XRP News Update: June 5th, 2019
In this edition of the XRP News Update, I cover a significant change to XRP’s ‘default UNL,’ provide easy-to-access coverage of the recent AMA by Stefan Thomas, and highlight important announcements about XRP exchanges.
Ripple has been consistently participating in industry conferences at a fast pace in the last few months, with the entire executive team increasing their engagement with public-facing stakeholder organizations and forums.
The latest conference was the European ‘Money 2020’ conference, where Ginger Baker, Ripple’s Senior Director of Product, was onstage talking about Ripple’s vision for the Internet of Value:
The conference series makes a habit of posting their videos on their YouTube channel after events, so we may be able to view more of Ginger Baker’s panel discussion in days to come.
Ripple released a statement on June 3rd regarding their usage of market data for sales volumes. In the statement, Ripple indicated that they’d be adjusting their planned quarterly sales downward in response to criticism from industry experts that volume data published by some outlets could be overstated.
Their official statement included the following comment: 1
“While we aren’t claiming to have an exact solution, we are taking steps at Ripple to address these concerns and the questions they raise about the overall reliability of market structure and reporting at digital asset exchanges worldwide:
- We are actively working with trusted partners in the space to better understand the scope and scale of the problem.
- We are evaluating our approach to XRP volume reporting, including reviewing new options and requirements for sourcing market data.
- We are taking a more conservative approach to XRP sales this quarter.”
This communication was received positively by the community; after Ripple’s Quarter 1 2019 XRP Markets Report, they received criticism for basing their sales percentages on Coinmarketcap volume data, which is widely believed to be overstated based on competitive reporting practices by various exchanges looking to improve their ranking on the site.
In my own analysis, I brought up their conundrum as a championing organization: Since Ripple is the largest holder of XRP, it has the unenviable task of balancing XRP sales & investment with market health and robustness.
It’s great to see Ripple take a proactive step and continue to set an example of clear and transparent reporting by a championing organization. Maintaining the trust of market traders and participants is critical to growing XRP liquidity.
The AMA session itself, while live, ran into an inundation of Bitcoin maximalists and others that trolled Stefan Thomas, and were suspicious of many ‘new accounts’ that showed up to the AMA.
Of course, there was a logical reason for these ‘new’ accounts: The AMA was announced on Twitter, and many of those fans didn’t have accounts on Reddit; so they ended up creating Reddit accounts with very little ‘karma’ (Reddit’s version of social capital), and then asked Stefan Thomas questions.
Regardless of the attempt by some Reddit accounts to derail the AMA session, Stefan Thomas’s comments to serious questions were captured and stored; I’ve taken most of the questions and answers that he was able to respond with, and placed them below.
In approximately five cases, I chose not to publish questions if they dealt with topics extraneous to Coil or the XRP ecosystem. However, I made an effort to be as comprehensive as possible, and even included a few of the ‘fluff’ questions at the end.
Here are most of the questions and answers, sorted roughly by topic:
Question: Why do you hate blockchain?
Answer: First, sorry for the ‘click-baity’ title!
As an engineer, I “hate” working with blockchain because it’s a distributed system (complex) run by different parties (politics) which makes it challenging. Sometimes, that effort is worth it. For instance, I do think that for having a truly decentralized currency, a public blockchain is worth the trouble.
But there have been too many use cases proposed for blockchain that just aren’t a fit, so now I hate it like I hate other IT buzzwords like cloud or SaaS.
Question: Do you have any core ideologies you use to decide when to use a blockchain/Interledger solution over a traditional database technology like MySQL?
Answer: To me, blockchain is a technology of last resort. It’s complex and hard to manage, so I’d want to eliminate other options (like MySQL) first. If you are trying to decentralize a well-understood, well-established use case, decentralization has a big benefit, and there is no way to do it other than with a blockchain, go for it.
Interledger is intended as a generic, open payments layer. So if you have an app or something that needs to make payments, then building it on Interledger makes sense.
Question: Many developers would avoid ads in their apps if they could earn money without interrupting the user experience.
Will/When will Coil release an SDK/library so app developers can monetize their apps using Coil?
Answer: The mobile ecosystem is tricky for us because it is more proprietary than the web. On the web, we can use an open browser API and work towards making it a widely adopted standard. There is the mobile web of course, so we will put a lot of emphasis on that. For traditional apps, we will offer an OAuth option, i.e. people can log into monetized apps with their Coil account but it’s not as good of a user experience as true Web Monetization, so our focus will be on web and mobile web.
Question: Will mobile apps or mobile browsers be able to benefit from Coil? How will you handle environments like Chrome for iOS, where you cannot install the add-on?
Answer: We are excited about Puma Browser, which will be a Web Monetization enabled browser for iOS.
We think that’s the right direction for mobile – browsers that support it natively. We do think that long-term there is a strong case for Web Monetization to be adopted by major browsers.
Question: What’s next up on the road-map for Coil?
Answer: We have been lucky to have some incredible creators adopt Coil. Our one and only focus right now is to make sure they are successful on the platform. That means we’ll invest in growing their audience and making sure they get paid for the work they put in.
Question: Hi, Stefan. I will shamelessly ask you as an investor. Does Coil actually utilize XRP and its distinctive advantages or is it just one of the assets I can choose to receive?
Answer: We do all of our outgoing Interledger settlements in XRP. For me, the XRP use case I’m most excited about is as a settlement asset for Interledger payments. We are finding that it works very well for that. (Low fees, fast – meaning you can settle cheaply and often.)
Question: Are all payouts the same on Coil, regardless of content type? If so, should they be? For example, most would agree a painting is not looked at as long as a lengthy article (in most cases) but that doesn’t mean it’s any less valuable.
Answer: Great question. When users pay us $5 a month, we see it as our duty to figure out to spend that money in line with that user’s views. That’s obviously not easy. We could ask the user every time they go to a site how much we should pay, but that would get annoying and it wouldn’t even be easy for the user to make that calculation on the fly.
So we’ll have to use some kind of heuristic which would take the user’s feedback, the type of content, the reviews by other users, whether it is exclusive content or now, whether there are ads or not, etc. The good news is that Web Monetization is an open standard, so you won’t be stuck with Coil’s attempt to solve these problems. Others can create their own Web Monetization service providers that give access to all of the same content.
Question: Can you explain Interledger to a layman guy who knows very little practical knowledge on blockchain and how this is different from that?
Answer: A blockchain is like a ledger, a big book that records everyone’s transactions. Unlike a physical book, a blockchain is distributed, i.e. different computers are working together to record transactions.
Interledger doesn’t record transactions at all. It routes messages that represent money. You can picture it like people handing little Post-It notes to each other really fast. “I’m paying you $0.02”, “I’m paying you $0.03”, etc. You can only hand those notes to your direct peers (i.e. business partners), so to reach anyone in the network, the notes get passed on several times. Obviously, if you’re just handing notes to each other, no money actually moves, so the other rule is that once you have handed a bunch of notes to your peer, you pay them the sum of all of the amounts of all of the notes that you handed them. That payment can happen in any currency and using any ledger that the two of you agree on, US dollars, crypto, whatever.
That’s blockchain and Interledger. Hopefully, that made some amount of sense. 🙂
Question: What is next with ILP?
Answer: I’m very excited about Sabine Bertram’s proposal for Interledger pull payments.
From my Bitcoin days, I remember that some of the biggest blockers for merchant adoption were lack of support for recurring payments, lack of interoperability between different cryptos, and a poor user experience. Once we have Interledger with pull payments support and W3C Web Payments integration, we will check all of those boxes.
My motivation for getting into Bitcoin was always to make payments better and that has never changed. The last eight years felt like slow and steady progress towards that and we are finally getting close.
Question: Do you have any help-full resources for getting started in developing blockchain and interledger applications?
Answer: Helpful resources for Interledger – I would start with Interledger.org, specifically, check out the forum and the Interledger blog.
Question: Is Interledger decentralized and (is it) a guaranty for privacy?
Answer: Interledger is decentralized – it’s a protocol and its incarnation is a network based on individuals and companies peering with one another.
Interledger’s privacy is similar to the Internet but slightly improved in a few ways. Most notably, on Interledger today, most providers generate new, unique addresses for their customers on the fly, so it’s basically as if your IP address changed constantly between visiting different sites, which makes tracking a lot more difficult. A lot of the same technologies that increase privacy on the Internet, like VPNs and onion networks like Tor could also be implemented on top of ILP, at least in principle.
Question: Can you tell us more about Codius? Why isn’t there a big usage/adoption of it at the moment?
Answer: There was quite a bit of adoption when we launched a new version of Codius last year but we didn’t have the bandwidth to support it at the time. If Coil grows, we will eventually have those resources. Or someone else might pick up the idea and run with it. Akash Networks has done some interesting stuff.
I still believe strongly that Codius is an awesome ILP use case and would a really cool and useful technology if it were implemented well.
Question: Do you think XRP can become the main cryptocurrency of the digital market?
Answer: XRP fixes a lot of the things I didn’t like about Bitcoin. The energy usage, geographic centralization, transaction delays, etc. And it has enough support to challenge Bitcoin. But markets aren’t always rational, so who knows how it will all play out.
Question: Hi Stefan, thank you for sharing with us time..Greetings from Iceland. I am a tecnological greenhorn, I am musician interested in freedom and financial independence. So my first question: Is XRP the world currency of the NWO?
Answer: Hi to Iceland! Well, my motivation for working on XRP is to create another, better option in the world of currencies. There are many fiat currencies and now many crypto tokens. XRP adds to that picture. I’m doing my best to contribute to XRP being the best currency it can be but I also don’t think there will be just one winner. There will always be reasons to use different things for different use cases and currencies are no exception.
But if the NWO would like to use XRP, they are welcome to reach out, same as anyone else! 😉
Question: What is crypto currencies biggest enemy? What or who could kill it? And why?
Answer: If there was a concerted effort by most of the world’s governments to drive crypto currencies underground, it would definitely make it harder to achieve mainstream adoption. But I don’t think it would kill it. And I think crypto is already popular enough that it wouldn’t be politically viable in most democratic countries to advocate for an outright ban.
Question: I feel disintermediation is on the cusp of exploding, possibly even supplanting government some day. Do you have ambitions of participating in that specific social-engineering effort?
Answer: Hmm, so you’re effectively asking: do I want to overthrow the government? 😉
I think that there has been a recent trend, particularly on the web towards centralization into a few content platforms. Our vision with Coil is that we get back to a web with a more diverse set of sites. Let’s start there.
Question: A person by the name David Schwartz said you lost BTC what can you tell us about losing 6500 BTC?
Answer: It was 7002 BTC but who’s counting! This was part of the bounty that we won for making the animated video about Bitcoin. I was pretty depressed for about two weeks but at the end of the day money is just money.
There is a very small chance that I could recover the key from an old drive or something but right now my focus is on building Coil so recovering those coins is on the back burner.
Question: Whats your favorite sport? favorite professional sports team?
Answer: Favorite sport would have to be StarCraft 2 and my favorite player is Serral.
If you exclude esports… I’m not closely following any sport but being German, I’d have to go with soccer and the team of my hometown VfB Stuttgart.
Question: Your favorite video game? Mine is half life 1.
Answer: Half-Life is a strong contender. Probably Counter-Strike would be my pick since we played it a lot growing up.
Question: Is your shirt from lockn or just an infinity sign?
Answer: It’s from Society6.com. I liked the design. To me, it’s an infinity sign in the colors of the US flag, so I interpret it as: The principles of the Constitution will live on forever. But I don’t know if that’s what the designer intended it to mean. 🙂
Link to the t-shirt: https://twitter.com/Coil/status/1131666315817693198
Question: Pineapple or spicy pizza?
Answer: I don’t handle spicy food well. So I’m going to have to go with pineapple!
The AMA session resulted in some great content for those looking to learn a bit more about Stefan Thomas‘s take on a great variety of topics, running the gamut from blockchain to ILP to Coil to Codius. As well as his unpopular love of pineapple pizza!
Over the course of the last year and a half, we’ve seen the XRP Ledger achieve greater decentralization levels than proof-of-work networks, with the percentage of Ripple-run validators consistently falling over time.
That trend continued on May 31st, when two new validator operators were added to the ‘default’ UNL list:
One of the validators belongs to the Information Security Research and Development Center at IIT Bombay. For those that don’t know about IIT, it is regarded by many to be equally, if not more, prestigious than the Massachusetts Institute of Technology. According to Nik Bougalis of Ripple, their Information Security Research and Development Center is one of only four information security research centers in India. 2
My reaction to this addition is very positive, because the security of those validators in the default UNL is important to all stakeholders that own or use the XRP Ledger. It’s good to know that some of them specialize in studying proper information security (Infosec).
The other addition is great to see as well, since it’s run by the University of Waterloo, a research university in Canada. For those that don’t already know it, Vitalik Buterin attended the University of Waterloo in 2014 before leaving to engage with blockchain technology full time. 3
Both of these additions to the XRP Ledger ‘default UNL’ are great choices; the new decentralization levels now stand at:
“With Bitcoin and Ethereum, a surprisingly small number of miners could collude to disrupt the system … While Bitcoin and Ethereum are becoming more centralized over time, the XRP Ledger is getting more decentralized.”
History has now proved him correct, as the XRP Ledger continues to achieve greater decentralization as opposed to the continued reliance of POW networks on centralized mining consortiums that are concentrated in one or two countries.
XRP Ledger Development Portal: New Tools
On May 8th of this year, I covered Ripple’s publishing of new developer tools on the XRP Ledger Development Portal.
At the time, they’d recently published three items that were very helpful, including a tool that interacted with the testnet, to allow new developers an easy way to test their own integrations. The new content also included detailed instructions for new developers, such as how to read responses from queries to the XRP Ledger, and an explanation of node metadata.
The tutorial is comprehensive and precise; it’s another great addition to community documentation for those looking to develop using the XRP Ledger.
B1X is a web content monetization platform.
Although I don’t know enough about it to say if it will compete with Coil, I can say that, regardless, it’s great to see a new content monetization platform emerge. The entire idea of content monetization is not a zero-sum game, and there is definitely room for multiple players, especially if content providers can layer multiple solutions and achieve several different income streams.
For example, if I run a website, I would be able to support Patreon donations, XRP Tip Bot donations, Coil streaming payments, and now possibly B1X.
Each of these options can coexist with each other and provide income.
B1X has not released many details about how they plan on monetization, but from their recent blog, it sounds very much like they have the same overall vision that prompted the original creation of Coil and its tools; the replacement of the advertising revenue model.
The great thing about their recent blog is that B1X is very clear that they will build their solution using the capabilities of the XRP Ledger: 5
“Such scalability capabilities are a consequence or replacing the dated PoW consensus mechanism with a much more efficient, green, cheap, censorship-resistant and modern consensus mechanism: the XRP Ledger Consensus Protocol (XRP LCP).
The adoption of the XRP LCP, allowed the XRP Ledger to sidestep the high costs associated with PoW mining, while maintaining a very secure, stable and enterprise-ready consensus architecture capable to resist Sybil attacks and to avoid double spending.”
Not only does this statement reflect a deep understanding of XRP’s value proposition, B1X hinted that they may be using a different monetization approach than Coil, possibly by leveraging the features of the XRP Ledger’s Decentralized Exchange (DEX):
“At B1X, we believe in technology agnosticism, and that is why the ability to issue IOUs on the XRP Ledger, was another of the main features that led us to choose this blockchain for the purposes of building our project.
This feature, for example, would allow us to create monetization mechanisms where users would not only be able to exchange or pay with XRP, but also with BTC, ETH, USD, JPY, and every other currency or asset you may think of.”
It’s fascinating to think about a multi-currency monetization platform and what that might imply. The blog post didn’t indicate if they were planning on issuing their own token or not, or whether they’d be using a specific exchange’s counter-party asset for remuneration. Perhaps as their go-live date draws closer, the project team will share more design details.
B1X’s official site indicated that the Beta launch is planned for November 11th of this year. 6
There was a fair amount of news in the last week about existing and new XRP exchanges, with some important announcements. Below is a summation of XRP exchange news from the previous week:
In a sad turn of events, the current CEO of XRP United informed XRP Chat members – along with exchange users – that the founder of the business had recently died. In the announcement on XRP Chat, @AdmiralVint indicated:
“As the CEO of XRP United exchange, I am very sorry to let you know that P3T3RIS , a key member of the XRP community and a great visionary and a valued member here has passed away.”
The site had gone live in 2018, and was run by a vocal entrepreneur who went by the XRP Chat avatar name @P3T3RIS. While he and several other prominent XRP Community members had debated topics on occasion in the past, the entire community paid their respects to him and his contributions on the thread, with many members communicating their sincere condolences.
In addition, XRP United’s official Twitter account indicated that, as a result, the exchange would eventually be shutting down as of July 1st:
The news struck me as sudden and shocking, as it wasn’t very long ago that I remember @P3T3RIS excitedly announcing the opening of the exchange, along with a subsequent promotion in December where he was planning on giving away an actual Lamborghini. 7 After getting over the shock, I was just sad that he was not able to fully enjoy or realize his vision, and hoped that his family, friends and business partners were able to cope with his sudden loss.
Gatehub was the target of a recent theft of an undisclosed amount of XRP.
Some account owners noticed unauthorized withdrawals at the end of May, and notified Gatehub; the exchange eventually released the following statement via XRP Chat: 8
“Recently, we have been notified by our customers and community members about funds on their XRP Ledger wallets being stolen and immediately started monitoring network activity and conducted an extensive internal investigation.
Although we have not identified any action or omission by GateHub that may have facilitated or allowed this apparent theft to occur, we apologize deeply to all of our customers for this issue and pledge to get to the bottom of it.
We already sent out an email to all users that might be affected as a result of suspicious API calls with instructions on how to protect their funds.
If you received an email from us, please read it carefully and act accordingly.
If you have not received an email from us, then we have no reason to believe your account was compromised.
While the investigation is still underway and we can not post any official conclusions just yet here are a couple of findings so far.
API requests to the victim’s accounts were all authorized with a valid access token. There were no suspicious logins detected, nor there were any signs of brute forcing.
We have however detected an increased amount of API calls (with valid access tokens) coming from a small number of IP addresses which might be how the perpetrator gained access to encrypted secret keys.
That, however, still doesn’t explain how the perpetrator was able to gain other required information needed to decrypt the secret keys.
All access tokens were disabled on June 1st after which the suspicious API calls were stopped.
At the moment we estimate that 58 XRP Ledger wallets were compromised. So far it looks like all the victims had their XRP Ledger wallets hosted on GateHub, but we cannot yet rule out that some wallets were not.
To conclude the investigation as soon as possible, we are working closely with a professional IT forensics team to determine whether our system was compromised or not.
Appropriate Law Enforcement Agencies were also notified about these thefts, and we will work diligently with them to help track the perpetrator who did this.
We will post an official statement after the internal investigation has been completed.
Last but not least, we would like to thank the community for offering continuous help.
If you have any information that might help us or law enforcement agencies, please contact us via [email protected].
Founder and CEO, GateHub”
In a followup over Twitter, Gatehub sent me a direct message that indicated they will be posting an official statement after their own “internal investigation has been completed,” and indicated that they are in communication with “all users that might be affected via email, support page, or phone.”
My hope is that Gatehub will also:
- Actively and aggressively help track the stolen XRP
- Consider the possibility of insurance claims or remuneration for those impacted by the theft
XRP Forensics, the Twitter account that emerged this year to consolidate the combined anti-fraud and investigative efforts of @Silkjaer, one of the most skilled forensic data analysts that specialize in the XRP Ledger, and other stakeholders, sent out a tweet on June 5th:
The tweet led to a blog by Thomas Silkjær, where he tracked the major portions of the stolen XRP to various exchanges that were used to cash out:
“The same day we made contact to Gatehub to make them aware of the potential security breach while continuing our independent investigation and contacting exchanges where the offender appeared to have laundered money …
… A theft that involves multiple victims needs to be handled via law enforcement in various countries. We strongly advise victims to file a complaint with relevant authorities in their jurisdictions.
We are trying to get in touch with as many victims as possible, please reach out to us on [email protected].”
The strange part of crypto thefts is that the perpetrator, by definition, must use centralized exchanges to ‘obtain their fiat’ from the stolen crypto. So, in essence, this is the weak point in their criminal enterprise.
My sincere best wishes go out to those affected; losing crypto is a painful occurrence and I hope that the perpetrators can be located and the funds recovered. Exchange hacks and thefts are never good for either XRP or the broader cryptomarket.
Thanks to those volunteer community members that are a part of @xrpforensics for helping some of the theft victims track the stolen XRP.
CatalX is a new exchange that formally opened on May 30th, based in Vancouver, Canada:
Even though their platform’s current version doesn’t use XRP as a base currency, it’s noteworthy for another reason: They use the Canadian Dollar (CAD) as one of their base currencies, against XRP in addition to a variety of other cryptocurrencies.
Each time a new exchange adds another version of an already-supported pairing, it increases the potential reach and deepens the globally-scoped order books for that pairing, and fiat pairings are especially important for XRP, since it’s primary use case is to operate as a bridge currency for cross-border value transfer.
While CatalX is affiliated with Bittrex, a US-based exchange and Ripple xRapid partner, it’s unknown at the present time whether Ripple will consider integration of xRapid with a Canadian-based exchange. My guess is that the Canadian corridor is not very high on the priority list currently for Ripple, but that it may be one that is considered in the near future as the higher-frequency xRapid remittance corridors are built out.
Bitex is an exchange that began operations in 2018, and recently decided to add XRP pairings on May 30th:
The support of multiple fiat pairings is great news, and it’s not too often that we see a Russian Ruble pairing alongside a USD pairing. I wasn’t able to find any reported volumes for Bitex on Coinmarketcap; however, not all exchanges report volume to these consolidator sites, so I have no source for the exchange’s current volume levels or order book depth.
It will be interesting to follow Bitex’s progress and see whether the exchange can attract material numbers of traders.
- Thanks to Leonidas Hadjiloizou For his references to both CatalX and Bitex
- I do not personally endorse any exchange
Every once in a while, I profile a new crypto swag store that catches my eye, especially if they end up stocking some impressive new designs that highlight XRP.
Some of these crypto swag stores are owned and operated by those in the XRP Community, which is great, because then when I purchase items from them, my shopping ends up indirectly supporting XRP more so than if I was spending my money at a ‘generic’ crypto swag shop.
Such is the case with the latest one I noticed on XRP Chat – a store called the “XRP Merch Store:“
In addition to a large number of original designs on hoodies, t-shirts, and other clothing items, his shop fulfills the purchases using Amazon, with all of the associated benefits from that platform’s global delivery.
In a Twitter DM, the owner of the XRP Merch Store provided his reason for creating the store:
“…It kind of developed from me just wanting an XRP themed shirt, to where it is now, and if people like my designs and decide to get themselves a shirt I’m super happy, but I just wanted to let the designs speak for themselves and see where it goes.”
Good luck to the XRP Merch Store: I hope that XRP fans throw some business his way.
Keep Updated on XRP
To stay up-to-date on the latest XRP ecosystem news, make sure to subscribe to my blog on the XRP Community site and on Coil, where subscribers will also be able to access exclusive content at the end of selected blogs: Thanks for reading and remember to support other XRP Community members as well!
Sources and Credits:
Cover Art: Thank you to [Adeolu Eletu](https://unsplash.com/adeolueletu)