BC Business
Chris Larsen, OpenCoin | BCBusinessChris Larsen, CEO and co-founder of OpenCoin, will speak about his digital currency at the GROW Conference in August.
Chris Larsen wants to do for money what the Internet did for information: enable it to flow freely around the world, unimpeded by barriers or borders of any kind, whether physical, political or commercial. The CEO and co-founder of OpenCoin Inc. believes his digital transaction network, Ripple, will make it possible to instantly purchase a box of widgets from a manufacturer in Guangzhou without spending a penny in transaction fees. The key is a new digital currency, similar to the hotly debated Bitcoin. Needless to say, when a two-year-old Silicon Valley startup decides it’s going to invent its own global virtual money for the sake of facilitating frictionless transactions, it can get complicated. If you want to really understand how Ripple works, you should take in his presentation at this year’s GROW Conference. But here’s the abridged version: OpenCoin is building a distributed peer-to-peer network of servers that validate transactions. These servers aren’t controlled by OpenCoin; the architecture is modelled on that of the Internet itself. Users transfer money in whatever old-fashioned paper currency they like into a Ripple online wallet via a traditional third-party bank transfer service. The Ripple wallet may contain balances in multiple different currencies, including Bitcoins and Ripples (XRP). That’s not the fun part, though. Ripple has its own internal FOREX-style currency exchange for determining the price of an XRP. Individual traders act as market-makers, but they’re not just gambling on the fate of the yen like DeLillo’s protagonist in Cosmopolis, they’re also connecting nodes in the network. You may not be able to buy your widgets in dollars, but via these traders, dollars can become XRP and XRP can become Yuan—instantly and without cost. The potentially transformative promise of a world of instant, free transactions across any border may be enough to motivate an anti-capitalist or a techno-utopian, but Larsen is running a business. How does OpenCoin make money? Well, the advantage of inventing your own currency is that you can give yourself some—or a lot. OpenCoin created 100 billion XRP and have promised that no more will ever exist. The company plans to ultimately give itself approximately 25 per cent of the total supply of XRP. Ripple is, of course, not without its controversies and detractors. They’ve promised to make the server code open-source, but haven’t yet. Larsen says it’s not ready to face the scrutiny of the coder community yet. There are other concerns, too, as a quick Google search reveals. But how could a for-profit effort to upend the global monetary system not be? Whether you’re suspicious or just excited about your widget-procurement process improving, you should be at the Convention Centre for GROW on August 15th.