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1. XRP Is Not Needed

Ripple offers two main products for cross border payments: xCurrent and xRapid. The longest available product, and also the most adopted product, is xCurrent.

xCurrent is a global real-time gross settlement system that enables participants to message, clear and settle transactions; and the speed of settlement is disrupting the existing solutions on the market, such as SWIFT with which a payment settles in a few days on average.

This disruption, and the praises from customers, is often interpreted to be “enough”. When settlement can happen in seconds without XRP, why would it be used at all? Because it is cheaper and faster to settle payments with XRP than FIAT/FIAT exchange pairs.

If two banks have made nostro/vostro arrangements, xCurrent can change balances on both ends in seconds. And since xCurrent is built on top of the Interledger protocol, they can exchange FX rates in real time.

According to Ripple, it is expensive and unsustainable for most organisations to maintain nostro accounts:

According to a 2016 McKinsey Global Payments report, there is approximately $5 trillion dollars sitting dormant in these (red: nostro) accounts around the world — tying up capital that could be used in more productive ways. They also must be actively managed to ensure balances are commensurate with transaction volume.

The cost and complexity of holding these accounts around the world is one reason why only a handful of banks can process global transactions. The burden of maintaining nostro accounts worldwide is simply unsustainable for most organizations. Small-to-mid-size banks and payment providers instead pay a fee to use the international transaction systems of their larger brethren.Ripple Insights

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xRapid is made to eliminate the need for these accounts. Instead, it sources liquidity from the market, buying XRP for FIAT at one end of the payment, only to sell it for FIAT at the other end. This technology opens several new opportunities:

  • further savings on payments, allowing for even smaller international payments with minimal fees
  • sending funds in otherwise illiquid or very expensive corridors (aka. exotic corridors)
  • opening the market for new businesses, eliminating the need to establish nostro/vostro accounts and compete with established players from day one

Furthermore, Ripple’s products are not a “one or the other”-type solution, as xRapid can be used with both the “standard access”-product, xVia, and the “full access”-product, xCurrent:

Both access levels have the ability to settle transactions instantly through XRP, a digital asset, used in Ripple’s xRapid product. Eliminate pre-funding in foreign accounts and send payments 24/7 using XRPripple.com

This is known as the Clever Hands test and it has been used in previous experiments that have shown that people are unable to switch off their unconscious motivation for answering the trivia questions correctly.

Truly answering the questions at random would logically give an accuracy rate of around 50% for “yes” or “no” questions but that is not seen in the results of these trials.

Dr Vince Polito, a co-author of the study from CCD, told BuzzFeed News that people are unable to switch off their automatic response mechanism even when motivated by money or placed under time constraints.

“You know you’re in love when you can’t fall asleep because
reality is finally better than your dreams.”

The researchers found that hypnotising participants successfully inhibited their automatic tendency to correctly answer the easy questions.

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This successful response to the Clever Hands test highlights a potential for hypnosis in “treating addictions or compulsive behaviours, where people don’t feel like they’re able to inhibit very ingrained responses”, said Polito.

One 2002 study demonstrated that by hypnotising participants and suggesting that the language that appears on a screen is foreign and they are unable to understand it, the Stroop effect is overcome and participants will correctly name the font colour.

However, while Polito states that there is a general consensus in the hypnosis field that this experiment gave true results, there are some controversies attached to the Stroop effect study, with some failures to replicate its results.

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The ability to be hypnotised (hypnotisability) varies across the population.
Approximately 10-15% of people are known as “high hypnotisable” and they will experience alterations in perception, cognition, memory and action while under hypnosis. Another 10-15% are “low hypnotisable” and these are people who experience almost nothing in response to suggestion.

McAuley believes that the most important component in regulating the hypnotism market would be transparency for consumers.

“What I would like to know if I went to see somebody is what training they’ve had. Whether there’s a regulatory body that oversees that [is not of concern] but I’d like to at least know where they were trained and what sort of training they’ve had.”

Polito’s greatest concern with Australia’s lack of hypnosis regulation is that this may undermine the benefits of the practice that science is uncovering.

“It’s concerning as a scientist studying hypnosis thinking ‘This is an important and interesting phenomenon‘. The kind of negative associations around hypnosis make it harder to have this work taken more seriously.”

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