Quote from: JoelKatz on May 31, 2017, 04:01:29 PM

Quote from: kadscuk on May 31, 2017, 04:18:14 AM

Last thing, as for banks using the quickest and easiest way, it would seem to me that the quickest and easiest way would be to bypass the liquidity issue altogether and peg cyber tokens (with no dollar value) to fiat. And then use that. Why does the cyber token need to have any money value whatsoever? Why does the XRP have to have any monetary value? It doesn't.

Banks can just as easily make their own tokens (with no dollar value) and peg that to fiat. Which is what groups like R3 could very easily do

I don't understand what you're suggesting. If the token has no dollar value, what purpose does it serve? Do you mean it merely keeps track of who owes what to whom? If so, how do you settle those debts?

And when you say "peg that to fiat", do you mean to have one such token for each fiat currency? If so, how do you provide cross-currency liquidity? Or do you mean to peg one token to more than one fiat currency? How do you do that?

I think what you might be missing is that the main issue is moving actual value between islands of liquidity. How would a valueless token move value between, say, Europe and India?

The kind of system you're talking about (if I understand you correctly) is great for domestic payments and very similar to what many countries currently use. It doesn't move value though, so it doesn't help much with the problem Ripple is targeting.

You would have one token only - say R3 token which has a fixed rate to each fiat currency.

Examples:

1 x R3 = $0.25
1 x R3 = £0.20

The same way that 1 x XRP currently equals $0.226

The difference though is that R3 isnt a sellable token on any open market exchange or outside a banking system. Its purely an agreement between the banks to keep track of who is sending what and who is receiving what.

Nobody has to "pay" anything to buy the token itself, yet it can still transfer liquidity across "islands"

There would be "value" for lack of a better word in the token because it's pegged to a fiat amount, but its not sellable outside its immediate function.

This is the ideal way to save banks money, plus reduces volatility by stopping outsiders manipulating the price/supply etc.

Why the bank should have to pay for a token that the bank itself has made doesn't make sense. If the banks all agree to use a middle token then that will be that...no money has to be involved in "buying" the token.

What ripple is doing with XRP is selling an open market token to the banks..but the banks dont need to use an open market one...surely they can use a closed-doors one? Why does the token that banks use have to be open market?

Which is where stuff like R3 and ripple being open source (+ other techs) makes the xrp offer less attractive