Getting Started: What is The World Exchange?

What is The World Exchange?

A free, open exchange* where anything can be traded, issued, and sent anywhere in real time.

     Imagine being able to send money, credit, assets - any form of ownership or value - to anyone anywhere in the world in mere seconds. Then imagine being able to trade or bid on those same items online with anyone else in the world. And finally imagine being able to actually issue your own symbols as well to represent anything you can think of - and then let people send or trade that just as openly as they trade anything else, its value determined completely by the free market. That's what The World Exchange is, and it does this by using the Ripple protocol.

Near-Instantaneous, Auditable Transactions and Settlements

     Say goodbye to ACH, bank wires, SWIFT, T+2 settlement, and other slow 20th century financial technologies. Money and virtually any other asset can now be sent almost instantaneously anywhere in the world, and unlike Bitcoin or other Blockchain-based technologies, you never have to deal with any currency other than the one you're using. Everything is automatically and seamlessly converted in between without anyone ever having to see it. Once received, the person can then just as quickly trade or convert it to any other form of value - other currencies, equity, debt - everything of value is represented the same way. Instead of just using USD to buy a symbol XYZ, you can now directly buy XYZ with another asset ABC. All the liquidity and conversion is done behind the scenes so that all markets for every symbol out there is essentially on one global, interconnected orderbook. You can essentially now send and trade pure value in near real-time. Best of all, everything is automatically recorded and auditable with no work on your end.

Issue Symbols to Represent Any Form of Value or Ownership

     Near-instant transactions are amazing but only the tip of the iceberg. You can do so much more than just send or trade quickly. You can also create your own symbols to represent anything you can think of. It is not just a payments or settlement protocol. Everyone can now be their own broker, exchange, custodian, banker, accountant, auditor - the whole process of any financial institution is do-able by anyone online at the click of a mouse. By using the Issue button, you can create symbols to:

  • Represent your company, its shares, or debt - aka, an IPO or ITO or bond offering.
  • Fundraise for an idea, project, or cause - aka crowdfunding.
  • Represent yourself for a loan - aka peer-to-peer lending or crowdsourced credit score.
  • Show proof of transactions, receipts - aka automated audit trail, peer-to-peer notary.
  • Offer rewards, gift cards, game currencies - anything redeemable in real world.

     And pretty much anything else you can creatively think of. The symbol would then be openly tradable with its price determined entirely by the free market, just like with any stock, bond, rating, currency, etc. At some point, you would either buy back the symbol you issued or offer some other form of exchange/reward to give it value. The trust that you do that is why people would buy or accept your symbol in the real world. It is your job to enforce and communicate that promise. It is no different than someone buying a stock on the trust that the company makes money for its shareholders or a loan being offered on the trust that the borrower pays it back with interest. Those that break that trust would find it difficult to find buyers or trading partners in the future, just like with anything else in the real world. The most important part is that every transaction on the exchange is permanent and there for all to see, so no one can ever lie and get away with it.

Global and Decentralized with No Middlemen

     The best part is all of this can be done on the same global decentralized exchange. Deep down, anything to do with value or money can be represented the same way. We've broken down the walls and categories to the point any sort of value in society can be represented and exchanged in a market equally accessible to all. You don't need to exchange money for shares or vice versa; you can directly exchange shares for other shares, commodities for loans, private equity for bonds, etc with again all the intermediary trades necessary to make it happen automatically occurring behind the scenes. Anything can be traded, issued, and sent in real time anywhere in the world.

     Most importantly, this exchange is owned by no one and is equally open to everyone on the planet, quite literally eliminating all middlemen in anything to do with transactions and exchange. The World Exchange is not really a place or even an exchange. It is a portal and interface to a global, decentralized network that is scattered all across the world. The technology behind that network is the Ripple consensus ledger protocol and is often compared to the internet; it is everywhere and controlled by no one. The World Exchange is but a mere internet service provider connecting you to it. Nothing is stored or run through The World Exchange itself; everything is directly between you and the decentralized network of other users. There is no custodian, no broker, no counterparty. As long as you save your account address and private key, your account is safe even if this site goes down. Any software connecting to the Ripple network will allow you to access your account using the same address and private key. In fact, you can actually save this page to your desktop and access the network without anyone's servers; to test this, you can have your firewalls block theworldexchange.net once the page is downloaded and everything will run fine because the site is not actually doing anything other than offering the page for download. Anyone can access and use the exchange directly with no one in between, and like the internet, the exchange itself is forever online, fully automated with no manual human labor or involvement.

How to Get Started

     The quickest way to get started is to create an account on the Login page or use an existing Ripple address if you have one.

     Min XRP Balance: After creating an account, the account requires a minimum amount of XRP to be activated. XRP is the native currency on the Ripple network with no issuer or backer. This initial XRP can be obtained by having existing users send you the XRP (share this link with your address), buying XRP on the exchange itself (1 XRP is less than 1 US cent), or reaching out to communities online, such as XRPChat and Ripple's own forums.

     Funding an Account: Funding an account is conceptually the same as having someone or some institution send you a balance of XYZ symbol in exchange for real-world cash or other assets. The idea is they'll redeem you in real-world currency if you or anyone else send the symbol-denominated balance back to them. In the mean time, you can then use the XYZ symbol with others that accept it as a substitute for what it represents (the cash), just like with a credit card issued by a bank or a gift card from a store. The person that offers the promise to redeem is called the Issuer or Gateway (in Ripple's official terms). You can find existing known issuers for any symbol by typing the symbol into The World Exchange and clicking on the "Backed by ..." link to browse the list (or input an issuer address manually). Currently, the easiest way to put real money in is with cryptocurrency exchanges such as Gatehub or Kraken. You would deposit real money on sites like those and purchase something tradable on Ripple; it'll often only be XRP, but once you have the XRP and send it to your own Ripple address, you can then trade it for any other symbol on the Ripple network using a site like this one. Longer term, this should change and it should get easier to directly deposit things into your Ripple account as more institutions adopt the network. There are already existing banks and major institutions that will actually back tradable USD and other real-world currencies on the Ripple network, but out of respect for Ripple Labs, the creator of Ripple, we will not name them unless they do so first publicly.

     Transaction Cost: The technology is open and free for anyone to use, but to prevent spam and other issues, a fraction of XRP is required to execute any transaction or activity. This is not determined by The World Exchange but by the Ripple protocol itself, which is an automated functionality not controlled by anyone. XRP at the time of this post is worth less than a US penny, making transaction costs pretty much free and magnitudes cheaper than any other form of payment or execution. What happens is this fraction of XRP is then burned and destroyed, meaning no one is being paid, and this is only so bad actors cannot spam orders or account creations to manipulate the system.

     Sending and Receiving: You must explicitly allow each symbol and issuer you want to receive before anyone can send you anything. If you are expecting to receive anything, make sure the symbol and who backs it are in your settings on "What Others Can Send You." Similarly before sending anything to a recipient, make sure the recipient has "Set What Others Can Send [Them]" to be able to accept the symbol you are about to send. All of this is done, so that you do not accidentally receive symbols backed by people/companies you do not trust or know. You do not need to do this for symbols you buy, sell, or issue, only for what others send you. The only symbol that does not require this is Ripple's native currency XRP. For convenience, major currencies (USD, EUR, BTC) are added by default so they can be sent to you unless you explicitly set the allowed amounts to a lower non-zero number.

How Does It Work / What's the Catch?
* and disclaimers, technicalities/legalities, etc...

     For the tech savy, The World Exchange is essentially a cold wallet, a fully client-side tool that connects you directly with the Ripple network. This is the most secure way to interact with Blockchain / Ledger networks by sheer design. Most exchange services turn themselves into a central point of failure by collecting user information which they must then secure. Our site is completely pass through and is an exchange in name only. Nothing passes through our servers, and nothing is stored or done by us. You can test this yourself by saving the page and running it without actually coming to this site or by blocking theworldexchange.net on your firewall and seeing the page still work. The site quite literally is just a direct user interface provided as-is and free of charge for you to use the Ripple network.

     The underlying technology behind the scenes is the Ripple consensus ledger designed to allow two parties to transmit between each other with no intermediary. It is similar to Bitcoin's Blockchain technology except that it not only facilitates quick transactions with no middlemen, it also allows anyone to issue new symbols to represent value. Whereas other cryptocurrencies are just that, currencies to be traded, Ripple is actually a decentralized exchange through which anything can be traded. You can even trade other cryptocurrencies through Ripple itself. Like Bitcoin, it is decentralized and distributed worldwide, meaning that there is no one who can interfere with your use and no one else is responsible for anything that happens except you.

     Ripple is actually a mature and well established technology in industry that's been online since 2013. Ripple Labs, the company which created the technology, has already implemented the technology in many major U.S. banks. The Ripple network itself is just sitting there on the internet with no barrier to entry or cost for anyone to connect to and use. The reason the technology is little known publicly and that no one else has created a similar free, open portal to the network is for a number of reasons:

  • Ripple Labs has pivoted to applying their technology just to bank transactions. That is but a sliver of what their technology is capable of, but as a company with many investors and private interests, they had to focus their use case. As a result of their financial industry focus, they had to retreat from being too public with their work. This combined with the stigma of the company having "sold out to banks" is why Ripple is less known today than it was in 2013 when it first started.
  • There is no business case for making something that is essentially free. The World Exchange is a pure, vanilla, client-side tool for the Ripple network and charges nothing to use. There is no extra process in between you and the network and no way for the creators of the website to profit. No VC would ever fund a free-to-use platform with no way to make money. So why did Autodidactic I create it then? Autodidactic I is essentially an inventors/artists guild of individuals who have already created other ways to fund their own projects with no outside backers or interests. As a result, this and many other projects by Autodidactic I tend to be profit-less in nature and done purely out of interest or just to see if it's possible.

     Things that are free and open are very rare, and it is a natural human response to be skeptical. The nice part is because it's free and open, you don't need to speculate. Just go ahead and create an account to try things out with. Do something with it or do nothing. It is up to you. The technology, however, is here and open to all.

Further Reading and Learning

 

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