Ripple CTO Discusses XRP Valuation Within Private and Public Ledgers

Crypto proponent Lord XRP recently emphasized the clarity and factual approach taken by David Schwartz, Chief Technology Officer of Ripple.

In a tweet, Lord XRP expressed appreciation for Schwartz’s straightforward communication style, highlighting his ability to discuss XRP without emotional opinion and strictly based on facts. Lord XRP reinforced his belief that XRP is set to play a pivotal role in the emerging financial system.

The tweet included a video clip from an interview featuring David Schwartz, where the Ripple CTO provided in-depth commentary on the value of XRP, particularly addressing questions related to its valuation within private ledgers compared to the public XRP Ledger.

David Schwartz Explains XRP’s Consistent Value Proposition

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In the video, Schwartz was asked whether the value of XRP would be the same on private ledgers as it is on the public XRP Ledger. Schwartz responded affirmatively, making it clear that XRP’s value remains consistent regardless of the environment it is used in. He explained that the fundamental value proposition of XRP lies in its global liquidity pools, which are designed to function without artificial barriers or price discrepancies.

He emphasized that it does not make sense for XRP to have different valuations in different environments because the mechanisms of arbitrage naturally eliminate such disparities. Schwartz drew a parallel to gold, explaining that there is no place where gold is worth twice as much as it is elsewhere. If such a situation were to arise, market participants would simply buy gold where it is cheaper and sell it where it is more expensive, balancing the price difference.

Arbitrage Mechanisms Prevent Price Disparities

Schwartz elaborated that unless there is significant friction, such as regulatory barriers or capital controls, the value of an asset like XRP should remain uniform globally. He mentioned that if friction does exist, it often creates business opportunities for those who can eliminate it. In his view, any scenario where XRP holds a significantly different value in one environment compared to another indicates a malfunction or an unusual market condition.

He referenced a real-world example known as the “kimchi premium,” a situation where the price of XRP in certain Asian countries was temporarily higher due to capital controls. Schwartz clarified that such instances do not reflect a healthy market dynamic but rather indicate that something is not functioning correctly within that market.

XRP’s Global Usability as the Core Value

Schwartz further explained that the entire value proposition of XRP is its global usability and accessibility. Using another analogy, he stated that if someone were to sell gold that could only be used for a specific purpose, such as jewelry, it would significantly diminish its value. Likewise, if XRP were restricted to certain environments, it would undermine the core purpose it serves in the financial ecosystem.

He concluded by affirming that XRP’s value is inherently tied to its borderless nature, which allows it to serve as a universal bridge asset without fragmentation. This characteristic is central to XRP’s role in the evolving financial system.

Lord XRP Reinforces XRP’s Role in the Future

In his tweet, Lord XRP reiterated his strong belief that XRP is poised to play an integral role in the new financial system. He commended Schwartz for delivering a message based purely on factual analysis and logical reasoning, free from speculation or emotional influence.

According to Lord XRP, the clarity provided by Schwartz further strengthens the case for XRP’s significance as a core component in the next generation of financial infrastructure.

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