There are many remittance companies in UAE, Saudi & Oman where migrant workers send their salary back home to India, Pakistan, Bangladesh, Nepal & Philippines. UAE Exchange being the major player there. Many of these companies might want to signup for Ripple because they can avoid the middlemen (what if Ripple becomes the middlemen ?) , thus more profits while keeping the fees low for customers and have rapid money transfer rather than waiting days for bank clearance.
The problem in implementing this is the origin & destination country should have legal mechanisms in place to operate this. Many low income migrant workers use schemes called "Hawala" , "Hundi" to avoid the fees charged by the remittance companies.
Maybe RippleNet can work in favor for both consumers and providers. Do keep in mind that RippleNet is not the same as XRP. The remittance houses will have to maintain Nostro and Vostro accounts for funding which I believe is currently maintained in USD. They can switch this to XRP to avoid those transaction fees and overhead.
> Maybe RippleNet can work in favor for both consumers and providers. Do keep in mind that RippleNet is not the same as XRP. The remittance houses will have to maintain Nostro and Vostro accounts for funding which I believe is currently maintained in USD. They can switch this to XRP to avoid those transaction fees and overhead.
For me this doesn't make much sense, why would the remittance operators be willing to hold XRP now? It is unstable and volatile like Bitcoin.
This whole ripple thing sounds like an epic scam. The actual technology is just a story that people can tell without actually understanding the business. Then the actual business is pumping the token, and then dumping at some point.
> why would the remittance operators be willing to hold XRP now?
They don't hold it forever. The sender and receiver hold XRP only for the period of time that the transaction is confirmed and settled, and according to Ripple CEO Brad Garlinghouse, this time is as little as 3 seconds.[1]
Whether you use ripple or any other intermediary, it will not save conversion costs from one currency to other. You are really selling one currency and buying other.
The actual costs of converting currencies on the normal money markets using an account like interactive brokers are almost zero - maybe 0.05% or you can even make a profit on it if you put in a limit order near the current price. The costs are mostly in getting money in to the system at one end and out at the other. I'm not sure how going via crypto will be any cheaper - it's usually more expensive in my experience.
I agree. Ripple is a rip off. Converting to intermediary is not going to help. The costs I was takking about are the exchange rate that local banks charge.
More than that MoneyGram is a loss making entity with a negative equity. This is just an attempt by MoneyGram to pull a Kodak (last ditch attempt to stay afloat by attaching itself to "cypto" currency bandwagon)
It should really be "pull a RIOT" because RIOT Blockchain was 1 of the 1st companies to pull this off.
Struggling medical equipment company. Acquires a "blockchain mining" company for a few mil, stock shoots up overnight like 500% or something, then their CEO dumps all his stocks.
Pulling a Kodak for me would be something else. It would be when a company that boomers love can no longer innovate and just starts licensing it’s image to the highest bidder. We’ve seen this many times with action cams and so on.
> More than that MoneyGram is a loss making entity with a negative equity
Their net income has been positive for each of the last five quarters and their operations and business produced net cash in the first three quarters of 2017 [1].
Their operations throw off substantially more cash than the $30 or so million in interest they pay each year, and their senior notes don't come due until 2020. Moody's and S&P rate them as highly-speculative, non-investment grade companies (B1) [2]. Not great, but not at risk of imminent default either.
It's not a healthy company. But it's not one in the midst of its death throes, either. Given the amount of dumb money chasing anything that smells like Blockchain, it's not particularly dumb to let shareholders sell their shares at a premium to uninformed buyers.
Book equity is a bad sole measure of the health of a business, particularly a financial business.
> Given the amount of dumb money chasing anything that smells like Blockchain, it's not particularly dumb to let shareholders sell their shares at a premium to uninformed buyers.
Are you advocating companies exploiting uninformed investors or just saying that it's the "money-smart dickish move"?
CryTek was on the verge of bankruptcy a year ago when they were unable to pay their employees. The one-time payment from Amazon in exchange for the engine distribution rights is probably running out.
Except moneygram has a huge place in the history of cryptocurrency, where as kodak doesn't even come close. If you purchased bitcoin in 2013 there was a very good chance that you transferred cash using moneygram from a local CVS or Walmart.
Jeez I had a look at their share price. Tripled in 2 days and down 21% the next. It's price movement resembles a typical ponzi token. It is like the bubble thought pathogen has lept from token world to the traditional stock market. Who will be the last fool? Is it 1999?
I don't own ripple, but you don't need a ponzi scheme to see that kind of growth in speculative value. For example, you may have seen the same thing if Uber's valuation was liquid during it's early days.
Of course Uber followed a traditional funding model that restricted access to the top 1% of wealthy Americans. All VC-backed startups do. And many of them follow this curve, it's just not visible to us.
First, I don't know for sure, but one of the reasons why they might show in their balance loss like that, is that they don't want to pay taxes ie. tax evasion strategy.
Otherwise I can't see how else they can have loss while all migrant people are using them to send money home.
True. The whole relationship between Ripple, XRP, and potential other tokens on the same network(?) has always confused me.
If someone has a good explanation (or rather a link to one, I'd be very happy about that.
For example if this test works out, what's to stop MoneyGram from using some other token, cutting out XRP altogether? Or just spin up their own system (think LTC vs BTC)?
That can change by vote, and they're looking at doing that as the price increases. In the past, XRP was well below $0.01, so it wasn't that big of a deal.
You're understanding is 1/3 correct. XRP is only used for xRapid protocol. Ripple Labs has 3 protocols (xCurrent, xVia, and xRapid) and the other 2 do not use XRP. However, it does look like MoneyGram is using xRapid.
The whole point of Ripple originally is that you could use it to send actual fiat money by using a network of trust relationships to chain together IOUs that could eventually be settled via actual transfers if necessary. Then after Bitcoin took off it was retooled as something more Bitcoin-like with its own internal cryptocurrency, XRP, and a ledger system to support it. (Except that the ledger is pretty much centralised.)
XRP is only used as a spam deterrent. There is a 0.00001 transaction fee to change ledgers (send money, but not XRP) in Ripple, that is actually destroyed, and there is a requirement that every account in Ripple maintain a $20ish balance of XRP.
I'm amazed MoneyGram is still in business. I had to deal with them last week and it was hell.
Their reliance on phone support for most operations is absurd. I saw five people attempt to use the kiosk - and all were required to call phone support for various reasons! The kiosk complained about DOB missing (date of birth I guess?), yet there wasn't any field left unfilled. Changes in unpaid/draft transactions resulted in duplicate ones instead, and they could only be deleted by calling support. The kiosk software was filled with dumb errors like that. I could go on an on.
Using cryptocurrencies seems like a good idea, but I'd bet just improving the kiosk software to make phone support a rarity instead of practically a requirement would be way more efficient at reducing cost.
The money remittance market is a very interesting problem. The key to understanding why moneygram is still around is by getting a good understanding of global banking and associated regulation & fees along with top immigration/immigration corridors and consumer behaviour in these corridors.
Most money transfers happen from a stable high net worth economies (USA,UK,Germany, UAE, Saudi Arabia) to growing economies(India, Mexico, Brazil, Philippines) and following the emmigration/immigration corridor.
The money transfer market is more akin to a marketplace with disparate sender-receiver situations. Sender banking infrastructure typically is more sophisticated but disjointed with the receivers banking infrastructure.
I think one thing people, especially on HN, need to remind themselves of is the price isn’t determined by what _you_ think, it’s determined by what _everyone else_ thinks.
This is the best comment. People here know the "value" but the market determines the "price".
I understand why people see the value proposition here and think these things are over-priced, its because people "trading" do not really have the depth and they are playing the market psychology game. For something new, this is more akin to Poker, at this time too many people are playing the people. The question is when the river card show up, who will remain standing.
Same, pretty sure the whole team is buying (small) amounts of bitcoin. Reminds me of the story of the guy who dodged the great depression because he pulled his stocks when his taxi driver starting giving him tips.
don't pay too much attention to stories like that, there are easily countless stories that serve as counterpoint. example, warren buffett mentioned several times in his writings that very often, it's the regular folks who are more capable of spotting potential new investments rather than institutional investors, because they can see businesses succeeding in the real world much sooner than institutional investors spot them on balance sheets.
Yep. Moreso the MoneyGram announcement is not new news, this is their business model. I suspect the well timed press release had something to do with XRP sinking over the past few days.
The entire market sank over the past few days. MoneyGram couldn't have predicted the drop, and I'm not sure why they'd rush the press release to coincide with it.
I think the price of 1 XRP is going to be somewhere between $5 and $10, $5 being more reasonable. The time to buy in was when it was less than a cent and nobody believed it would go anywhere. On a sidenote, I believe Ripple is made primarily by banks and I think the idea was to make it as close to USD as possible. If this is in fact true, it obviously will be overvalued even at $5.
There might be 100B in solving the problem of Moving Money.
But market cap for Ripple is intentionally misleading. only 19,000,000,000 ripple are owned by the masses. 20,000,000,000 ripple are controlled by 3 people. 61,000,000,000 is held by ripple labs.
The 20,000,000,000 ripple held by the founders are included into the market cap.
Not a single price of the top 100 crypto-currencies is reflecting their value. They are all over-priced by magnitudes and still "investors" insist it is not a bubble.
I've not used MoneyGram in many years, but as I recall the friction is account set-up, authentication and funding the transation --> authentication and account set-up to receive funds. I don't think Ripple removes those choke points.
Ripple is not necessarily targeted at end consumers. In some cases you may notice lower fees and faster transactions, however, they are targeting banks and payment providers.
Thanks for posting this, this is my understanding.
Ripple is the company that controls 61% of the worlds XRP. XRP is the medium to move money.
While I personally dont like centralized currency, this is how ripple works. Ripple basically decides the price of their own currency since they have sooo much supply.
Unlike other fraudelend coin startups, Ripple made its self subject to regulations. They cannot simply put all their XRP onto the open market. The 55bn locked in escrow are meant to be sold to institutions partnering Ripple, as other comments have already stated. Regulations aren't a bad thing. They are mandatory and prevent us from being scammed in many cases.
The only thing you can blame Ripple for is the insane amount of ripples their founders are holding.
Wrong. They locked away 55 billion XRP and are releasing a certain amount monthly for purchase by investors and institutions. If that XRP is not purchased, it goes back into escrow.
It's not a cryptocurrency in the sense that it is centralized and pre-mined by a central authority who could mine even more whenever it feels like it just like fiat. Still, it's an improvement on swift if it succeeds but that would not be a "cryptocurrency success" in my opinion.
Personally I think it would be considered a success, swift sucks, ACH sucks - Ripple giving us a way to apply a lot of the benefits a decentralized cryptocurrency purports to provide (cheap, fast transactions) would be wonderful.
Hell, I would love if I could track payment remits through Ripple someday - stop dealing with the terrible EDI formats our bank dumps to us on a daily basis and just monitor the blockchain. We could have knowledge about payments in real-time AND have a much saner time dealing with them.
It uses a distributed consensus algorithm to validate transactions. Anyone can run a validator node, and there are many companies/institutions out there doing that (Microsoft, MIT, etc).
The key property of Ripple you have to understand is that the consensus is decided by a set of nodes controlled by the Ripple team and their partners, and those nodes don't care about the opinion of any other node that's not on their whitelist. Everyone else just listens to what they decide the consensus is and follows along. While in theory you could listen to a different set of nodes, it'd be daft to: if those nodes ever come to a different consensus than the default nodes then you're screwed, and who you trust has no effect on who the default nodes listen to or how their consensus is formed.
As far as I'm aware, there is not use of XRP as of now. There's a difference between Ripple the company and Ripple the centralized blockchain, which many fail to realize.
Do you have any proof that the global banking “cartel” is using Ripple? Why would they want to use some third party company they have no control over, with participation of the general public, for a solution to a problem that they didn’t think was a big enough issue to address earlier, and that they could create a proprietary, private solution for?
I saw the tweets from their CEO and it actually sounded very much like the emperor has no clothes.
If the best examples of "huge global banks" that Ripple can produce when asked are a couple of small-time national banks suggesting they'll trial the software later this year then I'll reserve judgement.
Yes, whatever the Bilderberg lizard people truly in power decide upon. It's all in plain sight if people would just stop drinking the tap water and wake up.
The problem in implementing this is the origin & destination country should have legal mechanisms in place to operate this. Many low income migrant workers use schemes called "Hawala" , "Hundi" to avoid the fees charged by the remittance companies.
Maybe RippleNet can work in favor for both consumers and providers. Do keep in mind that RippleNet is not the same as XRP. The remittance houses will have to maintain Nostro and Vostro accounts for funding which I believe is currently maintained in USD. They can switch this to XRP to avoid those transaction fees and overhead.