Panos

Over the past decade, we have witnessed the emergence of new revolutionary technologies such as blockchain technology and crypto assets. Blockchain can be described as a value-exchange protocol. In this regard, it is said that what the Internet did for the exchange of information, the blockchain will do for the exchange of value. Just as the Internet revolutionized the use and exchange of information, same with blockchain technology that is set to revolutionize the recording and exchange of value.

As we are making the transition to a digital economy, it is important to focus on how the new technologies can improve our daily lives and add value to our society and global economy. Connectivity, accessibility and interoperability are essential as the increase of globalization provides a need to transact and connect with each other no matter where we are. Businesses and individuals increasingly expect everything in their lives to move instantly. This is mainly because of smartphone and apps where nearly anything is attainable at the press of a button, but when it comes to money and financial service providers, they are often left with bad experiences.

The needs of individuals and businesses sending payments across borders have significantly evolved. They have traditionally been served by retail banks, which are not meeting their payment needs and are demanding real-time, low-cost and fully trackable payments on a global scale. But today’s inefficient system of moving money around the world means high costs for banks and payment providers.

This is because an obsolete payments infrastructure, designed almost five decades ago, leads to expensive and slow transactions that can take days to settle with little certainty as to their ultimate success. This experience runs contrary to people’s expectations for an Internet of Value, where money moves as quickly and seamlessly as information. There are more than $5 trillion sitting idle all over the world in bank accounts just to make transactions around the world. This could change if financial institutions adopted blockchain technology and crypto assets, which would lead to less costs, increased speed, better liquidity management for financial institutions and better customer experience. Blockchain has the potential to change almost every industry out there. It can create a more efficient and prosperous world. Crypto-assets have also sparked a broader debate on payments innovation and on the roles of the private and public sectors in devising new ways to make payments more affordable, efficient and inclusive.

Consumerization of these solutions, and technologies including mobile wallets and blockchain, are leveling the playing field and allowing new entrants to compete with the handful of large banks that have historically dominated cross-border payments. Blockchain offers a cryptographically secure, end-to end payment flow with transaction immutability and consistency in information sharing.

The Internet of Value means moving and exchanging value like information is exchanged today in the Internet era. With the Internet of Value, a value transaction such as a foreign currency payment, can happen instantly, just as how people have been sharing messages, images and videos online for years. And it’s not just money. The Internet of Value can enable the exchange of any asset that is of value to someone, including stocks, votes, frequent flyer points, securities, intellectual property, music, scientific discoveries, and more. A truly interconnected world.

Until now, selling, buying or exchanging these assets has required an intermediary like a bank, credit card company and generally third-party services. Blockchain allows any type of asset to be transferred from one party directly to another, with no middleman. The transfer is validated, permanent, and completed instantly. Blockchain technology along with crypto assets are key elements enabling this process. By creating a shared ledger where people can own their own data, it also enables a shift in the locus of value within economy to the individual and networks. In a world of limited connectivity, limited transparency and limited peer-to-peer trust it was necessary to have third-party institutions to define, quantify and authenticate sources of value within society and economy. But in a world of pervasive peer-to-peer connectivity, transparency and trusted networks, value can be defined through a negotiation between peers within distributed networks.

On a macro-economic level, the Internet of Value could also help drive down the cost of goods and transactions as the liquidity would increase. In today’s country-specific systems, companies and banks must tie up large sums of money in local currencies for countries in which they do business in order to make transactions. An Internet of Value that eliminates the need for these accounts, suddenly frees up large sums of cash that can be more effectively put to use in the global economy. The potential use cases are plenty, from instant transactions to tokenization of assets, lending, smoother international trade, more robust digital agreements, and more.

1. Settlement of funds

Blockchain technology and crypto assets can simplify the entire process of payments and remittances, by removing unnecessary intermediaries. They can provide frictionless and instant payment and settlement solutions. Unlike traditional services and systems, a blockchain system doesn’t rely on a slow process of approving transactions, which usually goes through several mediators and requires a lot of manual work.

They have the potential to disrupt not only the world’s currency market, but also the banking industry as a whole by cutting out the unnecessary intermediaries and replacing them with a trustless, borderless, and transparent system that is easy to access by anyone. The use of crypto assets as a bridge for cross-currency transactions can eliminate the need of banks and payment providers to hold nostro – vostro accounts and pre-fund liquidity with foreign currencies. This means that the trillions of dollars trapped in multiple currencies could be used more productively to benefit the global economy. With a crypto asset as a bridge, banks only have to hold their domestic currency which minimizes the number of intermediaries involved and their markup on spreads which can save money, time and enable instant settlement with real transfer of value.

2. Asset tokenization

Buying and selling securities and other assets, such as stocks, bonds, commodities and derivatives requires a complex, coordinated effort between banks, brokers, clearing houses, and exchanges. This process not only has to be efficient, but it also needs to be accurate and added complexity directly corresponds with increased time and cost.

Blockchain technology simplifies this process by providing a technological base layer that enables the easy tokenization of all different types of assets. Since most financial assets are bought and sold digitally through online brokers, tokenizing them on the blockchain is a convenient solution for all involved.

Some innovative blockchain companies are investigating tokenizing real-world assets, such as real estate, commodities and art. This would make transferring ownership of assets that hold real-world value a cheap, fast and convenient process. It would also open up new avenues for investors with limited capital by enabling them to buy fractional ownership of expensive assets or investment products that might have been unavailable to them previously.

3. Lending

Banks and other lending firms have monopolized the lending sector, allowing them to offer loans at relatively high interest rates, and restrict access to capital based on credit scores and other parameters. This makes the process of borrowing money difficult and expensive. While banks have the advantage, the economy depends on banks providing the necessary funds for higher-cost items, such as houses and cars.

Blockchain technology allows anyone in the world to participate in a new type of lending ecosystem, which is part of Decentralized Finance (DeFi). To create a more accessible financial system, DeFi aims to put all financial applications on top of blockchain systems. Peer-to-peer money lending allows anyone to borrow and lend money in a simple, secure, and inexpensive way with no arbitrary restrictions. With a more competitive lending landscape, banks and firms will also be forced to offer better terms to their customers.

4. Trade finance

Engaging in international trade is very inconvenient due to a large number of international rules and regulations imposed on importers and exporters. Keeping track of goods and moving them through each stage still requires manual processes, which are filled with hand-written documentation and ledgers.

Blockchain allows trade finance participants to provide a higher level of transparency through a shared ledger that accurately tracks goods moving around the world. By simplifying and streamlining the complex world of trade finance, blockchain can save importers, exporters, and other businesses a significant amount of time and money.

5. Safer agreements with smart contracts

Contracts exist to protect individuals and businesses when they enter into agreements, but that protection comes at a high cost. Due to the complicated nature of contracts, the process of creating one requires a lot of manual work from legal experts and it takes both time and money.

Smart contracts can enable the automation of agreements through tamper-proof, deterministic code that is running on the blockchain. Money or assets can safely stay in escrow and are only released when certain conditions of the agreement are fulfilled. Smart contracts reduce the element of trust needed to reach an agreement, minimizing the risks of financial agreements and the odds of ending up in court.

6. Data integrity and security

Sharing data with trusted intermediaries and companies always carries a risk of the data being compromised. In addition to that, many financial institutions still use paper-based storage methods, which increases risk of loss and recordkeeping costs significantly.

Blockchain enables streamlined processes that automate data verification and reporting, digitize KYC/AML data and transaction history, and allow the real-time authentication of financial documents. This reduces operational risks, risk of fraud, and decreases the cost of handling data for financial institutions.

Conclusions

The potential benefits of the blockchain are more than just economic. They extend into political, humanitarian, social, and scientific domains. The technological capacity of the blockchain is already being harnessed by specific groups to address real-world problems.

Blockchain penetration could facilitate increased financial inclusion in emerging markets, as financial services on the blockchain gain critical mass. It could also drive the disintermediation of financial institutions, as new services and value exchanges are created directly on the blockchain.

There is already an entire industry built around blockchain and crypto assets and it is held by institutions dedicated to supervising all the digital crypto asset exchanges taking place throughout the world. The crypto asset industry is growing quickly and the economy is slowly shifting to adapt to these needs and crypto assets have a great potential in satisfying them. There are now many apps and programs that facilitate the use of crypto assets and bring them closer to the wider audience. An added benefit of crypto assets use is that it is open and decentralized, so trading can be done freely across borders at any time. The use of this technology will facilitate a financial revolution that will leave everyone more financially connected, empowered and enabled.

Sources:

1. https://gatehub.net/blog/what-is-the-internet-of-value/

2. https://ripple.com/insights/the-internet-of-value-what-it-means-and-how-it-benefits-everyone/

3. https://blockkeycapital.io/blog/blockchain-dlt/

4. https://openmarkets.cmegroup.com/10381/what-is-an-internet-of-value

5. https://www.oecd.org/finance/2019-OECD-Global-Blockchain-Policy-Forum-SummaryReport.pdf

6. https://consensys.net/blockchain-use-cases/

A smart contract is a self-executing contract with the terms of the agreement between the counterparties being directly written into lines of code. Smart contracts hold many promises, allowing for the automatic and decentralized distribution of value and other digital assets in a secure, predetermined way.

The most popular smart contract platform at the moment is Ethereum. Ethereum smart contracts allow for design, development and scaling of thousands of versatile applications. Its Virtual Machine (EVM) Turing complete software enables simultaneous execution of operations by every node in the Ethereum network. Whenever smart contract transactions occur within the Ethereum blockchain, it takes computational power to validate them across the network. That's because Ethereum currently uses Proof of Work. Transactions require a fee in the form of “gas” which is paid with ETH. But there are some problems that have occured. Developing on the Ethereum network is not cheap anymore, and many DeFi projects are moving to other chains. Ethereum has had many scalability issues and problems with the fees. To make any change on Ethereum you have to wait for the transaction to be confirmed, and this might take a long time and cost a lot if the network fees are high. In simple words, the Ethereum network is currently inefficient, slow and expensive.

What is Flare?

And here comes a new project that wants to make smart contracts efficient, affordable and easily accessible to everybody. Flare Networks Limited is the company behind Flare Network, a new blockchain network that will have the EVM integrated and will be based on the Flare Consensus Protocol – the first Turing Complete Federated Byzantine Agreement protocol. Flare uses a modified version of the Avalanche protocol that uses Federated Byzantine Agreement (FBA), instead of Proof of Stake, as PoS systems are more vulnerable to Sybil attacks. Ethereum is transitioning to ETH 2.0, which will be a Proof of Stake network, and actually will create other problems, especially for DeFi projects. The only method to protect a network that uses Proof of Stake is to have the money locked that is greater than the value of what projects are tokenizing, and people won’t want to stake their ETH if they can get better returns from other networks and solutions, leading to a decline in the security of the network. Flare solves this problem by building a new way of scaling smart contract platforms that does not link the safety of the network with the value of its native token. Flare’s token is called Spark and is mainly required for spam control at the network, similar to XRP on the XRP Ledger.

Because the safety of the network is not contingent on the token itself (like in Proof of Stake networks), Spark can be used in ways which would be unsafe for other networks. First, Spark can be used as collateral within applications. Second, Spark as a contributor, but not the sole contributor, to an oracle providing on-chain time series data estimates, called the Flare Time Series Oracle (FTSO). Third, Spark as a governance methodology across all elements that rely on it.

Flare's goal is to make it possible for people to write smart contracts and deploy them across a number of different blockchains in a trustless manner, providing complete compatibility. Flare are positioning themselves to give users a high quality and low cost DeFi experience.

Flare exists to solve two key issues:

First, and of immediate importance to the building out of the industry is that 65% of the value that exists in public blockchains cannot currently be used in a trustless manner with smart contracts. In simple words, it means that many crypto, like XRP, Bitcoin, Litecoin and more that do not have smart contracts, can't be used trustlessly in other smart contract platforms and unlock their true value and use them on DeFi apps and add smart contract capabilites that can provide extra (passive) income opportunities and use cases.

Second, there are potential issues with how scaling is being implemented for smart contract networks today. The majority of new networks use Proof of Stake or its variants. These protocols derive network safety from their native token, while Flare Network solves that problem.

Flare allows for the creation of trustless IOUs (called “F-assets”) such as FXRP to interact with the ecosystem through a network of ‘agents’. Spark (FLR) is used as a collateral to secure the trustless issuance and redemption of F-Assets.

In simple words, through Spark (FLR) and F-Assets, the Flare Network will provide many passive income opportunities.

Spark (FLR) airdrop to XRP holders

100 Billion Spark (FLR) tokens will be created to mirror the quantity of XRP that exists. There are approximately 45 billion XRP tokens that do not belong to Ripple labs. The objective of the distribution is that XRP holders other than Ripple can claim approximately a 1:1 amount of Spark to their XRP holding. 45 billion Spark will be claimable by XRP holders and will be airdropped gradually once the Flare Network launches, as discussed here: https://flare.xyz/further-information-on-the-spark-token-distribution/

A snapshot was taken on the XRP Ledger addresses on December 12th 2020. XRP holders who had the XRP on supporting exchanges all they have to do is follow the announcements of their exchange and most will not need to do anything other than wait until the airdrop happens. If you used a non custodial (self-custody) wallet, you will receive your Spark directly to your wallet. The system will deliver them to the Flare address (Ethereum address format) with which you included for the claim. Flare uses the Ethereum Virtual Machine hence its addresses use the same format and same key derivation as Ethereum addresses.

Flare Finance airdrop to Spark holders

Flare Finance is the first (independent) project to be built on the Flare Network. It is a DeFi (decentralized finance) platform on the Flare Network bringing utility to Spark and other supported assets. Flare Finance will be launching 6 DeFi products that will serve as an all in one trust-free solution to traditional banking and investing.

Flare Finance will do an airdrop to Spark (FLR) holders. Distribution of the initial 40,000,000 YieldFlare will take place via an Initial DAO Offering. All holders of FLR (excluding the official Flare Foundation Addresses) will be airdropped a proportioned amount of the 40,000,000 DFLR (DAO Flare), which will then allow them to swap this for YFLR on the platform.

In simple words, XRP holders will get free Spark and Spark holders will get free DFLR/YFLR tokens.

Spark (FLR) = The native token of Flare Network, that will be airdropped to XRP holders.

FXRP = Trustless XRP IOU on the Flare Network.

YFLR = The native token of Flare Finance.

Overall, both Flare Network and Flare Finance are very exciting projects, which will make the DeFi experience better and bring further utility to many projects. With the rise of DeFi and smart contracts, crypto holders can now put their tokens to work to unlock more value, instead of just holding and waiting for price appreciation. The Flare Network highly incentivizes its users to participate in the network. It does so by giving them the ability to earn rewards in many different ways. There will be risk-free and low effort ways that users will be able to participate in the network and earn compounding yield.

Update June 2021: If you want to understand Flare Network and its ecosystem and see exclusive content, video tutorials and more, join my patreon: https://www.patreon.com/panosmek

Sources:

1. https://flare.xyz/the-flare-network/

2. https://flare.xyz/app/uploads/2019/11/FCP.pdf

3. https://flare.xyz/further-information-on-the-spark-token-distribution/

4. https://seemslegit.medium.com/flare-network-sparking-life-into-xrp-with-smart-contract-capabilities-99dfa4426dfc

5. https://flr.finance/

6. https://everipedia.org/wiki/lang_en/flare-finance

The stock market is booming again, interest rates remain close to zero, the global debt is ballooning and Central Banks keep printing money non-stop. But where does this money go and what is happening in the real economy?

The global debt is now close to $260 trillion and the debt to GDP ratio surpassed 330%. In the Q2 2020, the debt increased by $12.5 trillion, with the 60% of that coming from governments.

Economists (and not only) globally seem to be confused with what is going on in the US stock market, and they are wondering when it is going to stop and what the side effects will be. The unemployment rates have been increasing the last few months, the global economy is in a very bad situation and it doesn't seem that it will recover any time soon. The profitability and revenue of companies have decreased by much and some are already going bankrupt. Moreover, Central Banks all over the world have printed more than $10 trillion, with the majority of that money going to banks and financial markets. The Fed itself is buying ETFs, corporate (and junk) bonds and even the direct purchase of stocks is being discussed.

All these, in combination with the dangerous addiction in cheap money, have created (again) a huge and dangerous bubble in most of the markets and in midst of a recession and crisis. For the first time in the history, the total market capitalization of the US stock market has surpassed the GDP by more than 150%. Specifically, the market cap to GDP ratio is now more than 170%. Is the market now completely disconnected from the economy? Stocks are rising, precious metals are rising, cryptocurrencies are rising. What is going on?

At the same time the wealth inequality is increasing and worsening. The Central Bank policies have created even more issues, as well as the equities share of the bottom 90% have been decreasing.

Helicopter Money and debt relief are essential for the recovery of the global economy.

Debt relief, and maybe cancellation, between countries that are in difficult situation is needed, otherwise the global economy will not recover any time soon. Helicopter and stimulus money are also needed. With layoffs rising, businesses closing and with the demand and supply being down, the only solution is giving money directly to the citizens in order to cover the income loss and to see the global economy recovering. Some people say that helicopter money may cause inflation problems, but this will not happen if done correctly and the money go to recover the losses. It will help millions of people that lost their jobs all these months and have many problems. Unfortunately, until now the opposite is happening as most money go to pump the markets and cover the bank losses.

How can people protect themselves by an upcoming economic crisis or a bubble that is ready to burst?

The most important thing during an economic crisis or recession is liquidity. Either you are an investor or not, another market crash in the near future will affect the whole economy and have destructive results. Cash on hand and an emergency fund (of at least 6 months) are the most important things you should have. After that, there are some extra things someone could do for hedging, like investing in precious metals, real estate and recently many people are also investing in cryptocurrencies. The sure thing is that we are in a very dangerous bubble that can burst anytime if Central Banks stop pumping money into the financial markets. Central Banks have proven for one more time that they do not care for good policies and sustainable solutions. It is the time for many and radical changes.

As we all know, the last few months the interest for cryptocurrencies and blockchain technology has skyrocketed. Many financial institutions and companies are investing in this technology. Blockchain technology is probably the biggest and most revolutionary technological development since the Internet itself. Individuals are also getting into cryptocurrencies for many reasons. To make money, for the amzing technology and as an alternative to fiat money and the outdated banking system.

And here comes XRP. The most misunderstood crypto asset that many people do not understand or do not want to understand. “Centralized” and “Bankers coin” are two of the most used phrases by the XRP critics and haters. But is this true? Absolutely not. In fact, if critics and haters such as bitcoin maximalists, sat down and did a good and extensive research, they would realise that nothing of these are true. XRP not only isn't a “bankers coin”, it's actually trying to go against the corrupted and broken financial and banking system.

Ripple is leveraging XRP and its technology to solve a multi-trillion dollar problem, because they are fed up with the broken and inefficient correspondent banking system, which is ruled by the big banks (aka SWIFT). Ripple's vision and XRP's main use case is to upgrade the financial and banking system, make it more efficient and more transparent and make money move efficiently for the whole globe. So, they are actually going against the big banks and the system that bitcoin maximalists hate so much. But Ripple is doing that from within the system and working with regulators and educating them, because that's the only way. If bitcoin maximalists realised these things, became open-minded and saw things how they really are, they would actually jump from Bitcoin to XRP in the next minute. Bitcoin and its believers tried to do that by going against the system and promoting an anarchist ideology, trying to block and exclude everything else around it, but that of course didn't and can't work. This can't be achieved with this way and crypto can't just stay out of the system. Connecting crypto and blockchain with the system is inevitable and it is already happening, we must just try to improve the system and make it work for the majority. Blockchain and crypto can do that.

Ripple might be the main player in the XRP ecosystem, but it is one company focusing on one thing (cross-border payments). XRP is a universal digital asset that is used and will be used for multiple use cases and in multiple markets. The XRP Ledger is being leveraged by an increasing number of independent companies and developers. The XRP Ledger is an open-source and decentralized technology that can do everything that Bitcoin believers wanted Bitcoin to do, but in a much better and efficient way, and with much more features. With the XRP Ledger you can be your own bank today, and use all the amazing features of this technology like escrow and checks or using its built-in Decentralized Exchange. And this is just the beginning.

In order to succeed and survive over the long-term in this market you need 7 things:

1. A great and dedicated team

2. A great technology that is constantly improving

3. Vision and strategy

4. Great community and support

5. Adoption

6. Solving real problems and having real utility that improves the lives of people

7. Connections: Having big players, important people by your side and good relationships with regulators and politicians.

Who has all these? You guessed it right, only Ripple and XRP! In my opinion, you need ALL these 7 in order to succeed and survive in the long-term. 1,2 or 5 of them are not enough, all 7 are needed. THIS is why I'm invested in XRP and I believe that it's the investment opportunity of the decade and maybe our lifetime. Not only because of money, but most importantly because of its revolutionary technology. If another asset comes out with all these 7 then I would be happy to invest in that too, but there is no other to date. I like bitcoin for starting this revolution, but unfortunately it has no place in the future. Its technology is already outdated and very limited. Proof of Work is simply not sustainable and XRP Ledger's Consensus Protocol is the new standard, a much better and efficient blockchain system.

The end goal for most of people is to make money from XRP, that's for sure. Some expect to be rich or financially independent, some to just make a good profit but we must not forget that XRP is bigger than all that, it is bigger than speculation and money. It's about the Internet of Value, a new era, a ®evolution. We have invested early in a new revolutionary technology that changes and upgrades the whole financial system and the whole concept of moving money and value. We will not benefit only from our investment, but the technology as a whole in many ways that it will change our lives. And this, in my opinion, is the most important thing. This technology and market exist only about 10 years and Ripple and XRP about 7. Look back at your life in 2010, 10 years are nothing and Ripple and XRP didn't even exist back then and look where we are now. Technology moves so fast. This is not about you and me getting rich, this is about changing the world, changing the status quo, changing how money moves, going against the broken correspondent banking system and more. If this technology succeeds, so will XRP investors.

The future is digital and there is a new digital economy being built at the moment with the new technologies like blockchain and crypto. This decade will be crucial to finally see a better, more efficient and transparent system. And I believe that XRP and Ripple will be in the front line.

If you want to learn more about XRP and Ripple, follow these links:

1. https://xrpl.org/

2. https://ripple.com/faq/

3. https://xrpcommunity.blog/introduction-to-xrp-2019-edition/

Smart contracts hold many promises, allowing for the automatic and decentralized distribution of value and other digital assets in a secure, predetermined way. The biggest obstacle to the further growth of smart contracts is the need to receive data about the real world. They cannot access information that lives outside of the blockchain they reside on. For example, if you want to make a smart contract that is based on the current exchange rate of ETH/BTC, you need a way to get that information (likely sourced from a trusted crypto exchange’s API) onto the blockchain so that it becomes accessible by the smart contract.

This is where oracles come in. Oracles are third-party services that provide smart contracts with external information. They are basically data sources that are used as a bridge between smart contracts and other external sources. Both smart contracts and decentralized applications (DApps) need oracles to access real world data.

There are many solutions and oracle platforms built, with the most popular at the moment being Chainlink, but nobody is offering a complete solution to the oracle problem. Except Zap.org. Zap is the first decentralized and permissionless platform that allows anyone to create oracles to securely and reliably deliver data from any external source onto the blockchain. It was the first oracle platform to be launched on mainnet (January 2019). But Zap is not just that. It is also a marketplace that makes it easy to buy, sell, create or find the data you need and plug it into a smart contract, and a toolkit that enables developers to create DApps and smart contracts that incorporate real world data.

Zap allows data providers (i.e. the creators of oracles) to list their data feeds/oracles on the Zap Store for free, a “one stop shop” marketplace for finding the data feeds you need, ready to be accessed by a smart contract. Can’t find what you’re looking for? You can create your own oracle with just an API and the Zap.tech oracle creation toolkit. Alternatively, you can also fund a community bounty for the creation of a new oracle. Perhaps the most exciting feature of the Zap platform is the ability to create customizable bonding curves, algorithmic price functions that change the cost of subscribing to an oracle based on the number of users subscribed. Zap invented the term “bonding curves”. In simple words, a bonding curve is a smart contract that issues tokens as one stakes or “bonds” value and the value bonded stays in the contract ready for two scenarios:

1. To spend the secondary token, which releases the value to the service provider.

2. To sell the secondary token back to the contract at the price point reflected by a curve at any time.

In other words, a data feed or oracle may start out being relatively cheap in order to draw in the early adopters, but become more expensive (thus profitable) as it becomes more widely used.

Why is the bonding curve mechanism important?

It creates a decentralized exchange (DEX) since it uses an algorithmic marketmaker (the pre-set price curve) to eliminate order books and provide a fully liquidity environment for instantly trading tokenized assets. When you bond/unbond, you are trading with a smart contract rather directly with buyers and sellers. This is the solution that will lead to further decentralization.

Bonding curves are also the decentralized solution for instantly creating a market for a tokenized service or asset without having to rely on centralized exchanges. With Zap anyone in the world can access the platform and either provide, buy, or speculate on various tokenized services. Additionally, Zap Protocol has ERC20 token issuance capabilities, similar to Ethereum.

Oracles and tokens are just two of the powerful tools available when building with Zap Protocol. Leveraging its complete set of advanced tooling, Zap is able to realize all sorts of complex blockchain products, instantly.

ZAP token

All of these exciting features are facilitated by the ZAP token, which is used for monetizing feeds as well as access to the platform’s data. In order to launch or interact with a specific oracle on the decentralized Zap marketplace, you must first bond ZAP tokens to that oracle, locking that ZAP and producing a number of “dots”. A dot is an access token payable to the oracle for a single query. Dots cannot be exchanged between addresses, and are not divisible. Anyone who wants to access an oracle’s data must first bond ZAP tokens to that oracle, producing a private supply of dots.

ZAP is an ERC-20 token whose supply was minted once and therefore fixed. The maximum supply of ZAP is 520 million. In the ICO, 33% was made available to the public, while the rest were set apart for long-term budgets, bounty programs and finally founders and advisors.

Partnerships

Zap Protocol and DIVI Project Partnered to Create Zap Wrapped Divi in the Zap platform. Divi announced the partnership between the two teams as they work to expand the capabilities of both their technologies.

Zap Entered Blockchain Gaming with Siege Worlds.

Siege Worlds is a cryptocurrency-powered multiplayer online game and it will feature ZAP token as one of the in-game tokens which you can spend or earn with.

Zap has also partnered with Coingecko, a market leader in providing fundamental analysis for the crypto market. The new collaboration will see Zap’s innovative bonding curve technology be used to curate CoinGecko’s high-quality data feeds, and market participants can explore the possibilities of its unique properties. CoinGecko thus becomes one of the first companies in the world to fully embrace innovative bonding curve technology, offered right out of the box by Zap Protocol. In the coming months, both dev teams expect to work closely to develop further benefits and ensure a smooth and proper implementation.

In January 2020, Zap signed a strategic partnership agreement with Howdoo, a decentralized social media and content delivery platform for today’s generation.

Zap also signed a major distribution contract with Techno Brain, Africa’s leading technology company, for sales and channel partnerships of its data management and analytics software across Middle East and Africa.

In mid 2018, Zap partnered with Stox, an open source Ethereum-based prediction market platform, to provide real-world data about events listed on Stox’s prediction market.

Finally, in late 2018 Zap announced a partnership with the billionaire businessman and entrepreneur Sean “Diddy” Combs.

Main use cases and real world applications

The use cases for the solution Zap offers are endless. The Zap team sees the platform being put to real-world application by many industries like the finance industry, real estate, and shipping.

Insurance: The ZAP store’s data marketplace will provide insurance companies with an opportunity to provide self actuating insurance, that automatically pays customers eligible for a payout

Real estate: Companies may be able to gather important data such as real-time heat maps of specific areas, smart contracts are also able to automatically execute transfer of ownership, as well as rights, rules and regulations for rentals.

Shipping: Companies can benefit greatly from the implementation of smart contracts to track shipments, inventory and economic activity. The shipping industry is known for the sheer magnitude of data it produces, some of which is already been utilized by much of it goes to un analyzed. The shipping industry could monetize this data as an oracle to other to help better determine market trends.

DApps: Currently the only DApps that are available are those that operate only based on information on the blockchain. These DApps, while valuable in their own right, have not even begun to scratch the surface of what Ethereum, smart contracts, and DApps are capable of. In order to make DSpps and smart contracts capable of the feats that are outlined in the Ethereum whitepaper, there needs to be a method of making off-chain information usable by smart contracts. The Zap oracle marketplace is the solution.

Zap is like Ethereum, Chainlink and Uniswap combined, allowing for the tokenization of anything, including the oracles themselves, while offering decentralized, liquid markets.

The team

The team is made up of more than 30 members and the founder is Nick Spanos who is also the founder of the the Bitcoin Center. Advisors include Dwayne Campbell of Goldman Sachs, Danny Zaterman of MIT and Alex Dziejma of Microsoft.

The Future

The future of Zap seems very strong. The team is working hard to build the most user-friendly platform possible, design a new website and an interface to make Zap platform more accessible and flexible, list the Zap token in more exchnages and finally form more partnerships.

The founder of Zap few months ago said:

With a new vision, we are working towards the imminent and inevitable future. Many of the goals we are going forward with our continued development, making the platform even more accessible, teaching developers how to quickly manifest their ideals and ideas using the Zap protocol, forcing even more use-cases into reality as the “killer app” makes its way to the surface. Ultimately, I think seeing this technology in action is the best way for people to understand it. We have some things lined up, like the real estate, which will put on display the power and place this protocol has in the future. At the same time, we are working to sharpen our documentation so as we continue to grab the attention of programmers, so they can seamlessly begin developing using our protocol.

Although there are competing projects like ChainLink, the Zap team has built a more efficient and superior platform with many more advantages and features. Oracles are a crucial part of the decentralized future and Zap with their revolutionary technology will certainly be in the front line.

Sources:

1. https://medium.com/@ZapUnofficial/zap-protocol-the-basics-30dc232dc8c9

2. https://www.pickacrypto.com/coins/zap-project-review/

3. https://hackernoon.com/zap-store-access-oracles-that-bring-real-world-data-to-smart-contracts-e8db533cd8ae

4. https://medium.com/@ZapUnofficial/solving-the-oracle-problem-bonding-zap-for-data-and-profit-f02680dda117

5. https://medium.com/@ZapUnofficial/zap-bonding-curves-explained-63e3a92cd009

6. https://medium.com/@ZapUnofficial/trading-oracles-initial-oracle-offerings-with-zap-protocol-2b4349e61afa

7. https://medium.com/@ZapUnofficial/the-great-oracle-comparison-b8a8d0cf499c

8. https://defiprime.com/zap

9. https://zapproject.gitbook.io/zapproject/

Over the last decade, the monetary policies of Central Banks haven't helped much the global economy and all have failed to meet their targets. Since the global financial crisis of 2008, Central Banks like the ECB have neither succeed to meet their inflation targets nor to restore the economic activity. Central Banks have also failed to innovate and adopt new technologies and systems that may solve many issues. However, the last few months this has changed as they have started to examine the new technologies like DLT or blockchain.

Digital currencies and blockchain technology are one of the most important technological developments of the century and it is a matter of time until the average man uses this technology. The first digital currency or cryptocurrency was created back in 2009 and it was called Bitcoin. Since then, many cryptocurrencies and blockchain platforms have been created and now CBDCs are being discussed a lot.

What is a CBDC?

A Central Bank Digital Currency (CBDC) is a digital form of central bank money, which is legal tender created and backed by a central bank that represents a claim against the central bank and not against a commercial/private bank. It is actually an advanced form of fiat currencies that can offer a range of advantages. Its purpose is to increase the effectiveness as a medium of exchange, the security as a store of value and the stability of the currency.

There are two types of CBDCs:

1. Wholesale CBDCs: They are used to facilitate payments only between
   banks and other financial institutions that have
   accounts at the central bank.

2. Retail CBDCs: They used by the public for retail
   payments or for direct loans from the Central Bank to individuals and businesses.

CBDCs can give the central banks more effective, future-oriented tools to allow them to implement better and more effective monetary policies that will also be direct and innovative. With retail CBDCs the public will have accounts directly with Central Banks and this will increase the effectiviness of monetary policies and decisions, because commercial banks would not act as the middlemen that take the money that they may never arrive to the public.

CBDCs could also simplify and reduce the cost of payments and remittances, while forming the basis for more efficient, more secure interbank payments networks. However, in order to improve cross-border payments and remittances more is needed to be done. Imagine the Fed accepting China's CBDC or the opposite. This is never going to happen. Not to mention countries with inflation problems. A CBDC is still a liability and actually an IOU. That's why a neutral and open bridge currency is needed to really make cross-border money transfers effective and efficient. XRP is known to be perfectly suited for cross-border payments because it enables the exchange of 2 currencies, acting as a neutral bridge, without any risk and having to trust it. And all these in seconds and without the need of banks to hold foreign currencies and nostro/vostro accounts.

The World Economic Forum has also stated that CBDCs could help reduce the barriers that today leave almost 2 billion people unbanked and without basic bank services.

Another big advantage that CBDCs could offer is that they could eliminate the insolvency and liquidity risks that commercial/private banks have. A major vulnerability today is that depositors could lose their deposits due to risks taken by commercial banks on their funds. Not all countries offer deposit insurance and therefore are not protecting their citizens. Citizens have no choice but to use a commercial bank for their financial needs. If the commercial bank goes into liquidation, the depositors do not get their funds back. A retail CBDC would be a great idea for the public and it would look like this:

According to a recent study conducted by the Bank for International Settlements, more than 70% of Central Banks are actively researching and developing proofs of concept for CBDCs.

Ultimately, Central Bank Digital Currencies may offer some advantages and can improve some things, but they are not the solution for everything. They can sure offer new and innovative tools for better monetary policies and this may open the case for a better, more stable and advanced (digital) economy.

The last few years the interest for cryptocurrencies and blockchain technology has skyrocketed. Many financial institutions and companies have invested in this technology and the industry is already a multi-billion dollar market. Blockchain technology is arguably the biggest and most revolutionary technological development since the Internet itself. The creation of this technology, which is the base for cryptocurrencies, was based on the creation of the first cryptocurrency, Bitcoin. Bitcoin's creation was mainly based on lack of trust and credibility in the financial system and governments after the financial crisis of 2008. So, the interest for blockchain and this new form of money, doesn't come only from institutions, but mainly from individuals and simple people who are trying to find an alternative to the current “broken” and obsolete financial and banking system.

What is a cryptocurrency?

A cryptocurrency or crypto/digital asset is actually a digital form of money that exists only digitally. The main difference between crypto and the digital money that we already use on daily basis (credit/debit cards, e-banking etc.) is that a cryptocurrency is not issued by any government or bank, is mainly decentralized and is based on blockchain technology.

The benefits that cryptocurrencies offer over fiat money are several:

What is blockchain technology?

In simple terms, blockchain technology is an online database which is cryptographically secured, decentralized, transparent and permissionless. As its name states, it is a chain of blocks, where each block is connected to all the blocks before and after it. The key difference between blockchain technology and traditional databases, is public verifiability, which is enabled by integrity and transparency, which makes it almost impossible to hack.

Are cryptocurrencies used mainly for illegal purposes and money laundering?

Many people, who haven't done an extensive research, say that cryptocurrencies have no actual use or value, and they are used only for illegal transactions and money laundering. But is this true? Not only it isn't true, but in fact only 1% of $1 trillion transacted in crypto in 2019 was illicit. Bitcoin and crypto started being presented like that from the media in 2012 and 2013 where bitcoin was mainly used in dark web and this opinion is wrongfully supported till today, but things have changed. Actually, more than $2 trillion every single year are used for illegal activities and money laundering through the traditional banking system and cash.

Is the crypto market another bubble?

Was the Internet and its technology a bubble, like many people thought until the early 2000s? No, but was a bubble created (dot-com) because of insane speculation in a new market? Absolutely yes. A bubble, which when it burst it took down all the companies, including the good ones like Amazon whose stock crashed by more than 90%. What happened next? The companies that were really worth it, had an actual use case and kept working hard to grow, finally survived and came back stronger. The exact same thing is happening now with the crypto and the blockchain industry. The crypto bubble burst in the early 2018 and crashed the whole market. In the long term, the cryptocurrencies that have a real use case, are solving problems and are actually used, will survive and thrive. The ones that have these, will come back stronger in the long-term. Many people confuse the actually technology with investing and speculation, which is wrong. The technology has already proven itself and it is already maturing, with many institutional investors adopting the technology and entering the market.

It is true that most cryptocurrencies are useless and have no purpose or actual use case. There are more than 10,000 in existence at the moment, with more being created every day, but as many known people in the space have said, 99% of the cryptocurrencies will not exist in few years, only a handful of them that are solving a real problem and are improving the lives of people will survive. And this is true for every new market and industry.

Cryptocurrencies have many different use cases. You have most probably heard of Bitcoin, which is the most popular crypto, and some people consider useful for hedging against inflation and used as digital gold. Then there is Ethereum, which is mainly a platform for smart contracts and creating dapps and projects on top of it, and then there is XRP, which is mainly used for fast and cheap transactions and payments all over the world between both financial institutions and individuals. These are the 3 most known cryptocurrencies, but there are many more.

Why is there big volatility?

The main reason that there are big fluctuations in the crypto market is mainly because the market is still new and unregulated, which makes it relatively easy to manipulate. The lack of regulatory clarity and crypto-blockchain policies, especially in the United States and European Union, has been a big problem and has been a barrier to the growth of the industry. The lack of regulations has also given scammers the chance to scam people without consequences. The good news is that more and more countries are coming out with regulations and crypto-friendly policies, which is positive for the whole industry and will drive innovation and adoption.

Be your own Bank

Cryptocurrencies and blockchain technology give everyone, for the first time in the history, the opportunity to be their own banks and have full control of their money and wealth. This technology enables peer-to-peer transactions and instant transfer of value, with low costs and no intermediaries 24/7/365, and also countless DeFi apps or platforms to use for borrowing/lending, trading, earning passive income and more. Both inflation and deflation in fiat currencies and economies have negative consequences for both countries and their people. Apart from the use cases like payments, smart contracts and Decentralized Finance, cryptocurrencies can be used as a medium of exchange, an investment asset and a store of value.

There is no doubt that the future of money is digital. Even Central Banks have plans to create their own digital currencies (CBDCs). Even though there is no big difference from digital fiat money, it is important that new systems based on blockchain are being built that may improve the system and make people see the benefits that cryptocurrency and the technology offer. Cryptocurrencies and CBDCs will be mostly complementary.

It is also important to note that there are more than 2 billion unbanked people in the world that don't have access to the banking system and can't have a normal account because of the limits and costs. That's why there is bigger activity in crypto transactions in countries with many unbanked people. Most people have a smartphone and cryptocurrencies offer a way for everyone to participate and transact even a fraction of a cent, easily and without negligible costs. Creating an account or crypto wallet is quite easy and there are many initiatives that promote blockchain technology and its uses to countries that many unbanked people exist. The crypto market is maturing and growing, crypto businesses are increasing and there are also many crypto ATMs as well as crypto debit cards which enable users to spend directly their cryptocurrencies.

The future is digital and there is a new digital economy being built at the moment with the new technologies. This decade will be crucial to finally see a better, more efficient and transparent system.

In short, the answer is no. Why?

First, let's start from how the banking system and payments work and how money moves right now with the current payments model. We already know that with the current model and system money never really moves. Just data is exchanged and pre-funded accounts in bank ledgers get adjusted (credited and debited). SWIFT is the biggest messaging provider for banks. It is actually only a messaging system provider. They have a network of banks which they use SWIFT's messaging system, which “competes” with Ripple's xCurrent, which is also a messaging system, but far more advanced. And this is the main system that banks use to “move” money through pre-funded liquidity all around the world. It's just an exchange of messages. Ripple's xCurrent is already ahead of the competitors providing a more robust technology and exchange of information and many more features and benefits. With xCurrent and nostro/vostro (pre-funded) accounts, transactions can already settle in seconds. For more details on how this works, you can read this: https://write.as/panosmek/xrp-disrupting-swift-gpi-and-correspondent-banking

Look at the picture below. This is how it is right now, with the current payments systems. There is interoperability between data and goods, but not in money and value, which can not actually be transfered.

Ripple differentiate themselves by providing an innovating system (ODL) which offers instant settlement and real exchange of value without requiring pre-funded and locked liquidity. Nobody else in the world offers this solution, a solution that can unlock the trillions of dollars of pre-funded liquidity around the world and offer liquidity on-demand. And apart from these, Ripple offers an advanced payment system and network (RippleNet) which has all these innovative tools and built on the best technologies like Interledger Protocol (ILP) and the XRP Ledger (XRPL).

What do all these mean? There is no head-to-head competition for Ripple at the moment and probably there will never be. There is only partial competition like SWIFT gpi competes with xCurrent in messaging, but never as a whole. There are many systems, networks, solutions, fintechs and companies, but nobody offers a solution like ODL, which is what the financial system needs to be improved and upgraded. Ripple has the full package and that's why they are revolutionizing the financial system and payments. If they didn't have XRP or abandoned it, then what? The Internet of Value would and can never exist and Ripple would not be something special, compared with what the rest are doing.

Ripple has one vision and mission: to enable the Internet of Value, and this can't work without XRP, because the only way to enable value transfer is through a digital asset like XRP. XRP is the center of the Inernet of Value and the heart of Ripple's strategy. This is what will transform the global financial system along with technologies like Interledger Protocol. A new and better way of transferring value.

What about XRP as an investment?

We are still in a new, small, unregulated, immature and manipulated market. It took the Internet many years just to be approved, implemented in the 90s and it took decades for 50% of the world to use it. Do you think that this is a simple game? Do you think that this is something simple to be done? This is about changing the world's financial system, something that nobody have ever really tried or achieved since the 1970s, that the current system is operating on, until now. For the first time in the history of money, there is a solution that can actually move it and do it efficiently. This technology and market exist only about 10 years and Ripple and XRP about 7. Look back at your life in 2010, 10 years are nothing and still Ripple and XRP didn't even exist and look where we are now. Technology moves so fast. This is not about you and me getting rich, this is about changing the world, changing the status quo, changing how money moves, going against the broken and corrupted correspondent banking system and the top banks that own SWIFT. If this technology succeeds, so will XRP investors.

And remember the most important thing: Ripple might be the biggest party in the XRP ecosystem, but it is not the only one and it is one company focusing on one thing (cross-border payments). XRP is a universal digital asset with multiple use cases and with XRP Ledger being leveraged by many independent companies and developers. And this is only the beginning.

A new global financial system is being built at the moment with the new technologies and it will take years, so we can't but just sit down, relax and watch this unfold.

🆃🅷🅴 🅵🆄🆃🆄🆁🅴 🅸🆂 🅷🅴🆁🅴

Read more: Why XRP is the most misunderstood cryptocurrency

Crypto assets exist only for a decade, and yet we are seeing complex financial products being introduced in the market. After futures contracts, we are now seeing demand for options contracts as well. But the problem here is that the majority of crypto investors (and not only) don't understand these products and don't have the knowledge to trade them. After Binance launched XRP options contracts, many people asked me how they worked. This blog is dedicated to the people who want to understand how options work and how they can use them for hedging or leveraging. Options are a great tool to either reduce risk or leverage and profit, no matter if we are in a bull or bear run.

Let's start with what an options contract is. An options contract is a type of derivative, a derivative contract which is simply an agreement between two parties to facilitate a potential transaction on the underlying asset (stocks, bonds, crypto assets) at a specific price that is set from the start, referred to as the strike price, prior to the expiration date.

An options contract gives the buyer or the holder the right but not the obligation to either buy or sell the underlying asset at the strike price within a given period of time. There are two types of options, call options and put options. In few words, the right to buy is the call option, and the right to sell is the put option.

Call Options: If you are bullish on a crypto asset, for example, expecting prices to increase, then you should buy a call option. In this arrangement, you exercise your option by buying at the strike price if prices are higher. Generally, traders buy a call option if they are confident about the crypto asset's future, and they believe that the price will increase before the expiration date. In a call option transaction, a position is opened when a contract or contracts are purchased from the seller, also referred to as a writer. In the transaction, the seller is paid a premium to assume the obligation of selling shares at the strike price.

Some people will ask why not simply buy the asset directly instead of buying an option? While investors or traders could simply buy the asset, they would have direct exposure to the asset’s price risk up to its entire principal and this is especially risky with a volatile asset class like crypto assets. When buying a call, however, the risk is capped at the premium paid to purchase the option.

Example: You expect XRP price to increase during the next month, so you buy an XRP call option with a strike price of $0.20. Usually, a contract covers 100 pieces of the asset, but it can be adjusted with more or less. Let's take in this example that you buy one XRP call option which covers 100 XRP with a strike price of $0.20 and expires in one month. To buy that contract you have to pay a premium which is determined by several factors (moneyness, volatility, expiration date etc.) and this goes to the seller's pocket. Let's say that the premium is $1 per contract. If within a month the price of XRP increases to let's say $0.25 then you have two options:

1. You exercise the contract and you buy 100 XRP (or how much the contract says) for $0.20 (strike price), which equals to $20 and if we include the $1 premium that you spent to buy the contract, then you have paid $21 and you can now either hold or sell the XRP for $25 (because the current market price is $0.25). Like that you have a net profit of $4. So, in order to calculate the profit or loss you will have if you the contract, you will have to include both the cost to buy the asset at the strike price and the premium. If the market price is less than the strike price then you do not do anything and you simply lose the $1 (premium you paid) and let the contract expire.
2. You sell the contract in the market (usually if you are not interested in buying the asset) and profit from that. For example, you bought the contract for $1 so now the price (premium) will be higher and around $5, so more or less you will make the same profit.

Put Options: : If you are bearish on a crypto asset, for example, expecting prices to fall in the future, then you can bet on the future price decrease by buying a put option. In this arrangement, you exercise the put option if prices are lower than the strike price.

Example: You expect XRP price to decrease during the next month, so you buy an XRP put option with a strike price of $0.20. Same as previously, the contract has 100 XRP and it costs $1 to purchase it. If within a month the price of XRP decreases to let's say $0.15 then you can either sell the contract to the open market and profit or exercise it by either buying 100 XRP to the open market in the price of $0.15 and selling them to the seller of the option at the price of $0.20 (strike price) or, if you are already an XRP holder, sell your XRP that you already hold at $0.20 and then buy with that profit more XRP at the price of the market ($0.15).

All in all, an options contract offers its holder versatility and is often used to hedge or speculate on underlying asset prices.

A good strategy to hedge a long-term investment is a simple protective Put. A protective put seeks to limit downside while preserving the upside. In this case, investors buy a put option on a long-term investment to hedge against potential losses, with a limit on upside equal only to the put’s premium. If investors have been increasing exposure during this recent bear run with predictions of a rally, they may want to purchase a protective put, limiting their downside.

2 important notes here:

1. The contract can be settled directly in cash instead of having to buy the underlying the asset and sell it and do all this procedure.

2. Not all options are the same. There are American and European options. You can exercise American options at any point in their lifetime, from the moment you buy till the expiration date. On the other hand, European options can only be exercised in the expiration date and not before, but they can be traded at any time.

Some people may also ask what are the differences between a futures and and an options contract:

Finally, there are also 2 other ways to go long or short in an asset, but it is not recommended for beginners, and they have much more risk than simply buying a call or put option:

1. Investors who believe an asset price will increase in the future, can write/sell a put option. When selling a put option, traders agree to buy the underlying asset at the strike price if the buyers choose to exercise their right to sell. If the spot price of the asset is greater than the strike price, buyers will choose not to sell, and the option writer will profit from the premium.

2. Investors who believe that an asset price will decrease in the future, can write/sell a call option. When writing a call option, traders agree to sell the underlying asset at the strike price if buyers exercise their right to buy. Similar to above, this strategy aims to collect the premium on the option, while buyers choose not to exercise their option. This occurs when the spot price is lower than the strike price. If the spot price is higher than the strike price, the writer of the call will have to sell the asset at a discount.

Binance, the biggest and most popular crypto exchange, recently launched options trading and it is clarified that Binance is the sole-issuer of the options contracts. Thus, users can only be a buyer of Binance Options. As option holders, users of Binance Options are not exposed to unlimited downside, unlike traditional option sellers. In this case, the maximum loss would be the premium paid for the options. If you want to specifically trade Binance option then click here.

Options trading requires skills and an understanding of the variables that affect option prices. Investors should be very careful and keep an eye on the price of the option, the strike price, and the maturity. This way, you ensure that you buy the right options.

Sending money across borders is more important than ever before, either as an individual or as a business, especially in these difficult times. The pandemic gave a boost to the global digital economy and increased the need of moving funds across borders when traveling was not possible. And yet, there isn't any complete global payments network, there is no interoperability between networks, and you can't send money and value efficiently with the current outdated systems.

And actually, no money is ever moved with the current system, just account entries in correspondent banks' ledgers get adjusted (credited/debited). So basically, just data is exchanged and nothing else. We have SWIFT, which is owned by the biggest banks in the world and it offers a messaging service. In order to do a cross-border transaction and get settled, there are 2 options:

1. Your bank must have already established a direct relationship with the receiving bank, which means that it must have a pre-funded (nostro) account with the other bank or in simple words it should have “parked” enough money in that account in order for your transaction to happen.

2. Your bank can rely to other intermediary/correspondent banks (usually the major banks) that have already established a relationship with the receiving bank and your bank pays them (fees) for that. And that's what most of the banks do, because it takes too much time (usually 9+ months) and resources for a bank to create a new relationship with another bank. This is called correspondent banking. Isn't that costly and time consuming? You will ask. Of course it is. But that's how the entire financial system works in the most part for the last few decades. You can see how international payments work in the picture below:

SWIFT has created an improved messaging system called SWIFT gpi which, as they claim, it improves the speed, security and transparency of payments. They say that about 50% of SWIFT gpi payments are credited to end beneficiaries within 30 minutes. That's right, credited, which means that there is no actual exchange of value and transfer of money, only exchange of data and messaging. The average SWIFT payment often takes 3-5 days on average. But what SWIFT also hasn't told you is that those payments that are credited between minutes and hours, are mostly in the same time zone and in big corridors. SWIFT gpi only “works” in big economies and between the biggest currencies that already have efficient payment rails and locked (pre-funded) liquidity. If you want to send money to South America, Africa and some Asian countries, or generally exotic corridors, it may take up to 10 days for the transfer to be completed, and don't forget the huge fees you will pay and other problems that may occur. A very painful procedure. What does this mean? SWIFT gpi is simply a better horse and when you know that a Ferrari already exists, what will you choose?

Who is the ferrari? A company called Ripple that wants to change this outdated and broken system that favours only a few big players. Ripple is building the Internet of Value where everyone moves value as easy as sharing data on your mobile phone. A way to move money instantly, inexpensively and securely. A level playing field for everyone. The CTO of Ripple, David Schwartz, has said that rapid payments create the need for rapid settlement, and with the current system rapid settlement is not possible. That's where XRP comes in, as it is the perfect rapid settlement tool. xCurrent, Ripple's messaging system, had to be created because the current payments technology isn't good enough to get the benefits of XRP. xCurrent compares with SWIFT gpi, as they are both messaging systems and while xCurrent solves all the problems of SWIFT, eliminating inefficiency with no error rates, better transparency, bidirectional messaging and payment-settlement in seconds, It still doesn't solve the pre-funded liquidity problem, which is the most costly in the banking system and payments.

XRP as a bridge currency can eliminate the need for nostro-vostro accounts (pre-funded liquidity), as well as the need for the many correspondent and intermediary banks. It also eliminates credit and liquidity risk from the process, lowering bank costs considerably. The network finds the best price for exchange and liquidity, and financial institutions are no longer locked in, eliminating the settlement risk. This will benefit the whole system and release the large amount of funds that cost too much and are trapped worldwide, which are estimated to be around $10 trillion. This means that these trillions of dollars are trapped in many fiat currencies all around the world, while they could be used more productively to benefit the economies and solve problems. With XRP, banks and institutions only have to hold their domestic currency and maintain one account with XRP which minimizes the number of intermediaries involved and their markup on spreads. They also don't have to trust anyobdy, since XRP is universal, jurisdictionless and decentralized. Ripple’s On-Demand Liquidity solution uniquely uses XRP to offer liquidity on-demand. Taken together, Ripple and XRP can save money, time and enable instant settlement with actual transfer of value.

On-Demand Liquidity, not only offers instant settlement, but can also cut the nostro-vostro liquidity and treasury operations costs, which represent the 61%, on average, of total fees in every cross-border transaction.

Some people say that SWIFT can partner with Ripple, but that would change the status quo and threaten the correspondent banking system and the big banks that make too much money out of it. They will either adapt or lose a big market share. Don't forget that the head of gpi has said that the goal for SWIFT isn’t to settle in real time, but rather to create certainty for businesses. A certainty with delays, many fees, opacity and vulnerabilites. As Brad Garlinghouse has said pointing to Citi, HSBC and Chase at the top of SWIFT:

They are making a lot of money from other banks. We talk to banks, and 99.9% of them want Ripple to be successful because they’re sick of paying these guys.

Making a head to head comparison of how a payment through RippleNet and SWIFT's correspondent banking is processed, might make you feel disgusted about SWIFT:

In simple words, correspondent banking is theft. So, you understand why SWIFT doesn't want to change its system and create a new one adopting blockchain and digital assets, having also stated that the company decided to build the gpi service without blockchain because it wanted to deliver immediate value to its clients and stated on twitter that cryptocurrencies will not solve delays in international payments. Ironic isn't it? While it has been proven that blockchain technology and digital assets solve all these problems, SWIFT claims the opposite. Too much profit is at stake, why should they change this profitable system? If we compare Ripple and SWIFT we see clearly who is going to win in the long run:

The main difference between them is that SWIFT means just exchange of data, while Ripple means exchange of value. Nobody else in the world offers exchange of value, which means that there is no face to face competition for Ripple and probably will never be, because the main advantage that Ripple has and nobody else has, is XRP. There is only partial competition like SWIFT gpi competes with xCurrent, but not as a whole. Ripple has the full package and that's why they are revolutionizing the whole financial system. Will SWIFT stand in a corner and watch Ripple turn into a behemoth, while they lose more and more customers? Probably, yes.

Read more: Can Ripple Succeed without XRP?

Why XRP is the most misunderstood cryptocurrency