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Ripple CTO David Schwartz on Using XRP Ledger for NFTs

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In a recent interview, David Schwartz, an architect of  XRP Ledger (XRPL) and Ripple’s Chief Technology Officer (CTO), talked about the FinTech firm’s increasing level of interest in non-fungible tokens (NFTs).

The XRP Ledger was created in 2012 by David Schwartz, Jed McCaleb, and Arthur Britto, and $XRP is the native currency of the XRP Ledger.

The Evolution of he XRP Ledger

On 27 February 2020, during an episode of “The Ripple Drop” (Ripple’s web video series), Schwartz spoke with with producer/editor Reinhard Cate about the evolution of the XRP Ledger.

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Cate started the interview by asking Schwartz how the XRP Ledger started and what its current status is.

Schwartz replied:

Well, I started working on what we now call the XRP Ledger at the end of 2011; so I’ve been at this for eight [or] nine years… but the changes have been drastic. I mean in the early days all we had was the ability to perform a transaction on a decentralized ledger in just a couple of seconds, and then we started to realize that the properties of the algorithms that we developed allowed us to do things like a decentralized exchange.

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And then we had this idea of allowing people to issue assets and ideas like community credit, and we put all that together into a functional system probably in mid 2012.

Cate then wanted to know why the robustness of the XRP Ledger is so important.

Schwartz said:

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You have to realize that you’re talking about billions of dollars in a system that doesn’t have an administrator. There’s nobody that you can go to if it messes up, and so reliability is the number one property, and it means that these systems are very slow to develop and evolve.

In the early days, before I was working on the XRP Ledger and I was looking at Bitcoin, and we sort of had this idea that if there was any new feature, Bitcoin would just adopt it.

We now know that’s hopelessly naive because any change to a system like this imposes cost on everybody who uses the system. With any other piece of software, a company will release a new version of the software, say Oracle releases a new version, and they’ll say to people who have like mission critical deployments ‘don’t upgrade to the new version, just use the current version, give us a little bit of time, test it whatever’.

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You can’t really do that on a public blockchain — if the rules change, people have to run software with the new rules. You want to ask why these systems don’t move more quickly, why they don’t add features on a regular basis, that’s why.

XRP Ledger and NFTs

Back in February, Wietse Wind, Founder of Ripple-backed XRPL Labs, came up with a proposal for implementing support for non-fungible tokens (NFTs) on the XRP Ledger (XRPL) that does not require changing the code for the XRPL. On February 26, Wind started a discussion for his proposed standard for working with NFTs on the XRP Ledger.

Wind started by explaining how NFTs are different from XRP tokens:

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A non-fungible token (NFT) is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not mutually interchangeable. This is in contrast to eg. the native asset on the XRPL, XRP, where XRP can be sent and received without being uniquely (per token) identified.

Where normal tokens and the native asset XRP can be divided (eg. receive 1 XRP, send 0.5 XRP), NFT’s can only be used as one whole, unique token: they are indivisible.

He gave some examples of use cases for NFTs:

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Non-fungible tokens are used to create verifiable digital scarcity, as well as digital ownership, and the possibility of asset interoperability across multiple platforms. NFTs are used in several specific applications that require unique digital items like crypto art, digital collectibles, and online gaming.

Wind then pointed out XRP Ledger already “supports issuing tokens… that can be issued, sent, transacted to other XPRL accounts, etc.”

Here is the basic idea behind Wind’s proposal:

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The XRP Ledger has an issued token precision of 15 significant figures. The smallest amount of an issued token the XRPL can handle is 1000000000000000e-96. The decimal value of this scientific notation is:
0.000000000000000000000000000000000000000000000000000000000000000000000000000000001
0.{80 zeroes}1…

Let’s assign the last (say) 11 figures to client side / user interface ‘NFT behaviour’…

If the value of issued currency is in the range of 1000000000000000e-85 – 1000000000000000e-96, clients should handle (represent, mostly a user interface affair) the amount as NFT.

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The beauty of this proposal is that it “requires no amendment on the XRPL side, as all of this is possible today” and the modifications need on client side software (e.g. wallets) is pretty simple to implement.

Then, during the Apex XRPL Developer Summit (September 29-30), Ripple launched a $250 million fund aimed at supporting those who want to “create and monetize accessible and innovative non-fungible token (NFT) experiences on the XRP Ledger (XRPL).”

Ripple’ Creator Fund was launched on September 29 in collaboration with Mintable, mintNFT, and VSA Partners. According to Ripple, three categories of people and organizations can apply for funding:

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  • All creators—from musicians and artists to performers and athletes—and global brand representatives who want to create innovative experiences for fans and open new revenue streams
  • Creative and talent management agencies that are seeking to provide clients a low-risk way to experiment with and promote NFTs
  • Innovators at digital marketplaces that are looking to integrate with the XRP Ledger, bring top talent to their platforms and deliver a seamless NFT experience for developers

The three key features of this fund are:

  • Technical support to integrate with the XRPL and build best-in-class NFT experiences
  • Co-marketing and creative agency support for NFT creation and promotion
  • Access to XRPL marketplace partners that provide seamless NFT experiences for both creators and developers

Schwartz’s Latest Thoughts on NFTs

Recently, Schwartz was interviewed by blockchain analyst and Cointelegraph reporter Rachel Wolfson.

Here are a few highlights of what Schwartz told Wolfson about the use of XRPL for NFTs:

My talk at NFT NYC was mostly about carbon-neutral NFTs with the XRP Ledger and solving the energy consumption problem. Obviously, we aren’t going to solve climate change in the blockchain space, but the least we can do is not make it a lot worse. It’s not a technical problem — we know how to not consume that much energy, it’s just a matter of convincing people to adopt the technologies that are more climate-friendly…

We were a little late to the party, but not too late. If NFTs are successful, then we are all still early. We initially started to look at how people wanted to use NFTs and realized that a lot of the challenges people were facing were due to the technology being very primitive...

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Part of Ethereum’s low transaction speed and cost is due to the fact that you can build more flexible technologies on the blockchain. Most people who build on the XRP Ledger are doing complex things, but for technical reasons they don’t need these to be right on the ledger…

We don’t have those capabilities on the XRP Ledger today, but you can mint NFTs. The XRP Ledger also has a decentralized exchange (DEX), and you can issue new tokens. Payments are cheap and fast, so to some extent, it’s a fundamental engineering tradeoff.

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Macro Guru Raoul Pal Owns XRP, Says Crypto Asset Has Phenomenal Risk-Reward Despite Ripple Lawsuit

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Real Vision chief executive Raoul Pal is explaining why he is a holder of the XRP and how he sees the crypto asset’s risk/reward ratio.

The former Goldman Sachs executive says in a new interview with Thinking Crypto that he bought a position in XRP about a year ago, citing the U.S. Securities and Exchange Commission’s (SEC) lawsuit against the payments company Ripple as a primary factor.

“I bought it for the reason that A) It does have use cases and it is being used, and B) The court case is a phenomenal risk/reward.

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It got heavily discounted in the price, and then I looked at it and thought, ‘Well, what’s it going to do? Fall 100% from here to zero? But if it gets solved, it’s [up] 10x.’ And I’m like, ‘Well that’s a no-brainer.’ Why would you not take a 10-1 risk/reward that has a catalyst around it?”

The SEC filed charges against Ripple last December alleging that the San Francisco-based payments company sold XRP as an unregistered security during its launch. The regulator alleges that XRP remains a security to this day.

Pal says his XRP bet hinges entirely on the court case.

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“It’s all about this court case, right?

Because the price can’t go anywhere – it got delisted from everywhere. It can’t go anywhere until it’s resolved, because the richest, most powerful country on Earth is not allowed easily to invest in it.”

Ripple chief executive Brad Garlinghouse said last month that he was hopeful the legal battle would be resolved next year.

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XRP is trading at $0.814366 at time of writing and is down -0.86% in the past 24 hours.

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XRP constricts before breaking out to $1

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  • XRP price begins to move above the consolidation it has experienced post flash crash.
  • A key test of the $.90 value area would be the final hurdle before XRP hit $1.
  • Bullish entry setup is now present on XRP’s Point and Figure chart.

XRP price, like almost every other cryptocurrency, showed strong signs of recovery after the shock of this past Saturday’s flash crash wore off. The past three days of congestion after a strong rally from the lows may begin a new uptrend for XRP.

XRP price ready to test $0.90, $1.00 next

XRP price has held a strong level of support near the $0.83 value area every since Sunday. Concerns about further downside pressure remain, but the bullish behavior of XRP during the NY lunch hour showed evidence of some substantial buying volume.

There is a hypothetical long trade opportunity on the $0.05/3-box reversal Point and Figure XRP price chart. The entry is a buy stop at $1.05, a stop loss at $0.85 and profit target at $1.75. The entry is based on a Point and Figure pattern known as a Bearish Shakeout. This pattern is valid only when a trend reversal is anticipated and positioned to do so. A two-box trailing stop would help protect any implied profits.

XRP/USDT $0.05/3-box Reversal Point and Figure Chart

If the hypothetical long entry triggers, traders should expect some resistance at the $1.15 and $1.25 value areas before any substantial rise occurs. Additionally, a pullback to the entry zone after $1.50 is another likely scenario that traders should watch out for.

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However, bulls should be aware that downside risks remain for XRP. The biggest cloud hanging over XRP remains the unknowns with the ongoing SEC case, which will have ramifications market-wide.

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XRP Forecast and Analysis December 8, 2021

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XRP/USD are trading at 0.8206 and continue to move as part of the correction and the downward channel. The capitalization of the Ripple cryptocurrency at the time of the publication of the forecast is $39,508,554,960. Moving averages indicate a short-term bearish trend for Ripple. Prices went down from the area between the signal lines, which indicates pressure from the sellers of the asset and the potential continuation of the XRP rate decline in the market already from the current levels. At the moment, we should expect an attempt to develop asset growth and test the resistance level near the 0.8565 area. Further, a rebound downward and the continuation of the fall of the cryptocurrency to the area below the level of 0.4955.

XRP Forecast and Analysis December 8, 2021

In favor of falling XRP/USD quotes, a test of the resistance line on the relative strength index (RSI) will come out. The second signal in favor of a decline in asset quotes will be a rebound from the upper border of the descending channel. Cancellation of the option of falling cryptocurrency will be a strong rise and closing of quotations above the level of 1.1005. This will indicate a breakdown of the resistance area and continued growth of XRP/USD to the area above the level of 1.1565. Confirmation of the fall in the digital currency rate will be a breakdown of the support area and closing prices below 0.7245.

XRP Forecast and Analysis December 8, 2021

XRP Forecast and Analysis December 8, 2021 implies an attempt to test the resistance level near the 0.8565 area. Where can we expect the cryptocurrency to continue falling with a potential target at the level of 0.4955. An additional signal in favor of a decline in Ripple will be a test of the trend line on the relative strength index (RSI). Cancellation of the option of falling quotations will be a strong growth and a breakdown of the 1.1005 area. In this case, we should expect a continuation of the rise in the digital currency with a target above 1.1565.

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