Why did B1X chose the XRP Ledger?
In our previous publication, we identified and addressed the monetary incentive schemes that have dominated the Web over the course of the last couple of years, and that have derived in one of the main sources of dysfunction that are currently affecting the Internet.
Like-wise, we described how the Internet protocol shares many fundamental principles with the major live public blockchains, including, among others:
- Censorship resistance,
- Accessibility, and
B1X believes that those very principles have been, by far, the most important drivers for the global adoption of the Internet. In other words, the less censored, the more open, the cheaper, the more neutral and the more democratic a network is, the more user scalability exigencies it will have overtime.
The Internet usability grew exponentially thanks to its inherent openness and decentralized functionalities, which quickly draw the attention of many institutional players who saw in it a very powerful tool for their respective businesses. Moreover, they found that they could easily leverage the gigantic Internet’s user base to improve their existing revenue streams or to create new ones that were previously used to be seen as unfeasible.
Soon enough, the absence of a decentralized built-in monetization mechanism, urged the emergence of centralized revenue creation “solutions”, that finally enabled the monetization of very specific and limited types of use-cases.
Those who read our previous post will know by now, that those temporary and flawed “solutions” evolved to what is known today as walled subscription schemes and clickbait advertising, which in our opinion, attempt against the integrity of the Internet’s core foundational principles.
These centralized alternatives not only failed to create a proper solution for the monetization problem itself, but they created perverse incentives to take value away from those who gave it to the Internet in the first place.
In the search for a proper monetization alternative for the Web, at B1X, we knew that something with very similar functionalities to those of the Internet itself needed to be found. This is how we found the XRP Ledger created by Arthur Britto, David Schwartz and Jed McCaleb.
After reviewing the XRP Ledger, we found out it was very similar to the Internet protocol in many ways: it is decentralized, resistant to censorship, universal, accessible, very cost-efficient, neutral, and most importantly, it is highly scalable.
Additionally, we discovered that the XRP Ledger had a series of features that allowed an easy implementation of the plans that we had in mind for our project. In the following sections, we will briefly review some of those functionalities.
Proof-of-Work vs. XRP Ledger Consensus.
When you are trying to find a solution for the Internet, you have to have in mind that you are trying to find a solution for, at least, 4.4 billion users. The Internet scalability requirements are probably the hardest to meet, naturally, and the utilization of heavy protocols based on inefficient processes, such as proof-of-work (PoW), tend to be automatically shelved due to its scalability restrictions.
Below, please find below an oversimplified comparison of the scalability of the XRP Ledger versus other major public blockchains: here
Such scalability capabilities are a consequence or replacing the dated PoW consensus mechanism with a much more efficient, green, cheap, censorship-resistant and modern consensus mechanism: the XRP Ledger Consensus Protocol (XRP LCP).
The adoption of the XRP LCP, allowed the XRP Ledger to sidestep the high costs associated with PoW mining, while maintaining a very secure, stable and enterprise-ready consensus architecture capable to resist Sybil attacks and to avoid double spending.
In addition to the aforementioned considerations, there is another point of comparison where the XRP Ledger overcomes the available capabilities of the other production-ready major blockchains: payment settlement times.
After reviewing these comparisons and noticing the scalability capabilities of the XRP Ledger, B1X had no other choice but to scrap the possibility of using other production-ready blockchains, such as Bitcoin and Ethereum.
In case you are interested in learning more about how XRP Ledger’s decentralization is compared against Bitcoin’s or Ethereum’s, do not miss this article authored by David Schwartz himself: “The Inherently Decentralized Nature of the XRP Ledger”.
XRP Ledger has a built-in Decentralized Exchange.
The XRP Ledger went live many years ago with the World’s first Decentralized Exchange (DEX), when they were not even cool yet.
The above was possible as a consequence of integrating a very forward-thinking feature: the ability to issue currencies other than XRP over the XRP ledger, also referred to as “issuances” or “IOUs”.
Such issued currencies are tracked in accounting relationships, called "trust lines," between addresses. IOUs are typically considered as liabilities from one perspective and assets from the other, so the balance of a trust line is negative or positive depending on which side you view it from.
As a matter of fact, XRP Ledger IOUs are able to represent any kind of asset, including fiat currencies, cryptocurrencies, securities, commodities, videogame tokens, you name it. It is all reduced to a matter of trusting that the entity who is issuing those IOUs (Gateways) is a good and transparent custodian of the underlying assets.
Issued currencies can be traded with XRP or with each other in the XRP Ledger's DEX, users are able to place buying and selling offers in order to trade their assets in a completely decentralized manner.
At B1X, we believe in technology agnosticism, and that is why the ability to issue IOUs on the XRP Ledger, was another of the main features that led us to choose this blockchain for the purposes of building our project. This feature, for example, would allow us to create monetization mechanisms where users would not only be able to exchange or pay with XRP, but also with BTC, ETH, USD, JPY, and every other currency or asset you may think of.
Possibility to create Escrows
Escrows are feature of the XRP Ledger that allow participants to create conditional XRP payments, this is, to lock-up certain amounts of XRP and released them later, when certain pre-defined conditions are fulfilled. Conditions to successfully finish an escrow include time-based unlocks and crypto-conditions.
It is very important to mention that no one is able use the XRP until the relevant escrow has been successfully finished or canceled. Before the expiration time, only the intended receiver can get the XRP. After the expiration time, the XRP can only be returned to the sender.
Additionally, the escrow feature makes the XRP Ledger ideal for bridging multi-hop payments using the Interledger Protocol, which requires of funds committing in order to reduce value routing risks and to increase payments’ safety and reliability.
The ability to integrate our project with the Interledger Protocol, will potentially allow us to implement decentralized mechanisms for non-custodial streaming payments and micro-payments, which are already on-track to change the payments industry forever.
All of the above functionalities, made the XRP Ledger the most suitable public blockchain for the use-cases that we wanted to build into our project, and that is why we made the final decision to build on top of it.
If you read our first publication, you might already know that prior to the launch of our platform, we will be posting different articles in the coming days, with the intention to explain our project from different perspectives.
Thank you for reading this article and don’t forget to follow us in case you want to stay up to date on B1X developments.