Ripple CTO predicts the death of ICO in 2018

Learn about 2018 cryptocurrency trends from Chief Technical Officer of Ripple 
28 December 2017   2129

The technical director of the Ripple and one of the creators of the Interledger payment protocol, Stefan Thomas, shared with CoinDesk's his thoughts on what awaits the crypto-currency and blockchain industries in 2018.

According to him, the market of initial coin offerings (ICO) will decline, and traditional financial institutions will use digital assets increasingly .

Death of ICO tokens

According to Thomas, the crypto currency was a "buzz word" in 2017, which provoked a rapid increase in the total capitalization of digital money (now it exceeds the equivalent of the largest US bank JPMorgan) and the number of ICO. However, he is confident that in 2018 this direction in the industry is expecting a serious decline.

In particular, crypto-currency fund-raising campaigns attract more and more attention of regulators, and many turned out to be fraudulent. Stefan Thomas is confident that in the future this will lead to legal proceedings, fines and even prison terms for unscrupulous ICO organizers.

In addition, he raises the question of the appropriateness of specialized tokens. For example, why should companies accept Filecoin when ordinary tokens of "general purpose" can boast of higher liquidity and simplicity of transferring to fiat? People do not use separate currencies to buy clothing or electronics, and ICO token holders will eventually realize that the same economic laws apply in the digital world, Stefan said.

Financial institutions will use cryptocurrencies

If in 2017 a lot of speculators came to the digital money market, then in 2018 it is worth waiting for the tide of institutional players, including asset managers, pension funds, payment operators and other financial organizations, Thomas believes.

He notes that today the growth of over-the-counter trading in digital assets has begun - for example, bitcoin futures have already been launched by the CBOE and the CME Group. Thomas is sure that the appearance of derivatives based on other crypto currency is just a matter of time. According to his estimates, the "first swallows" will appear in the summer of 2018.

However, they are waiting for the industry and their difficulties: regulation, forks, banking nuances, etc. In addition, the uncertainty of the regulatory environment in the US, China and other countries can prevent the development of the digital assets market. While countries like Japan and the Philippines have met crypto-currencies with open arms and have created the appropriate legal framework, many states still can not decide on the laws and policies for digital money, Thomas said.

Blockchains will start to interoperate

In 2017, the total share of bitcoin in the market of crypto-currencies fell from 87% to 50%. Hundreds of new coins and tokens were created, but the creator of Interledger thinks that all of them really get into the mainstream, many blockchains should become compatible.

Of course, in the future there will not be any one dominating blockhouse any more, as there is no single Internet provider or e-mail box, however operations with various crypto-currencies should be, first of all, convenient for users.

As an example, Thomas provides his own protocol Interledger (ILP), which in June allowed to unite seven distributed ledgers, including bitcoin, Ethereum and XRP. If all networks activate ILP, then it will not matter what currency the end user prefers: he can, for example, easily and quickly pay off Ethereum coins in a store that only bitcoins accept.

The appearance of hybrid blockchains

Today, blockchains are usually divided into two types: public (for example, bitcoin) and private (Hyperledger Fabric). According to Thomas, in the future this separation will become much less noticeable due to the appearance of hybrid blockhouses combining the advantages of both types.

Such a hybrid blockchain can operate in the open Internet space and be accessible to all users, as well as public, but use a smaller set of validators and focus on specific tasks that are peculiar to private registries.

As a result, "mini-blockchains" can be adjusted to specific needs and tasks, instead of using a standard set of common rules. Such specialized networks will become more popular in 2018, Thomas assured.

Specialization or generalization?

At first glance, it may seem that Thomas contradicts himself: first he praises tokens of general purpose against the background of specialized ones, and immediately afterwards tells about the advantages of specialized blockchains. However, all this is interrelated: the more compatible the various ledgers become, the weaker will be the dependence and connection between the blockchains and tokens. Such a large-scale transformation will not do without its "pains of growth", but 2018 promises to become very interesting for the world of crypto-currencies, Thomas summed up.

Crypto Won't Replace Fiat, XRP CEO Says

But head of Ripple believes that cross-border payments are the sphere in which cryptocurrencies can be an ideal solution
05 September 2018   589

Ripple's CEO Brad Garlinghouse is convinced that the fiat currency will not lose relevance in the near future and called "senseless" the possible replacement of traditional currencies with digital assets. The future of crypto currency lies in cross-border transactions, Garlinghouse said in the Stanford Legal podcast. This is reported by CoinSpeaker.

I don’t think we’re going to be buying coffee at Starbucks with Bitcoin or XRP anytime soon. I think we’ve got to ask ourselves: What problem is that solving? You were talking about paying for the day spa bill and how you do that, but I think in some ways the friction – fiat currency, the US dollar in this case works pretty well, and so we need to make sure it’s better than that before we talk about it as a currency…

Brad Garlinghouse

CEO, Ripple

According to Garlinghouse, cryptocurrencies can be used in the st way in international payments and as a means of preserving value. This is especially true of crisis and weak economies, with a high level of inflation. He noted that the average annual inflation of the currencies of countries outside the G20 is about 6%.

There are economies where the fiat currency is at best a weak currency. And in those contexts, if I were a consumer experiencing hyperinflation – would you rather hold a cryptocurrency or your fiat currency? And in a lot of those cases, you’re seeing people take their dollars, or not dollars, pesos of various sorts, and saying, ‘I’d rather hold this because it’s a better asset to hold in terms of its potential appreciation and lack of inflation.

Brad Garlinghouse

CEO, Ripple

The head of Ripple stressed that cross-border payments are the sphere in which cryptocurrencies can be an ideal solution. He also noted the Ripple, which allows to conduct international transactions "almost in real time". This will help many companies save time and resources.

We had one of the largest banks in Australia, the CEO told me that 40% of all of their consumer wire transfers result in a customer service phone call. The frustrating thing for the bank is not only do they have to absorb the cost of taking a customer service phone call, they also deliver the news that they don’t know wait a couple more days it’ll probably be there.

Brad Garlinghouse

CEO, Ripple

Earlier, the Northern District Court of California rejected a class action lawsuit filed by investor Ryan Coffey against Ripple Labs Inc. on behalf of everyone who bought XRP tokens after January 1, 2013. The company was accused of illegally manipulating the price of XRP.