As a seasoned researcher with a keen interest in blockchain technology and digital assets, I find David Schwartz’s insights particularly insightful. Given my background, it is evident that building a truly decentralized digital asset backed by gold presents substantial challenges, as he rightly points out.
David Schwartz, the Chief Technology Officer at Ripple, expressed his thoughts on the feasibility of constructing a decentralized digital currency tied to gold.
Aside from being Ripple’s CTO, Schwartz was among those who created XRP Ledger and XRP tokens.
Decentralized gold-backed crypto? “It’s really hard to do”
A person using the X application inquired from David Schwartz if it was feasible to develop a financial asset tied to gold and maintain its decentralization. In response, the Chief Technology Officer of Ripple expressed his enthusiasm, stating that “achieving this can be quite challenging.”
Schwartz proposes that instead of tying a cryptocurrency directly to gold, it might be feasible to link it to gold through a pegging system. If implemented this way, the crypto asset would essentially be collateralized with tokens rather than gold itself. Therefore, it wouldn’t technically be backed by gold but more akin to an algorithmic stablecoin. He uses DAI tied to the value of gold as an illustrative example.
As a seasoned investor with over two decades of experience in the financial markets, I have seen countless cryptocurrencies come and go. One thing that has always intrigued me is the concept of stablecoins – digital assets designed to maintain a stable value against a traditional currency or commodity like gold.
— David “JoelKatz” Schwartz (@JoelKatz) August 8, 2024
To really tie a cryptocurrency to gold, as Schwartz explained, the inventor must discover a method to decentralize this linkage. This means one of the partners should hold the gold and the gold needs to be stored in a place governed by some legal jurisdiction that could potentially seize it. During this discussion, the Ripple CTO questioned the importance of having gold in this scenario, but the other party failed to respond, resulting in the conversation remaining unresolved.
Ripple celebrates major victory against SEC
As a seasoned legal observer with years of experience in following financial industry cases, I am thrilled to share my perspective on the recent court decision involving Ripple and the Securities and Exchange Commission (SEC). Having watched numerous similar battles unfold, I must admit that this latest development is particularly intriguing.
In the end, a court ruling required Ripple to pay $125 million rather than the initially proposed $2 billion. At first, the Ripple team had suggested paying $10 million, but they ultimately accepted the court’s decision.
In my role as an analyst, I’d like to highlight a significant comment from Ripple co-founder Chris Larsen regarding a pivotal event for our company. He took to Twitter, stating “The relentless SEC campaign against us has finally ended.” Furthermore, he expressed optimism that the ongoing regulatory battle between U.S. authorities and the cryptocurrency sector might also be drawing to a close. Yesterday, the XRP price surged by an impressive 25% following this announcement.
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2024-08-09 15:05