ipinky7

Imagine I hold EUR and you hold USD. We sit on a table together having a beer.

You want my EUR.

Why would we need a bridge (asset) to settle this?

That was the question I asked during my livestream (time marker 07:00-27:00). I kept on nagging my followers to think about it.

Think a few moments about this question yourself. Then continue to read.

Some answers
from my followers

• Value bridge

• to enable cbdc's interacting with each other

• exchange of value

• because countries can print CBDCs and continue to devalue currency to gain a trade advantage

• to be a trustless reserve currency making a level playing field

• Fulfill a company's working capital in a timely manner..bridge$

• independence

• For interoperability of 2 different assets

• Because it has to work in hub mode. Otherwise each network had to create specific connector to each different fiat.

• for trust?

• To not pay for Fiat exchange fees

• Because USD centric global financial system isn’t sustainable anymore

• To connect point A to B

• would need 1000's of cbcd's pairs, low liquidity

• fairness in trade

• Because you are going from one walled garden to another one – XRP makes the 2 different assets interchangeable

• no country gains an advantage by manipulating their currency

• to access

• to negate the need for pre funded nostro vostro accounts

• it's cheaper faster und keine Kursschwankungen

• it's decentralised

• To circumvent incumbents

• surely you need a bridge because you can't use Euro in USA and vice versa

• Liquidity

• To settle 2 different assets

• convertability

• single source of truth

• Instant LIQUIDITY

• for exchanges

• makes the exchange of the two currencies trustless

• it will take too much time to get the dollar or euro because we need to fly it to each other

• for walled gardens to be connected together thats why

• Sicherheit damit gewährleistet werden kann das dass Geld auch ankommt

• liquidity and speed

• Tx costs and fees

• xrp connects all independant blockchains

• If there's only dollar and euro you don't. But if there's 30 different currencies, holding all those nostros wouldn't work.

• Thea are different currencies and have different values

• to bring it to each other

• xrp will be like fiat and highly liquid

• no trust

• we need a bridge to get to the other side

• because money can't be in two places at the same time

• to transport it fast and cheap

• Everything can be bridged together

• Dass es für alle Länder gültig ist (then it’s valid for all countries)

• michael dont know thats why hes asking

• trustless exchange between two partys

• to bridge geography

• free up liquidity

• To transfer value.

• speed of settlement

• A bridge allows to have trust-less settlements

• walled gardens

• To go from Digital to Fiat

• You don’t specifically need a bridge you could do it with a smart contract

• ALL CENTRAL BANKS WILL BE CONNECTED BECAUSE OF THE BRIDGE

• trustless instant liquidity and settlement

• ILP is the veins XRP is the blood

• To swap 2 different assets

• XRP makes them interoperable

• speed of settlement and ledger

• We should all know the answer ! 😆

• You are assuming that there are just as many people who need euros as dollars.. or any other fiat needing the US dollar.. ? Some currencies will be in more demand

While most of these answers are not wrong, they do not answer the core question:

**Why do we need a bridge?
**

The very simple answer is

**With a neutral asset you can buy anything.
**

**Example
**

Butcher gets paid in bread once Baker buys meat. Butcher does not want bread. He wants something which he himself can use to trade. Say he needs new knives, he most likely won’t be able to trade the bread he received from the Baker against the knives he needs.

IF the Baker pays him in something neutral, everywhere accepted, FIAT (or simply money), then the Butcher can go anywhere and trade this neutral asset for anything he needs, eg. knives.

The same is true for XRP, only that XRP buys different stuff. While money (or FIAT) buys goods and services), XRP buys FIAT currency.

So in that respect XRP will be like an over-money, or meta-money, or uber-money.

Think again about the example in the introduction:

Me and you sitting at the table. I hold EUR, you USD, you need my EUR, but I don’t want your USD, cause next month I am going to Japan and need Yen.

If you pay me in XRP for the EUR, I can go an trade my XRP against Yen and happily go to Japan.

Me and you sitting on a table issues like:

• trust

• speed

• cost

• settlement

• value exchange

• walled garden

• convertibility

can be solved right there at the table. With other technologies than digital assets, all these points could be covered also if geographic distance exists.

But the one and most important aspect of XRP, its neutrality against any other FIAT, cannot be achieved without a digital bridge asset
.

That's why we need a bridge!

Reduction of cost, increase of speed and trust is just a very welcome side effect.