The latest episode of Block Stars is the conclusion of the two-part conversation between current Ripple CTO David Schwartz and former Ripple CTO Stefan Thomas. Stefan is now the founder and CEO of Coil, a web monetization service that transfers payments to publishers and developers based on the time Coil members around the world spend enjoying their content.
Processing large amounts of these micropayments using the existing financial infrastructure is not cost-effective, especially for cross-border transfers. While at Ripple, Stefan started working on the Interledger Protocol (ILP) to enable faster, cheaper global transfers. He wanted to create a uniform payment infrastructure, similar to how the Internet does uniform communication.
“Before the Internet, there were all these different communications companies that had their own cables, wires and satellites,” explains Stefan. “The internet is a generic communication infrastructure. You can use it for any type of communication you want. I am thinking of ILP [as a] general infrastructure for the movement of value. “
ILP enables global corporations, remittance services, and payment companies to send payments across multiple ledgers. The open architecture enables interoperability for every value transfer system. More efficient and affordable payments also make them more accessible and bring financial inclusion to more people around the world.
“For the majority of people, having a central system is great,” says Stefan. “But if you are part of a marginalized population … this central authority will not care very much about your needs. A decentralized system is better able to serve more ambiguous use cases because people are more likely to take a self-help approach.”
Much of Stefan’s interest in financial inclusion was inspired by his time as a freelance web designer. Getting paid by global customers in return for paying the subcontractors they employed was cumbersome and expensive – especially in contrast to the hyper-efficient way everyone communicated over the Internet. After meeting potential partners, he discovered that companies in all industries were facing this major problem.
Creating better global access with a unified payments infrastructure is the ultimate long-term benefit of ILP. While he admits that some form of the universal approach is inevitable, Stefan’s motivation for bringing the indictment is to make sure that the resulting system includes as many people as possible.
“It’s great when I can get the skills to start a business,” he concludes. “It’s great when I can communicate with my potential customers. But when I can’t get funding for my business and my customers can’t pay me, parts are still missing. To me, [ILP is] complete the picture … interact[ing] with people in other countries economically. I expect this to be a tremendous empowerment for many people. “
Listen to the second part of David and Stefan’s conversation in Episode 10 of The Block Stars to learn more about how and why Stefan developed ILP, and for the critical advice Ripple’s outgoing CTO passed on to his successor.