In conversations with CoinDesk, executives from both banks explained why protocols like Ripple are a step toward what could become an “Internet of money”, and how these systems can change the way people send money around the world…
Just as we needed a way to freely share information, we needed a way to freely exchange value. Implementing a standardized payment protocol was a natural fit. But while data can live in a world where it’s easily reproduced, value inherently exists as the result of scarcity…
A recently released white paper from Ripple Labs examines how decentralized mechanisms can prevent bad actors in a block chain payments system from creating fake transactions. The Ripple Protocol consensus algorithm (RPCA) uses a node election system to establish the veracity of new transactions, adding them to a continuous chain of closed transactions that are considered absolute…
Ripple Labs is thrilled to have signed its first two U.S. banks to use the Ripple protocol for real-time, cross-border payments.
Cross River Bank, an independent transaction bank based in New Jersey, and CBW Bank, a century-old institution founded in Kansas, join Fidor Bank on the Ripple network, which continues to grow.
Both banks are excited to leverage the technology in order to provide greater efficiency and innovation to their customers.
“Our business customers expect banking to move at the speed of the Web, but with the security and confidence of the traditional financial system,” said Gilles Gade, president and CEO of Cross River Bank.
“Ripple will help make that a reality, enabling our customers to instantly transfer funds internationally while meeting all compliance requirements and payments rules. We are excited to be amongst the very first banks in the U.S. to deploy Ripple as a faster, more affordable and compliant payment rail for our customers.”
“Today’s banks offer the equivalent of 300-year-old paper ledgers converted to an electronic form – a digital skin on an antiquated transaction process,” said Suresh Ramamurthi, chairman and CTO of CBW Bank.
“Ripple addresses the structural problem of payments as IP-based settlement infrastructure that powers the exchange of any types of value. We’ll now be one of the first banks in the world to offer customers a reliable, compliant, safe and secure way to instantly send and receive money internationally. As part of our integration with Ripple, we are rolling out Yantra’s cross-border, transaction-specific compliance, risk-scoring, monitoring and risk management system.”
But these new partnerships aren’t just great for Cross River Bank and CBW Bank customers, it’s great for everyone in the U.S. and Europe by essentially opening up a corridor between ACH and SEPA. Any U.S. bank can now use Cross River or CBW Bank as a correspondent to move funds in real-time to any other institution in Europe via Germany-based Fidor.
The deals will also help expand liquidity and trade volume on the protocol and generally improve the network effects of the system—which will continue to make Ripple more attractive for both market makers and developers.
Ultimately, this announcement is the culmination of many months of hard work and further validation for the Ripple Labs vision. The most exciting part? This is only just the beginning.
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The Ripple protocol is a distributed exchange network that allows exchanges between any fiat currency as well digital currencies like bitcoins and ripples. Using this protocol, users in the U.S. can send dollars to places like Mexico, routing the transaction through the lowest-cost exchange path on the network, and have the payments converted into pesos and delivered into the recipient’s wallet in seconds. Platforms like Ripple and other cryptocurrency features can benefit everyday people in four primary areas: remittances, liquidity, access to cash and access to credit…
Howard Hinnnat, C++ mensch
The Ripple Labs employee spotlight is on Howard Hinnant this week, who is in Bellevue, Washington for cppcon, the inaugural conference for all things C++.
Howard has been a prolific and long-time contributor to the C++ community as lead author of several C++11 features including move semantics, unique_ptr, and <chrono> API and has authored over 30 C++ committee papers.
During his time at Apple he developed libc++, an open source implementation of the C++11 standard library, which the iPhone maker continues to use. He is also a Library Working Group Chair Emeritus at the Standard C++ Foundation.
Today, as a senior engineer within the 11-person Rippled team, Howard is channeling his self-taught expertise to help build the core protocols that will power what we see as the birth of the value web.
Rippled is the core, peer-to-peer server component of the Ripple protocol (which already includes a number of C++14 features). It essentially is Ripple—by facilitating the processes that manage and validate transactions.
Moving forward, the team’s priorities are stability, performance, security, and scalability—while introducing new features like m-of-n multisign, additional cryptographic curves, and autobridging, according to Rippled project manager Yana Novikova.
At cppcon, the former aerospace engineer will be presenting his latest paper, Types Don’t Know # (N3980). Before Howard left, I sat down with him and Vinnie Falco, team lead of Rippled, for a brief fireside chat.
Ripple Labs: So what’s up with cppcon?
Howard: This is the first year so it’s kind of an experiment, but I suspect it will be a success. It has the support of the leading professionals in the industry.
Vinnie: Cppcon is a very technical conference that focuses on the development and growth of the language itself. So a lot of the discussions and presentations will surround the technical aspects of the language and could very well be precursors to new features.
Ripple Labs: What will you be doing at the conference?
Howard: My contribution at this conference is going to be talking about the work we have been doing and implementing in Rippled, mainly the parts that concern how to hash things and putting items into unordered containers.
I’ve written a proposal for it, which I’ll be presenting. It hasn’t been accepted yet by the committee, but it’s under consideration at this time. This proposed implementation allows people to easily switch among different hash algorithms.
Vinnie: N3980 addresses a long-standing shortcoming in the hash functions for unordered containers, which can result in suboptimal performance when using a standard library. It basically allows programmers to easily choose between different hash functions such as Murmur, SipHash, SpookyHash, and FNV without changing every call site.
Howard: Now developers have a choice of hash functions without having to rewrite everything. You write the hashing infrastructure once, and with very little effort, you can switch between different algorithms, which wasn’t previously possible.
Vinnie: It’s very relevant to decentralized programs. The result of Howard’s work benefits anyone developing peer-to-peer software.
Howard: It has very wide applications because the hash containers are extremely widely used. You name it, people are hashing things. It’s quite a basic utility.
Vinnie: When it comes to digital finance, hash functions are crucial, along with the performance of these programs. Bitcoin, Ripple, and countless other systems use them.
Ripple Labs: What does it take for a proposal to get accepted by the committee.
Vinnie: Howard has had work accepted in the past, but it’s obviously not a walk in the park. This is serious, very theoretical work—and it needs to improve the language. It’s work so incredibly technical that very few people are even qualified to analyze it.
Having something approved that goes into the language—it can take years, maybe a decade. It’s a very small club.
Ripple Labs: So Howard, how did you get so good at C++?
Howard: I was self-taught. I’ve always been interested in programming, but I had only taken a couple courses in Fortran and assembly. I started collecting languages on my own. I taught myself C, Pascal, and Postscript.
Eventually, I picked up C++ and decided I really liked it, better than the other languages that I learned so I kept teaching myself about it.
Ripple Labs: What was so attractive about C++?
Howard: For me, I really like how you can program at a high level and in the same language, program at a low level. C++ offers complete control. It doesn’t require low level languages like C or assembly but still has high level facilities. It allows you to do everything.
Ripple Labs: OK, last question. What’s your favorite C++ feature?
Howard: The destructor. It’s the most elegant form of garbage collection I’ve ever seen.
Connections:
- Howard’s paper: Types Don’t Know # (N3980)
- Howard’s bio
- Howard at cppcon
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When it comes to financial inclusion, one of the central issues is identity. And while the popular image of those excluded from the global economy are of those struggling in developing or impoverished economies—say the migratory sherpa lacking a home address—the way our current system is set up means that financial exclusion can strike anyone.
Take my colleague who recently relocated to San Francisco. Despite a well-paying job and an exceptional credit history in Europe, he was unable to open a bank account or even lease an apartment because his identity was only valid in Europe.
Things clearly aren’t working when an educated expat earning a six-figure salary can’t set up a basic checking account. It’s no wonder then that 2.5 billion people in the world share the same problem.
Today, the reality is we don’t own or control our online identities. Instead, they reside in countless, redundant silos begrudgingly kept by service providers like retailers and financial institutions. Just as you can’t bring your eBay reputation to Yelp, you can’t import your credit history from Europe to the U.S.
In a recent interview with Kosta Peric, former Head of Innovation at SWIFT, he pointed to identity management as a key development challenge: “The second problem [related to online identity] is data silos… where my reputation on eBay is only valued on eBay and my Twitter followers are only relevant on Twitter. I have invested a lot of time and effort and money to build this up and now let’s say one of these companies goes away or is acquired or changes. All of that data—which I don’t call physical identity, I call it digital assets—how do I manage that for myself?”
Technology has incredible potential to address these obstacles. On the one hand, it provides opportunities for new and diverse identity platforms. Fidor, for instance, allows customers to open an account using their Facebook credentials. On the other hand, innovative solutions like decentralized identity will empower individuals to own their financial identities, while enhancing identity security.
For the financially underserved, the inability to track and control their identities precludes economic progress in many cases. With ownership of identity comes access to financial systems and opportunities that are just out of reach today.
Our chief compliance officer, Karen Gifford, is in Perth, Australia this week, discussing this very issue with some of the most forward-thinking minds in technology and economic development at events surrounding the G20 Summit.
The “Most Interesting Man in the World” prefers wine. He’s also a Brazilian Ripple gateway operator.
Going by the well-known marketing campaign, you might be inclined to believe that the Most-Interesting-Man-in-World is Mexican—given the beer that he drinks.
But I recently confirmed that he is indeed Brazilian. Rafael Olaio is the co-founder of Rippex, a newly launched Ripple gateway that services Brazilian residents. Rippex is “the fastest, cheapest way to buy Bitcoin in Brazil,” Olaio said, adding that it is still difficult and expensive for individuals there to acquire not only bitcoins but also diversified investments like gold and foreign currencies.
In the longer run, Olaio believes these developing technologies will further empower the people of Brazil by allowing them more control over their finances. It’s also an opportunity for merchants, who are known to pay north of 7 percent per transaction when accepting credit card payments while taxi drivers regularly pay 9 or 10 percent.
For the São Paulo native, arriving at this juncture has been a long and adventurous journey. Prior to dedicating himself full-time to his Ripple enterprise, Olaio was a doctor, having attended one of the most prestigious medical programs in Brazil. And before that, he was a videographer for an advertising firm.
The craziest part? He’s only 39, and he’s only just getting started.
Rafael: That’s kind of a choice. What is better? To live with having tried or having not tried? It’s not like it’s easy or comfortable to make these decisions—but not making it is also uncomfortable. So you are in a bad situation when you get passionate about one idea—in this case, it was Ripple.
Ripple Labs: OK, well let’s start from the beginning. How did you get into advertising?
Rafael: The advertising was a natural continuation of what I was doing in high school, where I already did some jobs in advertising, and I was responsible for creating a few campaigns with my colleagues. After working some years, I moved into video editing and producing videos.
Ripple Labs: Which is already pretty cool…
Rafael: But I felt something wasn’t right. Time is very precious. I was fighting for things I didn’t really believe in. I always use this example—this time when we were in a meeting for the latest campaign. We were using all our energy to figure out how to get people who didn’t have a need for batteries to buy more batteries. How would we create this need for people?
The idea we came up with was to give them radios. It just didn’t feel like we were adding real value for all this energy we were putting into these efforts. Of course, I was obeying someone else, a client or a boss. It was the value for me to pay my bills. But I still felt like I needed to do something about it. I felt like I needed something more.
Ripple Labs: So you became a doctor…
Rafael: I thought about it for some months, and medicine was the only thing that spoke to me more deeply. I just asked myself—what kind of thing should I do? When I thought about medicine, I felt, deep down, like the answer was a resounding “yes.”
After studying a year and a half, I got into university, a very good program here in Brazil, which took six years. After I finished school, I worked full-time for three years.
Ripple Labs: So you studied for six years, and then only worked full-time for half that time as a doctor…
Rafael: I’ll tell you why. You know, medicine is very interesting. It’s a very interesting subject—and dealing with people is very interesting. And it’s good for me as a person, I think.
But the economics for practicing quality medicine in Brazil can be very difficult. This got me interested in economics in general, and I began to study broad overviews of economics in my spare time. I got interested in security analysis—evaluating businesses and papers and commitments. This was all incredibly interesting, it really caught me. I read many books to discover how things work—essentially the rules and theory that define what moves the world.
What are the laws that rule these relationships between people and businesses and economies? There are many things that are not personal—things just happen. So studying economics led me to security analysis. It felt like there was a little bit of science there. And security analysis would lead me to Bitcoin.
Ripple Labs: How did you hear about Bitcoin?
Rafael: At the time, it was beginning to appear in the media. I was reading some news feed, and I saw an article about Bitcoin, this new currency. When I began to read, I realized that this would be the beginning of a great change in economics, in life in general. We had opened Pandora’s box. There was no going back now.
So then I chose Bitcoin to make some investments. I also did some trading, taking advantage of arbitrage opportunities between exchanges. This was around March last year.
Ripple Labs: Was it difficult acquiring bitcoins in Brazil at the time?
Rafael: It was very difficult, almost impossible. The only exchange that was working here was managed in a very amateur way. It was allegedly hacked—but many people accused the operator of stealing the bitcoins. And so there were no options here in Brazil to buy bitcoins—except for LocalBitcoins, which was very expensive.
If I recall correctly, I ended up managing to buy some bitcoins via BitInstant. I began sending them to MtGox and Bitstamp and moving the fiat money from one place to another to take advantage of trading opportunities. This was a common strategy at the time.
As it turned out, Bitstamp was a Ripple gateway, and that was how I found out about Ripple.
Ripple Labs: What was your initial impression?
Rafael: I thought it was a very good vision because it allowed people to issue other assets in the network. So many of the problems at the time that were inherent to the Bitcoin network would be solved—like moving fiat money. The fact that the transactions were confirmed in seconds was very very impressive.
Ripple Labs: So how did you go from Ripple newbie to bonafide Ripple entrepreneur?
Rafael: There were some existing business models at the time, like the gateway model, which I think is very important for the ecosystem. They’re like the roots of Ripple, connecting it to other existing networks.
So I thought about this for a while since it was very risky—based on a protocol that I wasn’t too familiar with yet and few people knew about at the time. There was also uncertainty surrounding regulations.
But the idea was interesting. It’s very innovative, and I think this technology will really change the financial system. You can’t put it aside—unless you invent something better. You just can’t ignore this.
Take Fidor, for example, the German bank that is implementing the Ripple protocol. It will spend less money and be more competitive. Then, if Fidor’s competitors don’t use Ripple or don’t have something similar, it will be harder for them to compete.
Regarding our business model for Rippex, I think the gateway or conversion service will become a commodity at some point—but it will be a commodity you can’t live without.
Ripple Labs: At what point did the idea become a reality?
Rafael: When I got the right team. I started talking to people about the idea, and many people thought it was interesting. Then I got one friend of mine to join, and then I met our developer and explained the project to him. I met with many developers, but he was the only one I invited to be a co-founder.
With the founding members rounded up, we created the principals of the company and divided our tasks. This was around October or November of last year.
Ripple Labs: It’s been quite some time building up to your launch. What have you been working on since then?
Rafael: There was a lot of preliminary work to do. We had to work out the math and the accounts, to calculate the risks, and figure out how much money and initial investment we would need.
So we did a lot of brainstorming and built out a model to start this project. As is generally the case, this model has already been changed many times along the way.
Ripple Labs: What sort of questions were you asking during these brainstorming sessions?
Rafael: We wanted to figure out how we can help people solve real problems in their day-to-day lives. Because why would someone use Ripple if they have their banks and credit cards, for example.
That’s why we decided to start by targeting Bitcoin traders—given the price premium of Bitcoin here in Brazil. They are already making a profit by making markets in the current environment. Our Ripple gateway will allow them to be faster, more competitive, and increase their margins.
Ripple Labs: What’s the Bitcoin market like in Brazil?
Rippex: The market here is small when compared to Europe or the US. But I’ve been talking to people here, and I think last month, one of the exchanges moved $ 1 million if you count only the fiat transactions. A year ago, that number was around $ 15,000—so we think the timing is good right now.
Ripple Labs: Do you think these developments will translate positively for average people in Brazil?
Rafael: This kind of economy will empower more people. Things are becoming more decentralized, peer-to-peer. This I think will help people have more control of their finances, and people will be more educated financially because they will assume more responsibilities.
The alternative people used to have was to keep money or gold at their homes and this is very risky. Banks help address that by diminishing those risks for people. But now you can have your assets kept offline in a cryptographic key that only you know. You can even split the secret up among different signers—there are many ways to deal with it.
And empowering people will create a demand for better regulations. Hopefully we will have a system that is more open because people will have options. In a way, this is positive for banks, which can provide different and better services to fulfill their customers’ needs. Maybe a Bitcoin fan will want to keep his or her bitcoins safe, but doesn’t want to personally assume all of the associated risks. So banks will be able to address some of these demands.
Ripple Labs: That’s a great point.
Rafael: The payments piece is also very important, and everyone can benefit from it, especially merchants. Right now users have their credit cards, but merchants in Brazil don’t always like for their users to use credit cards. It’s expensive and there are lots of risks, like chargebacks. Because of that, you only know for sure if you have received the money in 30 or 60 days after the purchase is first made. So this is more expensive and risky than just accepting a cash payment.
Here in Brazil, they have these point-of-sale machines for addressing this issue. Companies that provide these services will charge as much as 6 percent of the purchase price so that the merchant can get their money a bit earlier versus relying on Visa alone. They essentially form an intermediary credit operation, which adds to the cost of normal business. So in total, merchants are paying north of 6 or 7 percent to process transactions. For taxi drivers, this figure can reach 9 or 10 percent.
While this cost isn’t explicitly advertised in the price of goods, it increases costs for everyone, from the merchant to the consumer. In fact, consumers can easily discern these implicit costs because many merchants offer discounts for other payment options—like cash or something called “boleto”—which is a payment method commonly used here in Brazil. It’s similar to a bank transfer so it acts a bit like cash.
So you commonly see these price disparities with e-commerce. When you are purchasing a chair, there are two prices—one is for credit cards, the other is for boleto.
Ripple Labs: Are merchants in Brazil adopting Bitcoin? We’re seeing that here in the US with Dell and Overstock, for instance.
Rafael: There are people trying to implement payment solutions for Bitcoin here. But I don’t think BitPay or Coinbase are operating in Brazil.
Ripple Labs: Why do you think the crypto-movement hasn’t caught on as much in Brazil? Is it an issue of education and familiarity with the technology?
Rafael: I think education is part of it. If you are not a little technologically educated, this can all sound like something crazy.
Ripple Labs: And certainly, it doesn’t help that it’s still difficult to acquire bitcoins in Brazil. But you believe Rippex will help address this problem.
Rafael: Yes, we are converters. We want to remove that friction. We want to make it easier to put money inside and outside of the Ripple network.
The other thing is, here in Brazil, it’s kind of cumbersome for someone who doesn’t have a lot of money to diversify their investments. So it’s hard to buy gold and invest in foreign currencies. You have to have like a $ 5000 minimum to put in one fund for hedging USD, for example. Now, with just $ 500, you can buy USD, euros, and gold through the Ripple network.
Ripple Labs: One of the stumbling blocks in the US and other places is for new startups to secure a banking relationship because of how new these technologies are. Has that been a problem?
Rafael: It was very easy. I have three different accounts in three different banks. I repeated myself many times to be sure that they really understood.
Ripple Labs: Out of curiosity, how do you describe the technology—and maybe not just to banks but to the general public?
Rafael: I describe it the same was that [Ripple co-founder and CEO] Chris Larsen does. It’s the internet of value. I think it’s very important because there’s a lot of friction in moving money, and the main problem is trust.
Whenever you receive a bill, you have to make sure that it’s not counterfeit. Whenever you receive a bank transfer, you must be sure it will not be charged back. Whenever you receive a credit card payment, you have issues with not only chargebacks but also delayed transactions and high costs.
So this technology, Ripple, by solving the settlement part of transactions brings a lot of speed and removes a lot of risk and friction from the equation. These advantages ultimately benefit everyone.
Ripple Labs: OK, so I have to ask—what kind of beer do you drink?
Rafael: I like wine [laughing].
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Temenos only vendor to be named “Top global player” and “Global Power Seller” in banking platform sales by independent analyst firm
Survey from Forrester research shows that Temenos took considerable market share in 2013
The independent survey, conducted annually, assesses both the volume and the geographical spread of banking platform sales to new and existing customers. Forrester defines a banking platform as a “comprehensive, but basically modular, preintegrated set of banking applications that is designed to cover traditional areas of banking like retail and corporate banking.”[1] In 2013, Forrester evaluated more than 1,630 deals submitted by 29 vendors to arrive at its rankings for new name and extended business sales.
For the 9th consecutive year, Forrester awarded Temenos the highest status of “Global Power Seller” in its ranking of sales to new name customers. In order to be named a “Global Power Seller”, vendors must record more than 35 new name deals across more than six regions of the world. Temenos was the only vendor to achieve the status of “Global Power Seller”.
In addition, Temenos was also the only vendor to be awarded the status of “Top Global Player” in respect of sales to both new and existing customers, with 124 deals, 8% higher than in 2012. To qualify as “Top Global Player” vendors must evidence at least 75 customer sales in a minimum of six regions. This is the second year that Forrester has examined both new and existing sales and the second year that Temenos has been the sole recipient of the “Top Global Player” award. Interestingly in 2013, no vendor achieved the secondary status of “Major Global Player”, for which it must achieve more than 50 deals in three regions whereas in 2012, three vendors held this status.
During a webinar to announce the findings from the upcoming report, Jost Hoppermann, Vice President, Principal Analyst at Forrester noted:
“Positions on the market are changing. Overall, the market grew by 4% but the top 10 vendors’ share of deals fell by 12%. The best performers were able to leverage existing good customer relationships to take market share.”
David Arnott, CEO of Temenos, commented:
“We are delighted with the findings from this study, which underline the extent to which Temenos took market share in 2013, particularly against the largest vendors. We are the clear leader in banking platform sales with also the broadest geographical reach. This success owes to a broad set of solutions able to meet the banking industry’s needs for efficiency, agility, actionable analytics and cutting-edge multi-channel capabilities as it faces up to structural change in the form of changing customer behaviour, a changing competitive landscape and new regulation. We are confident we can consolidate further our leadership in 2014.”