their own credit. And essentially. Their own currency every person would have their own currency, super. Interesting concept, that, was, a big part of what influenced, us kind. Of fast forward to 2011 and, there, was these three geniuses that got together, Arthur, Brett Oh Jed, McCaleb and David, Schwartz, and, this is of course after Bitcoin was created a couple years earlier they, were fascinated by what bitcoin, did but they're frustrated, by the enormous. Waste of energy that, is sort of at the heart of mining, that's the core part of, Bitcoin. So, they set out to build a more efficient, consensus. Algorithm and they. Can move something really beautiful, they, also were inspired, by what Ryan Coogler had done at the ripple project and kind, of also brought in that idea of kind.
Of Path finding algorithms, so that anything, of value can. Be exchanged. Along with that digital asset, to, really I think that was kind of the birth. Point of this internet value the intellectual protocol which we'll show in a little bit actually. Has it's almost like an overlay, protocol, over blockchains. Within also traditional, financial systems, and that, allows you to innovate, in different parts of the network independently. Instead of having this sort of central, governance, model where everyone, has to agree to any, rule changes that are happening I think this is like a critical, point I think we came to the realization, that a, blockchain. Was not going to be the solution to, the biggest, problem we think the world has right now in this whole FinTech, area which, is there is no internet of value and. Why, block you know and a lot of people talk about, bitcoins. Gonna be a new protocol for money well. Just, it's, really a database right so a single. Database or a single network network cannot be the network of networks and, so. That was kind of the big flaw and that's what led to I think you, know Stefan having this kind of aha moment of the, need for something like IOP which was a dangerous moment for it was scary at first yes like we were trying we were out there promoting this acid like extra period, telling everyone hey you, should put all your balances on this ledger you should do all your transactions, this one system and. We knew the friction from that but then again like stepping, back from that and suddenly saying like oh they're gonna be many systems, it, was very scary and so we actually, waited. Almost a year to publish the white paper until we had you. Know in our minds have resolved a strategy, around what's. Extra piers role in this new world and how do we make, sure that our. Technologies. Are still needed and is still necessary and, and can, can benefit this new world like how do we we are kateri thing to serve this new world so. I think we're still in that the process of like rolling out all the different pieces but. It was that sort of one-year period from I would say. You. Know mid. 2014. When we first had that realization to, October 2015, when the white paper for aunt Alicia came out what we tried to kind of put all the pieces in place for it because. Ripple, always was different from Bitcoin and then you could put anything of value in it right so this idea of kind of we call it IO use or, balances, but really, being value agnostic, and that, then being the engine for for. The exchange of that thing of value, but. Having the combination of ILP with XRP we think that's the that's, kind of a killer, formula, yeah now, you can have any type of value like any currency but also any type of ledger so like anything, from a centralized ledger to a blockchain and, if we look at kind of seventh way about kind of the macro problem that we think in, the world has its lack of an Internet value.
You. Kind of argue that this gets to the heart of the problem with globalization which, is obviously under a lot of stress today right it's kind of not working for a lot of people and we kind of we. Don't think of it as like well globalization, is bad we think of it globalization, is actually incomplete, until, you have an internet of value you really can't have true globalization, you sort, of need these three core interoperability. Technologies. Working all together you need interoperability. Of data of goods, and money, right so the world today of course. Has interoperability, of data you know it's completely, transformed the world over the last 20 years it. Has the interoperability and goods through, you. Know a simple thing called the shipping container which. You know before, that was invented shipping, stuff was incredibly, inefficient and, labor-intensive stuff would arrive one port had to be ripped apart and, reshaped and, with a shipping container you, know your ship. In the truck any, port in the world you have interrupted goods since the 1950s, that's. Sort of what an internet of value is it's like the shipping container for value and again, that, can't be a blockchain a blockchain is like a single shipping company that. Will you, know you'll max out that shipping company and you'll have a dependency, on that one shipping company, shipping. Container you can create endless shipping containers it has no effect on any. Other shipping containers it deployed that's sort of what ILP is almost the ultimate decentralization. That's. Kind of what we're, thinking about it with the technical people in the audience is a stateless protocol so you can literally just run it over a different system so it, doesn't, keep any balances, in subject and then we think really good things happen when the world finally has a full, kind, of globalization. Platform. But, this has to happen and and, again what, is this meaning now that we don't have it right now it means you, know we all know 750, bucks to Europe is kind. Of impossible right yeah we. Know, the. Example, of the aaron b host in. Tanzania, who should. Be making 29, bucks to on a rental and by. The end of days nine, bucks is showing up this is an actual example right, so. That's a that's a problem with relatively big amounts of value think about the, two billion people in the developing world they the, Gates Foundation would, say they need to be able to send 50 cents to, be real. Participants, in the global economy take. That even, further if you think about all the connected, devices and, applications. That. Probably, should be empowered, to send value that might need to be you know a thousandth, of a. Penny that's. Just not possible until, you have this internet value in place so the world is being held back by this and we think that's the true breakthrough, that. This whole whatever you want to call this industry, really. Is all about. There. Are some detractors, of ripple. That say it's kind of a centralized, blockchain, or, the enterprise, blockchain. You. Know a lot, of Bitcoin loyalists, and Bitcoin, in general might, have come out of kind of an anarchist. Or cyberpunk, kind of movement, early on, as. Part, of that. And and. So that that's kind of the general criticism so I wanted to give you guys a chance to respond to that and then I'll combine the second question cuz Stefan has an awesome presentation he's gonna give the, second question is we. Are, living in a crazy kind of environment, in, terms of cryptocurrency, just, speculation. On the price, of, tokens. And blockchains. Do. You guys think we're in 1999, right now is this the the you. Know kind of a dot-com bubble that we're experiencing. So, yeah those two questions because I'll take the first one you can cheer, for calm, so. First. Of all the enterprise part I take as a compliment, I think that's precisely, what we're trying to do is we're trying to build the first blockchain, that can actually be used for real you. Know real use cases you know like when you think of you. Know any distributed system, when, you take a distributed, systems class the first thing your professor will tell you it's like your distributed system is still only gonna be as good as the nodes it runs on and so, if you think of Bitcoin miners they're only incentivized, to basically, hash as efficiently as possible they're not incentivized, to provide physical security, for the data centers, they're, not incentivized, to make, decisions, in the interest of the network so they have, a very pure incentive, to just hash as much as possible get paid. Rinse, and repeat in. The case of ripples since the validators are chosen by the users if a validator, for, example votes against, a block size increase or something like that if there were an issue in ripple, then. You. Would eventually find.
That Users would no longer add that validator, to that list and so that validate it would slowly lose influence and. So it's, not as much of a system that's like tailored to users like Bitcoin is where you know anyone can just run a node and it just Auto configures, itself and. Connects to the network you do have to do that validator, selection, manually, you have to think about you, know politically. Speaking like, which validators, do you want to empower with your node etc, so, it is more targeted at like you, know actively, being managed by companies, things like things of that nature but. I think the reason that that makes a lot of sense is because when, you actually go out there into the market, you know the the evil people you mentioned, I'm an anarchist okay you know so I I really want to empower. People right but, the people that you got to fight or not the, like, all the banks they're they're a few. You know very very powerful, players in the market that sort of take a little bit off the top and those, are the people that you want to bypass and then everyone else like there's a lot of small banks and regional, banks and so on that we've talked to that are really trying to provide you, know better user experience, you're really trying to provide lower fees etc those. Are the companies that we want to work with and empower and it's not just banks as payment providers mobile money providers, and. So on so that's, kind of where that different, approach comes from and on, the centralization point, I would kind of say that there are a lot of different definitions of centralization, and you know we're sort of going down a list of meeting more and more of them as we progress, one, of the ones that we we don't, meet yet is that we still run, a majority, of the trusted, validators, but. That's something that we're, this, year going to to, start rolling out in, terms of we, have already got a lot of third-party validators, running so people, are going to start trusting them this year and. So it's. Just one more step to kind of go in that direction and I think if, I compare it to where we were with Bitcoin, like, with Bitcoin we had some level of the centralization again meeting some of the definitions but not all for, instance there's no geographic, diversity it's very concentrated in, China right now but. We didn't have a very good road map in order to how to overcome that because the the system, is really, you. Know it's just sort of the incentives. Are set up in a in a I would say now say bad way. Whereas with ripple we have the, incentives are in order and so it's just a matter of like you, know validators having the right you. Know amount of operational, histories that people actually start trusting them and us having enough confidence, in the software to actually you. Know continuously, let go of more more of the reins here so I think. It's for. Ripple it's a clearer road map to get to a very high level of decentralisation yeah and bottom, line in, the, centralization is, there's kind of a bright line you know you know if ripple.
Did Not exist with the network continued. Function yes so, that's kind of that you know hard line of which. Side you're on and then I think it's Stefan's. Point variety. What kind of gradations, from there and, then second. I think on what's, going on in the market today so. Obviously. You. Know a really interesting you know time in the space clearly. There is a lot, of speculative. Interest that's going on and I kind of break that into, kind of two parts. One. Is, there's, clearly a lot of. Almost. Like crypto, day trading going on it's almost like the days. Of the early internet with all the day trading and I think you probably if you look back on most, people that were day trading back, in 2000. I bet it didn't work out that well for for. People that were doing that people shouldn't do that you, could lose all you know you can lose everything. It's, it's just not a good plan people should not be putting the retirement, money, toward a training you, know crypto currencies, and. There's, a lot of skepticism that you you see out there. Nathaniel. Popper for example the New York Times you know he writes about, that. Skeptically. And he's right to be skeptical so we think you know that people should be very careful with that but, there's a second part of speculation, I think is being now increasingly, driven by institutions. So, institutions. Funds we, call it the wall street tidal, wave it's. Sort of coming and coming. Into play here and I think what's going on there is that very. Sophisticated people, are saying the investors are saying look. There's some meaningful percentage of this is in fact a second internet and. This internet value can, be as transfer, transformational. That's, a longer-term sort, of call that that's going to happen inside. Said that's more constructive. Speculation. And I think those, institutions.
And There was kind of professionals. They've seen what's happened in this last 20. Years of the net the great, promise, the, overhype. The. The you. Know the total bubble the, crash and then kind of fast forward 20 years where we are today if, you look back you probably say probably. The early, promise. Was probably it was probably under hyped given, the impact that all this, has had on human. Existence so, you. Know that's a more constructive, view. The, use cases for, industries, enterprise. Payment. Providers, and, other things that, is coming, on board so. I suspect that sort of ratio of, sort of hopefully, the long term speculative. Injury you know activity. And the use case it starts to look more like what. You see in normal markets, because there's things gonna actually work pretty constructively, together well, the, last point on that I think interesting is, in. The. First Internet that's kind of started with institutions, VCS, and then Wall Street and then, kind of went on to sort of this day trader you. Know dynamic, that you saw it's kind of the reverse of that actually it kind of started with individuals, and now, the institutional. Wave is coming on board so that's a little bit different you, know kind of flavor but. Definitely think the world's never seen anything like this before so it's trying to grapple like what, are the metrics what you know is it you compare the visa you because gold is it, the first protocol that can be monetized lots. Of new questions awesome. Guys really appreciate it Stefan's now gonna give an. Awesome presentation about what's in store on the technical, side for ripple and then, Chris, is gonna stay here Stefan's gonna come back and we're gonna do a little Q&A with the audience so. Take. It away yep. So what, this is trying to illustrate is, if. You deploy, intelligence, on some Network and we envision that there will probably be. Sort. Of a global instance, of it looks like the Internet has, a global instance then. You have these different nodes these, diesel, blue nodes here and we, call them connectors. But they're basically like routers in IP so they basically take, in packets, on one side they, look at the destination on the packet, they compare to the routing table, and then they forward that packet, towards, that destination whenever. You look at any kind of blockchain presentation. There's a pretty good chance you'll see. Some kind of graphic, that has you, know no it's connected, by lines, some. Kind of graph and. You. Know you'll hear things like Bitcoin is the tcp/ip of money and when. We hear that we cringe, a little bit because if, you know anything about how tcp/ip, works and how Bitcoin works there. Are very different protocols. That do very different things in a very different way and. So the challenge that we always have when we talk about IntelliJ is it is actually, a lot like tcp/ip, and through this little, presentation I want to try to convince you as to why I say, that, but. You, know people already have usually, like seeing some kind of blockchain presentation, it already looks a lot like this but. But is a little bit you, know more superficial, in terms of the similarities. And. So if I want to send a packet into this network I just send it to whichever, connect I'm - and. It should find its way to whatever, receive you it receiver I've put on it so, in that way it's a lot like tcp/ip. Now. You might say ok so you're routing these packets, but how does actual, money really move, so. The way that that works, is that once you have sort of a path, and you're sending these packets, each, link, is responsible. For its own settlement, so what we tend to do is if. You have two connectors. That have, a. Peering. Relationship, with each other they're, gonna have this like pay packet, traffic, going back and forth and so they're gonna look at those packets, and then they're gonna eventually settle, and, for, the core of the network it makes the most sense to settle through a digital asset and the reason for that is that they, are very easy to move internationally. Across borders, do. You have very low costs, in terms of when you move them and, since you're going to have a lot of inbound and outbound traffic, it makes sense just stay in that digital asset, to, do all of your settlements.
But. Of course the majority of people, users, out there don't actually have easy access to digital assets yet and, so you do need some kind of some, form of support, for traditional, payment systems, and the. Interesting thing is that all these settlement networks really do is you, know move payments, across, or like move money and so. That's. Something that is supported by all the legacy payment, networks so we can actually do is we can just aggregate, to a greater degree so we wait a little bit longer before we settle and. Then we send a one big payment across you see that kind of at the beginning here with the sender down, there and the receiver and up right where. Those, settlements. Are happening, a little less frequently, and they're a little bit bigger and they're probably a little bit more expensive but they can settle lots and lots of these individual, packets, and. So with this architecture what, that means is that from an end-to-end perspective. We can send a packet, at incredibly, low latency, we. Can send it at, an incredibly, low incremental, cost and so, that's really what makes it feel a lot like the internet you can really just connect. To lots of different services and pay for lots of different things without, accumulating. A lot of fees while doing that and then sure there's a settlement eventually, and you, know hopefully these last. Mile sort of settlements will get more efficient just like in connectivity, went from you know 56k. Modems all. The way up to what we have now where I have Google, Fiber so I'm very happy with that. So. Here. Here's a little. Chart of like the actual architecture. And again, if you're familiar with tcp/ip, you, know they draw the same kind of picture with the four layers, which. Is you, know sometimes called the Internet architecture it's a little bit less detailed than the OSI, architecture, but I won't bore you with that it's just a reference for the people that didn't, know that so. The four layers actually work a lot similar, to the very, similarly to the four layers in tcp/ip. So I just want to go through those four and kind of give, you a sense of how this all works together, the. Way you should think about the intellectual a ER is that's essentially, an abstraction, layer so, that's basically the thing that you, have all the different ways of moving money below it and then you have all the different use cases for moving money above it and it, kind of brings them all together so, in, the case of the internet it would be the, internet. Layer, has. All the different ways of moving information below, it and all the different use cases building, on top of it and so now you can have all these different combinations, I can make a Skype call over my Wi-Fi I can make you, know send an email over my satellite internet so it really doesn't matter what use case I'm using and, which network, I'm on I can combine in different ways and so this is kind of doing the same thing for. Money okay. Now an application layer this, would be sort of the equivalent of like HTTP, SMTP this, is use case specific, you would make different application, layer protocols, for different use cases so. One that we've designed, so far is called SP, SP or a simple payment separate, set of protocol, and, basically all that does is it defines what, internet, sort of identifier looks like so think of that like an email address and. You, could send. To that type of identifier if you wanted to pay somebody is on a peer-to-peer basis, or you could build that into simple apps it's not super efficient, so it's kind of like HTTP, you it's so the general purpose. Application. Layer protocol you. Could make a much more specialized, one so for instance we did an, experiment where we built payments. Into web torrent so, basically to pay the, uploaders, but. Also the content creators which, i think is really cool as if this is like it's sufficient enough that you can pay a lot of different parties in the, flow of whatever a poor interaction, that you're part of and we'll see a demo of that in a bit but. I think this is where I expect a lot of variety, is on the application layer. Now. We talked about the transport, layer so, if you're familiar with tcp/ip, does this where you find your TCP and TCP, is really common to a lot, of different application layer protocols, that build on it and, it gives you some sort of basic services right it gives you sequencing. Of packets. So that your data comes out the right order it, gives you a retransmission if, a packet gets lost it'll send it again and so, on and we have a transport. Layer protocol called PS k2 and it does a lot of the same things it's responsible.
For Doing things like if you send a large payment it'll split it into smaller chunks and then reassemble them it'll, do things like retransmission. Of payment packets etc, so, again. Like I'm trying to really get across like we're, copying from the internet a lot and we have to, give. Them a lot of credit because a lot of things that they do actually, apply to money very well. Now. The intelligent, layer is it's, kind of an interesting one because that's where all the routing happens, and when we first started out I'll tell you one anecdote about the design of this layer which is when. We first started out we assumed, that the routing would have to be quite different because we're talking about money after all we're not talking, about information. And, so we, you. Know we knew about BGP, and how it works and so on but we thought a lot of those things wouldn't be applicable, we wanted to route by the. Lowest cost path we thought that that was the most important thing was was to minimize the fees but as, we're actually building, it we realized that if. You optimize by fees what can happen is somebody in the network just advertised a absurd, rate so they just advertised hey I can exchange one dollar for 600 euros now, that's suddenly the best path to take for absolutely every payment in the entire network now what do you think is gonna happen so that notes gonna go down obviously, that rate was never real to begin with and. So you just the whole thing just breaks down and. So one, of the reasons for the, way the BGP is design is to make the, length of the path one of the primary metrics, and what that does is if someone advertises. Some ridiculous, metrics he's still only, gonna take down his immediate neighborhood, because for everyone else is still going to look like detour, a very long path that they don't want to take and. So it turns. Out that even for money the, length of the path is a very good proxy for all the other things you might be interested in like how reliable, is that what's the latency, what's the fees those, are all lower or tend to be lower for shorter paths and so, we can do exactly what BGP does in terms of routing by shortest path first, and then, using. Other metrics to kind of tie break if paths are the same length, picking. The best one and we just basically add fee is another metric just like the Internet has latency, I already. Kind of talked a little bit about the settlement the key thing to mention here is that all we need from the settlement layers that it can transmit money it doesn't have to be very faster than you have to be very cheap if, it's slower we just settle less often and. Just to give you some examples, of the kinds of things we've integrated with already there's, a extra, PPHN, plugin so that's settling, using the extra P ledger let's, see if most efficient plugin right now that's. One of the reasons that we feel good about the strategy, it's like we're actually seeing in practice, that our own products, score, really well on these different metrics. In, terms of like what ledger would you actually choose for settlement we've, done a lightning integration, so we did a little test where we actually connected, the Bitcoin lightning Network and the light current lightning Network together if you know familiar with lightning it's basically, a scalability, overlay, Network for.
Currencies. Like Bitcoin. And. Then you, could do something like ACH you can even do cash if you want right so you can have a relationship, with an intelligent, service provider where, it basically says like I give you cash up ahead of time or you give me cash ahead of time and then, we can exchange packets, up to that amount until. We reach that balance and then you know we have to settle up again. Okay. Now with all that pretty. Fixed I'm gonna give you a bit of a live demo and it's, gonna go fairly quick so, pay. Attention and. So, basically. What we're gonna show here is the. Easy website maker, okay so easy website maker is an, app that somebody put together and just uploaded, it to github and basically. It allows you to create a website from just having a little sketch and now obviously, we didn't build all the difficult. Parts the AI parts, that what that's what you guys are for. But. We. Did do all the payment stuff so all the payments are actually going through in there's. Actual payment packets being exchanged, and we try to visualize that a little bit later by having, like a log of packets. And. Basically. What this app does is I put in a sketch and it, it goes to one vendor that's, offering. An API, a paid, API that, can turn sketches, into actual. HTML and then I'll go pay another vendor, to actually. Package that into a docker, container and upload, it somewhere and then, another. Vendor to host the actual live website and then another vendor to buy a domain and finally, we'll tip the developer, so I'll go sure what that looks like so first, thing I need to do is I need to pick my sketch so I'm just gonna grab one here and. So this is the sketch of my website that's probable but small to see but it has like some text and it has a little chart and has, some more text and just to be clear again like the AI is marked out we didn't actually create the AI just for the demo that would be ridiculous. But, yeah in the future this could very well be possible so. Now I'm gonna say make my site and now things are gonna happen very quickly so it's, gonna upload that sketch to that AI it's already done and now it's uploaded. The finished, HTML they've got back to. A service, that turns into the docker container and as, you can see on the right and I might do the demo twice too so you can see it again on. The right you saw the total, amount paid this is in extra. Few drops this would be one millionth of an extra piece so total. Paid would be 0.1 x RP, which. Is about what is that like two cents three cents, yeah sorry. - three dollars nobody. Cents point what, oh sorry. Like. Yeah. It's like 30 cents or something whatever. So. You can see like the individual, packets, and there's a couple things going on and I, think I will run through the demo again just so you can see so, first when, we paid that AI, we. Paid us at a one lump sum amount and then the package er is actually, a streaming. Paid. Endpoint so that's a paid endpoint where as we, send it data and we ask it to do things will stream packets, to it to keep it paid and. If we ever don't. Keep up it'll like stop working, until we pay it more and. Then we deployed it to a host and bought a domain and then, sent, a tip to the developer and I can actually click this button here and then look over here and as, you can see our website is now up and I can I show you it's like all.
This Running locally but we. Got a domain insect right it's like set it up, so. Let's. Go through a demo one more time just to you so, you can see kind of the the, streaming payments part a little bit better, so. I'll pick the website website. So. Here on the right you can see like total paid right now is 500 drops it's to pay for the AI now, we're streaming to, pay for the packager so this is going in 250. Drop, intervals, and then. We have a large expense to host the website. 9000. Drops it's over 9000, to. To. Actually, buy. The domain and then finally we tip the developer, a thousand drops and so if I make an app like that I've built, in business model and I think that's really the key, point to get across here's I think this, will have a huge impact on the, web where, think about if I start a convenience, store I don't need to think about what my business model is my business model is people pay me when they come buy things when I opened a restaurant I don't think about my business mom business model is people. Pay for the food that they eat on the internet we have this weird thing where like there isn't a good way to charge people for using, your website and so we build advertising. We build subscriptions, and all kinds of hacky, workarounds, for like how to get money out of people just from visiting your website and I think this will present a pretty efficient alternative, in, the future where people can just pay you for for, the for using your site so, that's it and again. Back. To this. Thank. You thank, you Stefan. Cool. Not now we'd like to open it up to questions, from you guys does. Anybody have any questions, thanks. For the presentation, again. Yes. So there's like a lot of different coins that. Deal with payments, like, ripple. Like, coin Stella, for example that I've heard of can. You go like, a little bit over what's the different like the basic differences between all, those different payment platforms, and then also do. You see like one payment platform, just, dominating. And we all just use one of them or can, these somehow, like live in harmony kind of like USD, and euros and whatnot. So. On, the, second. Part I, think, it's gonna shape out a lot like what you're seeing with fiat. Currencies I mean you know the world kind of has four, majors, maybe five majors, and then. There's kind of a you know everything. Else. And. I think that probably plays out here simply. Because. Particularly. With this sort of Wall Street wave that's coming a lot, of those institutions they're not buying how, many two thousand different, you know kind of coins and platforms. Out there they're, sort of grabbed and I don't know top ten or five or it's some smaller number, and you. Know in. Currencies, liquidity, baguette baguettes liquidity, all this is about how. Much liquidity, is. Kind of you know kind of supporting, these. Platforms, and these and these these. Currencies, or commodities whatever, you want to call them there's, still a lot debate on what they actually are. So. I suspect that's gonna accelerate and Union that, liquidity that attracts more use cases like. For example ripple. The company focuses on the enterprise use case but, you know we see these things we see X R P is very much a general, global. Digital asset, without, a counterparty, so, you. Know you'll, see more and more use cases popping, up from different angles. And that. Just kind of drives more liquidity so I think that's probably the way my. Opinion how it pans out, yeah. I think the reason, we developed, in Taleggio and the reason we built an interoperability, protocol, was because of that exact realization, it wasn't going to be everyone. Using, one system, there was going to be a number of different systems and actually, behind. It as another real, which is you know my goal has always been you know to solve the problem, of you. Know, friction. Payments, right and so I. Realized, that the centralization wasn't, necessarily the solution because, you see PayPal, they come out they are free then eventually to check up their fees when they have established market, position but then you see Bitcoin doing the same thing not necessarily with us as much sort of agency, but it still happens that way and so, what you got to think about is right, now when you're on a payment network you can only send, money to the people on the same network and.
That's Kind of like pre-internet. Online. Services where you could have like CompuServe and you can email anyone on CompuServe and you can you, know use any services that are on CompuServe but you can't access any services that are on geni, right and so, CompuServe. Has this like moat they have a defense ability around their reach and so, that's really what you got a commoditize. Or what you got an attack and so with payments, it's. Still that way today where like if you're on the same payment network you can pay each other if you're on different networks you can't if. You want to pay from your PayPal account to a mobile money account in Tanzania, you're screwed you can't yet. I can totally go on my, mobile phone in Tanzania and open any web site in the world right so we need that kind of interoperability, and that's really what creates the competition, that drives down the cost the. Reason, we think that XRP, is going to have a role in this system is because we've. Been doing I mean not to toot our own horn too much but like we've. Been doing really well in terms of like the performance and, the characteristics. Of the protocol so I think a lot of people will choose to, use X or P if there is sort of a lot of competition, was like right now you use Bitcoin, even, though it's expensive you use Bitcoin even though it's slow I, think if there's a lot of competition people will pick the most efficient, which would be X or P right now you, know that. As well it's, kind of in, an environment, where a lot of the volume I think is speculative, I actually think that. Kind, of use case has a greater tolerance for. Cost. Speed, kind of doesn't really care right, whereas. As you start getting into kind of these six cases we need like you know millionths. Of some, kind of unit that. Matters a ton right so as the kind of the ratio, of. Of real, use cases too speculative, volume, changes, I think that dynamic becomes more important. Next. Question, Thanks, thank. You hey. Thanks, so much for coming my, questions around so if you're talking about that, XRP, and crypto czar the internet, of money the, big difference between money, and data is that money is regulated, and banks. Certainly you know if the word, that can like the equivalent of running the phone lines before have, a pretty big incentive, to. Innovate. And sort of get ahead of a change, that that is coming so. You could see them easily upgrading, the Swift protocol, to be able to move money internationally, a lot quicker and so, I'm curious how you guys see, specifically. XRP, living. In a more regulated, space I think you know crypto. Sort of took the world by storm when governments are gonna certainly respond, the next year too so, why do you think that XR PE is going to be able to, live. In a much more regulated industry, than data is especially. Because like you could see banks upgrading, Swift to be able to support you, know maybe like sub minute transactions. Instead of, transactions. That take days yes, I want, to like quickly, question, some of the premises in there so. I think a lot of the people in the room I think are very young and so we, grew up after, the deregulation, of data and, so like the internet came out and a, lot of the laws that were, around before then copyright, law, you know cryptography. Laws, export. Restrictions around. Algorithms. Things of that nature you know actually, got removed and a safe harbors got created, because, the internet kind of post the technology, that was on the one hand very useful, and on the other hand kind of in a legal gray area so I think that, the. Technology this if you use it it just feels so incredibly, useful that, it's hard to imagine how regulations, wouldn't, be built around it I. Think, that there's definitely an opportunity for people to be thoughtful, and intelligent. About, how to how, they approach. The technology, in the meantime like, you want to be compliant. You want to do everything. That. You can to kind of you know stay within the letter of the law but there are going to be, ambiguities. In terms of like just the. Law is not written for these kinds of use cases so. I think, that's one thing and then, as far as like X or P oh I think I'll hand it off to Chris yeah, I mean.
You're. Raising a obviously a key part and as I mentioned before the. Internet value is kind of equal parts, capital. Technology. And compliance, compliance is hugely important, and and the reason is simple I think it's just because governments sort of want to have a monopoly I think, it's actually a more a, question, of, you. Know data is powerful but money is more powerful right you, know data can show you you. Know a life-saving, medicine, your family might need it, can't buy it money can buy it on, the flip side you. Know data can encourage a terrorist to do something awful money. Can buy the weapons right so the stakes are higher which. I think actually this is gonna have maybe a more profound effect on earth good and bad so, regulators. Have got to be there every step of the way this fantasy, that, somehow this, is gonna bypass governments. And bypass, compliance, you, know what that's just that's, just be us and you know what nobody wants that nobody. Wants that that is a champagne. Problem with a bunch of rich young people, that, can sit there behind their computer screens and like block out a lot of bad things that can happen so. It, just can't go that way and. So, I think we're trying to think about that try to be pragmatic about that because that's the only way we're gonna have impact and, if you look at people that are trying to support what's going on in the developing world. They. Are very much wanting to work they're. Not trying to go around they're trying to work within the system because, they know that's how you're gonna have impact. So. That's that's kind of the way we we see it your question about Swift by the way, the. The, problem, with that point of view is Swift, only deals with the data they. Have a correspondent. Banking partner that deals with the value and that's off any sense, of an internet avalue the whole point here is that something. Like inter ledger and, XRP, can eliminate the correspondent, which is actually where all the juice is right that's where all the waste is that's where the settlement. Risk is that's where the failures are that's where the time is so, Swift actually doesn't, have the, the. Combination. Of capabilities, to do what, you're saying. Sorry. So thank you for the question. That's. A pretty cool demo and I just wanted to learn a little bit behind. The scene like for, example AI, how, the food, pewter a Halle, Manning goes to a, pot. Okay. So, we built a protocol. That kind of takes into, ledger on the one side and takes, HTTP, on the other side and essentially. You're making rest calls you're making API calls to. These backends, and the, first time you make the call they'll respond, with 402, payment, required which is a sort. Of an error code and HTTP that was already. Reserved we were like great that works for our use case and. Basically. It sends you back a header that tells you all the information that you need to know to make intelligent payments, to that exact.
Endpoint. Or like the API server that runs that endpoint and. So that. Server will be listening, for intelligent, packets in addition to the HTTP, requests. And. So when you start paying. Yeah, it'll go back into that same receiver, and then the receiver will then credit. Your what, we call like a token and. Then the next time you make a request it has in the head or your token, and so the receiver will know that you've actually funded, that with some packets and then you will you can proceed through the through the program the. Streaming version, of the demo you saw that's. A little bit more complicated this probably goes beyond. But we can maybe catch up about it later. And then, one. Thing that's also interesting is that one of the services, which is the this, thing that builds a static site into a docker container actually. Itself. Pays another API right so you have another API behind that and so, one of the things that's really cool is with these streaming payments, we can actually have. Sort of an API to take send money and. It immediately spends, it as it's trying to process the requests and then maybe he sends a little bit as profit to the developer, and then returns the results so there's. A lot of cool stuff you can do with it. Thanks. Thank. You guys for coming to speak today, I'm. Kind of curious to learn more about how you might, prevent. Money, laundering and. Companies. That participate. And you know, you. Know like. The payday loan type, companies. From coming, on the system that exploit, people financially. You, interested to learn more about. Yeah. Um, so. I mean I think we, we. Really try to focus on you, know kind of the bottom of the payment stack so kind of on the infrastructure, part. Of it and. Got, a reason for that is that a lot of the things that prevent, bad things from happening are kind of top of the stack and a. Lot of that actually doesn't need to be reinvented, right and the. Way we kind of think about it's, like let's focus on what's really changing, and we think this is the interoperability, it's, the idea of a digital asset with no counterparty, that can be sent anywhere in the world that's that's neutral so, those are the things I think what we can we can can. Change and, then, piggyback, off of that's. What we like kind, of the enterprise focus now is for that is that first beachhead. You. Know piggyback off of what already exists for hundreds of millions you. Know of people, the. Other thing I would say is that if this, internet value becomes a reality I think you know the prevention of things like payday lending. Obviously. That has to be, regulated. That's a big part of it at every level but the other big thing to what Stefan mentioned before is sort of the commoditization, of reach.
If. You have that you suddenly know every market has way, more competitors. For. Financial products and was something we saw at prosperity law we got frustrated, with because you we, were kind of us online you couldn't you couldn't transport, it to another market because. You were in another network right that this future vision I. Think is that the. World is one big financial. Supermarket. And you, know everybody's competing in every market I think. That goes a long way but you still need all the other you. Know kind of regulatory components. Pretty. Much existing, I'd some, me go away but I'd say probably most of them don't know, you, yeah, I think they with with you, know you mentioned any money-laundering. I think there's sort of a long list of things that, are actually completely separate issues right they're sort of consumer. Or risk there, is any. Money laundering, there is. Anti-terrorism. Finance, like there's all kinds of different things so you have to think about when you're building a payment, system and so, if. You have a stack like this they'll, fit in different parts of the stack like for instance consumer, protection, that would fit in the application, layer so if you're building an application where. Consumers are sending money you, have to think about you know how to protect those consumers, from sending it to the wrong people if, you have if you think about risk, a counterparty, risk that, would fit in the sort, of the ledger layer right so you have a counterparty. They settle with you on a certain schedule how do you make sure they actually settle with you so. There, are a myriad, of things to, think about I think. That it's, kind, of illusory for us to come up with all the solutions I think we're trying to be a thoughtful in terms of like getting, it to a point where we can start experimenting with it and kind of get more experience with it, but that's going to require sort, of a commercialization. Of the technology, to really think about you, know all of those use cases and. I would also highlight that you. Know ripple has a commercial. You. Know stack, and a commercial, feature set and that is very, much like Chris said like kind of writing within the existing, regulatory framework, and then we have the open protocols, which are maybe a little bit more forward-looking and, I think some of those questions are more difficult there so what you saw us present today is.
The More forward-looking stuff so I think some of those questions are still open there, thank. You very much thank, you. So, since. The tech, is currency, agnostic. Why. What. Would be the incentive to choose XRP, over, fiat or any other cryptocurrency. So. This is where it almost left to like ask, my colleague up on stage because you. Know we have our team who's actually trying to integrate with these different, digital assets, and, you know different payment, systems and. It's. Just a like. Many. Orders of magnitude of difference between a, sir P and let's say Bitcoin, instill. Several, orders of magnitude between, X or P and something like litecoin which is known as a more efficient so asset and like. It's. Just a pleasure to, work with and part of it is it's, been designed for that right like it's been designed to be used, as the settlement, acident into ledger and so has. A lot of functionality like payment channels, it's built in a certain way that, are incredibly, efficient, for. This particular use case and so, I. Think the big answer the main answer is right. Now it's just the best thing to use like we talked to people hey let's set, up a connector well what do we peel with well we could use litecoin, but what we could use X or P but XP will just be cheaper so let's. Use X RP and. So I think as much to. The extent it like these connectors are gonna be competing with each other and they're trying to think. About their margins, XP, so it's gonna look like a very good option for them yeah in this world you'll just you'll need some, digital, asset, that is, super, fast super cheap endlessly. Scalable, that, will, serve the world very well right better than let's say using a, dollar, or using a euro right something that is a neutral, to any network so, we're, absolutely confident, that some, digital asset, will. Be a key, part of this internet of value but. We think that sort of fast you, know cost and. Scalability are gonna be those key things and that's, what's gonna drive the liquidity that's gonna make these things really useful yeah, and like extra fee is not static either it's like we're, constantly thinking about how to help improve it there's, a community out there it's thinking about how to improve it so you. Can expect that it will get better as well as you. Know time goes on. Final. Question. Hi. So I was listening in. The very beginning of your, presentation. About, how you think except, rates better over a Bitcoin in a sense that bitcoins that a lot slower a lot more expensive but, um but, is there for a reason right because it requires, like at least six confirmation, across the network in one first transaction to happen and and, that is their emotional address the double spending problem so I was just curious like in your own words how does that XRP address, the double spend problem if it's just a confirmation between the two notes yeah, so. If, you're not technical, you know do something else for a little bit. Because. There's no way to answer that question without getting into, some of the technologies so Bitcoin. Uses a consensus, process which, is essentially, based around the assumption that a, majority, of hashing power will never be held by you, know a coordinated, malicious attacker and. So if you're watching what, the majority of hashing power is doing you'll, tend, to be on a state of the network that is reasonable, and doesn't contain you know reverted, transactions, and so on however. The, protocol as such does allow rollbacks. Right so you can if somebody else presents, you with a chain that's longer has more hashing power behind it you will roll back your transactions, and switch to that and I, know that because I was one of the first person to implement. A full node Bitcoin, reimplementation from, scratch, so. I wrote that code and it's very complex, annoying code to write so I will remember that forever on, the ripple side such, code does not exist there's no way, to rollback the network now how is that possible well the, way that ripple works is as. I mentioned before the, users select these validators, and, then we essentially use that input as a as. An input to sort of an algorithm where. We, look at the graph of what people selected, and then we run a consensus. On, validators. That are central, to that graph or like that are highly. Trusted within that graph and so it's sort of this two-step, process and what that means is that when. The first step is completing, your giant you have identified, which validators, you're looking for you. Don't have to worry. About B there being like more hashing power just over the horizon like once you hear from the validators, that you've identified as, being the the ones that.
Or Validating, or like the ones that you're listening to then. You don't have to worry about some other other validator, coming in later saying like no actually we decided this you just didn't hear about it yet and so, there's no need to rollback or to, to. Rewrite, history once Valladares have committed to a decision they can't change their minds essentially, and. So that, has a couple, of. Impacts. Or like a couple of ways that the protocol is different because of that number one you, only have to wait for one confirmation, you wouldn't wait for multiple, confirmations, because validators. Can't change their mind you can't roll back so there's no probabilistic, aspect. To it, number, two is. We can, process. Or we can create blocks on the cadence so we can create, blocks unlike a fixed. Interval as opposed, to a random. Interval like Bitcoin where you, know blocks can come out very close together they could there could be no block for a long time because, we know which Valladares are supposed to generate blocks, they can generate them on that cadence and, then. Finally. I think the cover of thing yeah. Yeah. Whatever there's, a really good talk on, why. Shouldn't call it really good but there's a talk by myself on consensus. That. You can find out from the consensus, 2017, conference where I go a little bit more detail and I'm also happy to like talk to you afterwards but that's kind of the high level quick. Description cool. Guys. Thank you so much for coming do, you have any final statements, or do you want to tell people how they can get involved in the ripple community, at all, yeah. So for, IntelliJ, there's info Joerg which. At the time of recording is horribly out-of-date but hopefully by next week should be you, know showing all the latest great stuff there's. A community group at the w3c called, the intelligent, community group that's open to anyone so, you just register we have a mailing list where. We discuss you know how these protocols work together all. The code for you, know the demos and everything you, can find that on github.com slash. Into ledger and slash in Taleggio Jas and. Then, for ripple over comm, if you're a bank you, know let us know reach, out if your payment provider maybe. Should work for Google payments or anything like that let us know and then. For. There's, another project which we didn't really mention today but, that's also was. Also used in a demo in the background which is called cotija so that's basically the hosting, system. That's paid with into ledger and we uploaded the website to it there's. A lot of cool use cases around hosting, if you think about serverless hosting, etc so if you into that there's Kodi Astorga, swell Co di you, ask that work awesome. Kristef on thank you so much for coming really appreciate it give it up. You.
2018-02-27