Monica: Hi, welcome to Ripple HQ. I’m here with Brad Garlinghouse, our CEO. I’m Monica Long, VP of Marketing, and we’re here for our live end-of-year Q&A. Thank you so much for submitting your questions on Twitter. We’re going to go through some of them now. We’re going to do these Q&As more frequently and more often so that we have more of a direct line for you guys to ask us questions. In fact, next Thursday, please tune in December 21st at 12:45 pm Pacific for a Q&A with David Schwartz, our Chief Cryptographer.
Brad: AKA Joel Katz.
Monica: Joel Katz, yeah. And it’s XRP Ledger’s five-year anniversary, so it should be a really exciting one. OK, shall we get to it?
Brad: Thanks for having me.
Monica: Well, thanks for being here Brad. I have to start with, this week has been a notable week for XRP.
Brad: For sure.
Monica: Roger asked us, “What do you attribute the huge jump in price for XRP and all market cap jump to over the last three days — especially when the XRP price had been hanging between $0.20 and $0.25 for quite a while?”
Brad: It’s a great question. You know, look, I think it’s always hard to pinpoint exactly what sparks any market rally in XRP as well as other digital assets. I think, for me, Ripple has remained focused on how do we make the XRP ecosystem as successful as possible. Certainly, driving more real utility. One of the things I’ve been fond of saying is, “At the end of the day, digital assets and the value of digital assets will be driven by the utility that they create.” The more customers we see using them, the more production dynamics we see, the better.
I think it’s also clear that one of the things that happened is we have done, I think, a better job at really articulating and comparing the performance of XRP from a technical point of view, as compared to other digital assets. So, earlier this week, we did, frankly, kind of a simple chart summarizing some of the stuff we’ve been saying for a while, which showed how XRP performed compared to a number of other digital assets on both price per transaction, throughput, you know XRP can do 1,500 transactions per second, as well as the transaction time, the speed to confirm a transaction. And on all of those metrics, XRP performs incredibly well. And, so, when you look at that and you apply it to a really big market around global payments, you’re talking about a multi-trillion-dollar market, we have real customers solving a real problem. And I think increasingly, frankly, we’ve done a better job at helping the markets understand those dynamics, particularly in light of some of the challenges of other digital assets scaling to solve some of these big problems.
Monica: Yeah, that’s right. This is a good one. I’m paraphrasing here, but, “you guys at Ripple must be rich now so why do you still come to work?”
Brad: You know, when I think about this… when I get up in the morning, I have no trouble getting excited about coming to work. I think what is going on for Ripple, what’s going on in the digital assets marketplace, we’re just getting started. We’re in the early innings. I was fortunate to move out to Silicon Valley in 1997, in the earliest days of the internet, the internet of information. And I look at what Ripple’s vision is, enabling an internet of value, and I feel I’m incredibly excited by the progress we made in 2017. We even had an all-hands earlier today talking about the progress we’ve made in cross-border payments — that’s just one piece of that internet of value puzzle. And I look at the years ahead and I can see many, many years of growth in the core of what we’re doing as well as other vertical opportunities. So, I love the journey we’re on. I love the community that’s on the journey with us. And I think it’s just a ton of fun. The last thing I’ll say, and not just because you’re sitting here, is we have an amazing team here and it’s really fun to work with a bunch of great people.
Monica: It is fun. In that all-hands, one of the team members shouted out, “There’s nothing I’d rather be doing.” And there was a round of applause for that. So, we’re psyched to be here. Colt asks, and I hear this a lot, “Will Ripple be on Coinbase, and if so, do you have any idea when? Thanks. #XRP.” Thanks for the hashtag. Appreciate that.
Brad: So, a couple of thoughts on this. The first thing I want the entire community to understand is XRP liquidity is a critical priority to the success of the business. Period. Full stop. When you think about what we’re trying to do, if we don’t have good liquidity between fiat and XRP and I mean that on a global basis, then it’s going to be hard for us to be successful. The good news is we have had good liquidity and a lot of those payers, so today XRP is listed on around 50 exchanges around the world. Clearly, we want XRP to be listed in more exchanges that are reputable and regulated in those appropriate markets. So, it’s a very high priority for us to be listed more broadly. But we’re going to continue to work on that with partners around the globe. But we also don’t make announcements until we’re ready to make those announcements with those partners. I said that when we did this event [Swell in Toronto] and that remains the case for lots of different customers. Some we’re working with today and we’re not ready to make announcements, others that we’re talking to and evaluating how we could work together.
Monica: OK, T+Zero, who Tweets a lot about Ripple and XRP, so thank you TplusZero. He asks, “What are your top three priorities for 2018?”
Brad: Great question. The first segment, kind of top priority, we need more active nodes and when I talk about nodes, in this case, I’m thinking about financial institutions doing more volume. So, we now have over 100 active customers that we’ve talked about publically. We’re getting more both traditional banks, as well as financial payment providers. We’ve talked about getting more active users, getting more volume would be a top priority for sure. Let’s be honest: There’s a lot of hype around blockchain. There are a lot of experiments around blockchain. And, I think that, for us, we stand apart in that we have real customers, real volume. We want to keep that going and even accelerate it. There are tremendous network effects that happen as you know well. Live today, one bank that talked publically about some of the volume that they’re doing is one of the largest banks in Sweden — SEB. They have moved hundreds of millions of dollars just in the last few months between Sweden and New York. And that’s one corridor, one bank. So as that bank adds other corridors, as more banks go live, you get kind of an exponential growth in volume. So priority one is definitely around volume.
Priority two, I would say is XRP liquidity. Making sure that on a global basis, as we continue working with exchanges globally and market makers. Making sure we’re doing everything we can to make the XRP ecosystem successful around a liquidity basis. Priority three, which, admittedly is kind of a newer priority and something we’ll work on more in, is investing in other use cases for the XRP ledgers. We have been successful in part because we have been very focused on solving a specific problem. Understanding that customer, driving a solution that works and that’s really been on payments, and strictly across-border payments. There are other use cases. We’ve demonstrated and shown that XRP from a performance point-of-view compares very favorably to other digital assets. And I think that we’ll certainly partner with, invest in other use cases that can be built upon the XRP Ledger.
Monica: Very cool. Question about escrow, which happened recently, “How do you think the escrow will help us small investors?”
Brad: I think the most important thing around the escrow is really providing predictable supply. And, so, having the entire ecosystem, the XRP ecosystem, understand what is the supply. There’s no doubt in my mind over the last five years, I think, Ripple has demonstrated we are the most interested party in a healthy XRP ecosystem. I think our actions have demonstrated that we have acted in a way that is appropriate for the ecosystem and that is fostering good things. But we did hear from the community, well, wait a minute, there’s still always this overhang. So, we said, you know what, we want to remove that perception there’s a risk there. So, we took the step of, and we announced this last spring, the market reacted well to that and we finalized that very recently, where we locked up 55 billion escrow. That escrow will be 55 months, where each month a billion is unlocked and can be used. Certainly, we won’t use most of it. And, we will look at adding 56 months and 57 months, and kind of roll those others. We want to make sure that the ecosystem has a predictable supply and they understand what’s happening.
Monica: Toward that end, we also release a quarterly report about XRP markets.
Brad: Great point.
Monica: I encourage you to read that. That’s on ripple.com. We get a lot of questions about decentralization of the XRP Ledger. Any comments that you would want to make about that?
Brad: That is certainly, and I actually maybe what I’ll do is give another plug for our friend David Schwartz.
Monica: [Laughs.] Good call.
Brad: David Schwartz is doing this live stream on the 21st, next Thursday. He has publically said that his number one priority in 2018 is increase the decentralization of the XRP Ledger. There’s obviously a lot of things we have done already, and I think there are some misunderstandings out there about that, those points. On the other hand, Ripple as a company will continue to invest in the XRP Ledger and we will do that as a centralized group. But make no mistake about it, XRP Ledger is a decentralized ledger today and we will continue to invest to make sure it is even more decentralized in the future.
Monica: In terms of validators. So, this question comes from cryptfx: “What do you think the most critical achievement of Ripple and XRP was this year?”
Brad: I think the most critical demonstrated success… it really goes back to real customers. Even for Ripple, we’ve been at this for a while and focused on a clear customer. But going from tests and proof of concepts to real production to real volume, moving real money. Those are huge milestones. And we now obviously have talked about having over 100 customers and not just tests, you know, this is real money. The thing I’m really proud of on that front is, had you told me a year ago now we’d be this far along. And there really are powerful network effects that happen. The more nodes you have, the value of the network grows exponentially with the number of nodes on the network.
Monica: Cool. Actually, so, speaking of David. This question is from avenue and he asks, “How awesome is Joel Katz in person?” I will say he’s very awesome. He’s more awesome than you’d even think he is.
Brad: I’ll tell you one funny story on this front. So, unbeknownst to me, I go to the Warriors games sometimes here in San Francisco, and unbeknownst to me, Joel Katz, aka David Schwartz, it’s funny to call him Joel Katz. Anyway, David Schwartz is a Warriors fan and so I bumped into him actually twice, just totally randomly walking around. And what always strikes me is, here’s David Schwartz walking around the Warriors game and he walks by people and they have no idea here’s one of the most important people in cryptography. One of the most important people in Blockchain. One of the most important people in the crypto markets. I mean, he is the Steph Curry of digital assets. He is the Steph Curry of that whole… anyway, people walk by they have no idea. And he’s such a humble guy but obviously brilliant and frankly, Ripple is incredibly lucky to have him.
Monica: Yeah, he’s for sure a VIP. So, I will use this opportunity to remind you to come tune in again next Thursday, December 21st, at 12:45pm Pacific. Stuart asks, “Where do you see this company in 10 years?” That’s exciting.
Brad: Yeah, so as I said in terms of what gets me out of bed, you know, that question earlier. Even before I took over as CEO, Chris Larsen, as one of the founders of the company has really, from the earliest days, talked about this internet of value. And when I think about that, that is, it’s not just a 5-year journey, that’s a 10-year journey, that’s a 20-year journey. You know, we’re 20-ish years into the internet of information or 25 years into the internet of information, and I think we’re on that same long journey with the internet of value. And, you know, I have said on a couple of occasions that I see where Ripple is today with payments analogous to where Amazon was with books. The name of Amazon in 1997 was not Amazon. It was Amazon Books. They were a bookseller. And they were a fabulous, fantastic bookseller. And obviously, Amazon has demonstrated that by building some really robust core infrastructure they’re able to expand to do other things. And certainly, while I’m incredibly pleased with what we’re doing in payments and that’s a massive opportunity, we have aspirations, over certainly a 10-year arc of time, to do other things also.
Monica: Cool. Well, so, that’s all that I have for questions, but anything you want to say to the people tuning in?
Brad: Well, I guess I’ll conclude by saying that when I look back at 2017, we’re not quite at the end of the year yet, but when I look back on 2017 I feel like it really has been the year of crypto. It’s unbelievable how much this marketplace has evolved. And I think it will continue obviously to evolve in 2018. And as we demonstrate more and more utility, that’ll demonstrate more and more customers and more and more volume. It’s also worth noting, I think, as we get to the end of the year, in the year of crypto, XRP, the appreciation of XRP, has exceeded every other crypto period. We’re up around 12,000 percent, a 120X for the year. And I think that’s because we have been focused on solving a real problem, a very large problem. Driving scale from customers around that and having a technology underline that that is by far the most efficient. So, I certainly think we’ve got a long way to go in 2018. We’ve got an incredible pipeline, but it’s also nice to just take a moment to reflect on how good 2017 was.
Monica: Great. Thank you so much, Brad. Thank you for tuning in, everyone. Also, heartfelt thank you to everyone who has supported Ripple and XRP, especially through the years. We really appreciate it. And you can look forward to having the opportunity to ask more questions in the future. Thank you.
Brad: Thanks, everybody.