What does a man who has achieved everything do with his life? Apparently, he starts a Ripple gateway.
Denis Kiselev, born and raised in Moscow, first earned a degree in computer science from Moscow State University. He’d then head stateside for an MA in economics at Ohio State, which would kick off “a long career in traditional financial services.”
After a few stints at the World Bank and various private sector companies, Kiselev became CEO for a community bank back in Moscow. “I then started an insurance company for one of the largest Russian financial groups,” he said. “I built it up from zero to being one of the top 5 insurance companies in the country.”
His countless successes would earn him a seat on the board of the country’s central bank. Responsible for banking supervision, Kiselev was instrumental in building up Russia’s version of the Federal Reserve—though he admits they “adopted the French model rather than the US.”
From Russia to Ripple
Denis: I understood the traditional financial system. I knew what was strong, what was weak, and what could be improved. We wanted to find something that would allow us to do something revolutionary in the space. When I was first introduced to [Ripple CEO] Chris Larsen by a friend of mine, I clearly recognized that this was something I was interested in. We spent a month evaluating the technology and decided to make the jump.
The resulting company, SnapSwap, became one of the first to build services on the Ripple protocol.
Denis: We launched our beta service in June. We were in limited beta for a while. Working with financial technologies, we have to be careful. First you need security; then you need reliability. If you have a bug in a mail system and the mail system is sending the same email two or three times, it’s not a big deal. But in a payment system, well, that’s a disaster.
Decentralized, global, and scalable
Denis: First of all, I saw that Ripple is really a peer-to-peer, decentralized payment network. It’s a network without a central administrator, something that can exist and process payments even if Ripple Labs disappeared from the face of the earth. Second, I found it really efficient across currencies, across borders, and with small-scale payments. There’s no comparison in traditional banking. Third, we had been working with game companies and game currencies prior to building on Ripple so we knew all the difficulties that game companies are facing when they are trying to accept payments from customers—especially international customers or small payments. We needed a solution for this kind of customer.
We looked at various technologies from the very beginning. We left aside all the technologies based on central administrators. Paypal is great, but everyone depends on the risk of the particular company. There aren’t a lot of variables on the market. It’s a complicated engineering task to build this kind of network beyond Bitcoin, the various derivatives, or Ripple. We went through the technical analysis to make sure the protocol had potential, that it was scalable, stable, and could handle real-time payments. We found that all the pieces were there.
Becoming a gateway
Denis: Imagine I’m a customer. I’ve heard about Ripple and I go to Ripple.com and create I wallet. I see that it’s nice and interesting and I want to play with it. But it’s like a wallet in your pocket; if it’s empty, it’s not very useful.
That was the immediate need: to have the possibility to connect the Ripple network with traditional payment methods, and that’s why we started building very simple, straightforward services to connect so-called gateways. In the long term, 5 to 10 years from now, gateways might not be that useful anymore if settlement is happening within the system. For now, to facilitate the adoption of the network, we’ve become the first U.S. gateway. We’re proud that customers trust us with their money.
Denis: Since our role is to build connections, we have to work with Ripple and we have to understand how to process payments in the network. We also have to know and operate with legacy systems. In the U.S., for example, there is ACH for processing payments for banks. There are credit cards and debit cards. Many banks create their own online payment systems. Sometimes they’re connected. Sometimes they’re fragmented.
Denis: We are doing the redesign in a classic way, bottom up, if you will. We start with customer interviews—even though we already have some basic ideas. We want to hear it from our customers. Before we start building, we have to know what we are going to build.
We know what the stumbling blocks are for our customers and what’s difficult to understand. We want to use this experience to create a more streamlined process and make it easy to use without having to read anything, to have a very intuitive process.
We would also like to convey the message of trust. More than anything, the objective is to provide a trustworthy service. People have to trust us with their money in order to access the network and we want to make sure they are comfortable. The environment as a whole should reinforce that message.
Words of wisdom
Denis: Ripple is a very rich environment and there are many kinds of services that could be built on top of the protocol. If someone is interested to build something useful and meaningful, I would advise them to take a broader look to see what kind of operations need to be built. People need to find their own stories.
It’s very easy to cooperate with other players in the ecosystem with other gateways and with other service providers. For instance, we’re making our API available to other developers to use other services to top off their wallets. Redundant services are good because it makes the network stable, but in the early days, we also need a diverse ecosystem of services.
There’s a need for information services. It’s not that easy to find out the exchange rates or volumes of the various networks. Much of the information is out there on the public ledger, but it’s not straightforward to extract and present in a useful form. Mobile applications will make it easier to check payments, markets, and your wallet status. We also need more professional software for people interested in trading. Its the perfect currency trading environment and there is a whole family of applications and services that surround people who do stock or FX trading, like Etrade.
And since it’s financial services and you work with people’s money, you have to carefully look at the issues of compliance and regulations. You can’t build a sustainable business if you don’t follow compliance.
The end game
Denis: With a network like Ripple available for people globally to sell products and send money at almost no cost—that will change the world economy. It will give people access. They will be able to get jobs and get paid. They will be able to sell goods and services without having to worry about distances, currencies, and the working hours of particular banks. It will make the world much more connected like email did for information. It really is a revolution.