Ripple’s CEO on Blockchain, Crypto, and The Future of XRP: Quora Interview

Below is an interview with the CEO of Ripple, Brad Garlinghouse, that originally appeard on Quora. In the interview, he shared his opinions on the current state of the cryptocurrency market, along with that of blockchain technology and the future of XRP.

Questions appear in the order they were presented on Quora.

Enjoy.

1. Question: How close are we to XRP being adopted by the banks?

Answer: Some of our customers are already in the early stages of using xRapid, Ripple’s XRP liquidity solution. Payments into emerging markets can require multiple currency traders (added costs) and pre-funded local currency accounts in the destination (trapped, dormant capital). Instead, payment providers and banks can use XRP to fund these payments on demand, without intermediaries, at a cost that is less than half of the current cost.

But it’s safe to say that we have to crawl before we walk before we run. This is uncharted territory for banks and payment providers and it’s going to take time before you see broad adoption of digital assets solving this multi-trillion dollar opportunity. Suffice it to say, we are very pleased by the interest from various pilots our customers are already running.

2. Question: Why should I invest in Ripple?

Answer: First a clarification on the question: Ripple is a private, cash flow positive company and we don’t have any plans to raise additional capital (and no offense, but if we did, we’d only raise capital from institutional investors!). However, you can certainly buy XRP — the native digital asset to the XRP ledger.

As a general rule I try not to give investment advice, but I’m happy to give a summary of what drives Ripple’s and XRP’s value. Ripple is focused on enabling a global network of financial institutions to use our software to create what we call the the Internet of Value. Our goal is to lower the marginal cost of international payments to the point where money can move as easily as information does today.

As the network grows and adoption of Ripple’s products increases, the value of Ripple should grow as well. XRP is a digital asset that exists on the XRP ledger, one of the open-source products created by Ripple. XRP is a pivotal component of the Internet of Value since it solves a key point of friction, the pre-funding of nostro/vostro accounts necessary to facilitate cross border payments.

As this occurs, the demand for XRP will increase and markets will reflect that.
I hope it goes without saying that I’m incredibly pleased by the progress we have made to date — with a broad group of global FI customers. And there are powerful network effects that we have seen accelerating that momentum.

3. Question: Can the other banks clone Ripple like currency, so Ripple might become extinct?

Answer: Banks can create their own digital asset, but I believe that approach is deeply misguided.

A bank-issued digital asset can only really efficiently settle between the banks who issued it. I strongly believe banks need an independent digital asset to enable truly efficient settlement and we believe XRP is best positioned for that role.

It goes back to the fundamentals of what makes digital assets unique and special — they’re universal currencies, meaning anyone can use them as units of value anywhere in the world.

4. Question: How will Ripple revolutionize finance?

Answer: In an age where we can talk to anyone in the world instantly and for free, why do global payments take days, cost an arm and a leg and are incredibly unreliable? (you should check out SWIFT error rates!) Payments were never designed for the Internet, so we’re focused on the unsolved problem — the underlying infrastructure.

Today the world sends more than $155 trillion across borders. Our market opportunity is bigger than just moving these payments more efficiently — if we solve this massive problem, we’ll enable an Internet of Value that:

Connects billions of people around the world to transact — instantly

Gives rise to entirely new businesses and industries

And increases financial inclusion

I had the good fortune to be involved in the birth of the Internet of information (I was an early employee at the company that first rolled out cable modems — the @Home Network — yes, I’m kinda old for the cool kid, SF set!) and I think like that evolution over the past 20 years — it’s difficult to predict how an Internet of Value will unlock a myriad of opportunities. Could anyone have predicted how Lyft and Uber have revolutionized transportation 20 years ago?

So yes, I think there is a tremendous opportunity to revolutionize how global financial infrastructure works.

5. Question: Can we expect any significant announcements during the SWELL event?

Answer: Ha. You think I’m gonna let the cat out of the bag today?

Suffice it to say, yes — but Monica has me under strict embargo. We’ll be live streaming the event on our website so you’ll have to stay tuned!

6. Question: When are you going to lock up 55 Billion XRP?

Answer: A handful of months ago we publicly shared our plans to complete the escrow of 55 billion XRP by the end of 2017. For my team’s sanity and security — I’ll simply say that we are on track to meet that objective.

7. Question: What are some things about Blockchain that are just hype?

Answer: Blockchain is like the new big data or AI — too many people are using it as a buzzword and not focused solving a real problem. We like to call them Blockchain tourists! There are many applications that are nothing more than science experiments.

Some of the uses being implemented for blockchain could actually work better with a database. There are examples out there that blockchain is not most applicable for and that is why Ripple is focused on a real world use case, solving a real (and very large) customer problem, which has converted into commercial traction that is unmatched in the enterprise blockchain space.

8. Question: What will set XRP apart from other cryptocurrencies?

Answer: What sets XRP apart from the other major digital assets is that XRP is highly performant and optimized for institutional use in global payments. While I’m personally long BTC and a believer that it’s solving a different use case, the reality is that today the average time to complete a BTC transaction is about 4 hours. In contrast, XRP is about 4 seconds. A couple other similar comparisons important for payments and enabling an Internet of Value:

The XRP ledger can handle more than 1500 transactions / second. BTC is currently ~15 transactions / second.

XRP fees per transaction are measured as fractions of a penny. BTC fees per transaction are measured in dollars.

9. Question: Why is Ripple centralized?

Answer: Ripple is not centralized. To be clear, if Ripple disappeared today XRP would continue to function. To me that’s the most important measure of whether something is decentralized.

Here are some of the facts that demonstrate this:

In May 2017, we publicly shared our decentralization strategy, which is a process that started at the inception of the XRP Ledger and has been ongoing since. First, we announced plans to diversify validators on XRP Ledger, which we expanded to 55 validator nodes in July 2017. We also shared plans to add attested validators to Unique Node Lists (UNLs), and announced over the course of 2017 and 2018, for every two attested third-party validating nodes that meet the objective criteria mentioned above, we will remove one validating node operated by Ripple, until no entity operates a majority of trusted nodes on the XRP Ledger.

That said, Ripple does play a large role in the XRP ecosystem — and I’m very proud of that. We have over 175 employees — and truly some of the planet’s most talented C++ developers, focused and dedicated to growing and expanding the XRP ecosystem. We have significant resources that we are able to deploy both internally and externally (more on that soon) to help the entire ecosystem thrive.

10. Question: What are the most interesting things about you that Google won’t tell us?

Answer: This question is fun for me because this is something we do internally at Ripple. As if your first day on a new job isn’t nerve racking enough, we have all of our new hires tell the entire company something we can’t find out about them on Google.

To say we’ve had some interesting revelations would be an understatement!

I’ll share two things you can’t find out about me on Google, one of which is that I started a record store in college (yes, CDs!).
I also did a short stint as an Uber driver — driving a Tesla. (yes, I’m a walking silicon valley cliche!)

11. Question: What excited you about Ripple when you joined it?

Answer: If you look at the Silicon Valley start-up landscape, many out there are not that intellectually interesting to me and aren’t really poised to put their own dent in the universe. (Do we really need yet another food delivery option!?)

Ripple on the other hand is solving a real global problem — which has the opportunity to have a transformational impact on society.

I was also excited (or maybe more accurately enamored) by the people. They are some of the smartest people I’ve ever met and have a range of backgrounds from finance, regulation and tech. There is no doubt that I’m learning from them every day.

12. Question: Does Silicon Valley have a problem with being humble?

Answer: If I had to give a one-word answer to this question I would say, yes but… let me explain.

I believe a key ingredient to the secret sauce of Silicon Valley is a bit of bravado, even a bit of ego, but oftentimes I see leaders taking the old adage “fake it ’til you make it” too far, and I don’t blame them. It’s challenging to toe the line between being the fearless leader people expect and need you to be while maintaining a sense of transparency, humility, and honesty.

I think that fine line is “humble-tude” and it’s something I talk to my team at Ripple about quite a bit. In our case, we’ve got an outstanding team of people, buzz-worthy technology and an industry-altering product on our hands — but we still have a long way to go before reaching our goal of enabling the world to move money the way information moves today.

I talk internally about “humble-tude” because I hope our team keeps dreaming, keeps innovating and keeps grinding to make our vision become a reality for our customers, investors, and teammates — but all the while embracing the humility to recognize how fortunate we are to have this opportunity.

Conclusion

I hope that you enjoyed the interview and that it gave you some deeper insight into Ripple and their ambitious vision to become the international standard for corss-border transactions! If you did find this of value, dont forget to show your support by clicking the 👏 button. Also feel free to share my content wherever you like!

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