“Over time, we will see the NFT market expand,” said David Schwartz, CTO of Ripple

Non-fungible tokens (NFT) have been dominating the crypto market this year.with Sales of more than 2.5 billion U.S. dollars In the first half of 2021, it is not surprising that both the crypto community and mainstream creators have launched NFTs to increase revenue and participation.The rise of Metaverse has also promoted the adoption of NFTs, proving The value of non-substitutes to major brands Same as social media platforms.

Although NFT sales have soared, the Ethereum blockchain continues to dominate this field.For example, a recent report by Cointelegraph Research found that Ethereum at least represents 97% of each NFT market sectorr, including games, collectibles, and markets.It is worth mentioning that Moonstream, a blockchain analysis company, found that about 17% of addresses Control over 80% Among all NFTs on Ethereum, it proves that there is still huge inequality in the NFT market.

Despite this, it is important to note that non-fungible tokens are still a very new early concept. Although Ethereum currently dominates the market, it still has important competitors.

For example, blockchain payment company Ripple recently announced an investment In Mintable, the NFT marketplace, this will allow the platform to integrate with the XRP Ledger (XRPL), enabling creators to sell their NFTs safely and effectively. In addition, in September this year, Ripple roll out A $250 million creator fund to promote tokenization innovation, with special attention to non-fungible tokens.

In light of Ripple’s recent involvement in the NFT field, Cointelegraph spoke with Ripple’s Chief Technology Officer David Schwartz during NFT NYC to learn more about the company’s growing interest in non-fungible tokens.Schwartz also discussed other topics, including the rise of central bank digital currencies or CBDC, and the goals behind digital currencies Packaged XRP (wXRP) tokens And Ripple’s upcoming roadmap.

Cointelegraph: Thanks for joining me, David. First of all, what did you discuss in your NFT NYC presentation?

David Schwartz: My speech at NFT NYC is mainly about carbon neutral NFT and solving energy consumption issues. Obviously, we will not solve the problem of climate change in the blockchain field, but at least we can’t make it worse. This is not a technical issue-we know how to not consume so much energy, it is just a matter of persuading people to adopt more climate-friendly technologies.

Cointelegraph: Ripple now lets people create NFTs on the XRP ledger. Can you discuss it in detail?

DS: We are a bit late to the party, but it’s not too late. If the NFT succeeds, then we are all too early. We initially started to study how people want to use NFT, and realized that many of the challenges people face are due to the fact that the technology is very primitive.

“Every company that wants to enter this field requires a lot of specific expertise, which is not a good way to develop. Therefore, building this tool is our constant concern. In addition, sometimes funding is an obstacle.”

When someone has a good idea with the right tools and the right team, sometimes they just need more money to expand. We can help them overcome this problem to prove that the technology will work the way they want.

Cointelegraph: You also mentioned that XRP Ledger is energy efficient. Can you explain why this happens?

DS: Yes, the reason Proof of work, Or PoW, a system like Bitcoin (Bitcoin) And Ethereum (Ethereum) The reason for consuming energy is that they are specifically designed to create artificial scarcity. If you want to profit from scarce things, you will want artificial scarcity. You also need artificial scarcity to make something valuable, and you need to convince your customers that this scarcity is not artificial.

Therefore, PoW creates artificial scarcity by using scarce things (ie energy). However, when energy is purely used to create artificial scarcity, it will push up costs. The only reason you want to do this is if you get a sum of money. Only those who receive these fees are promoting the technology.

In the XRP ledger, no one charges transaction fees, so no one wants high fees. This fee actually covers the cost of processing the transaction. The fact is that the XRP ledger can work without artificial scarcity.

Cointelegraph: Compared with Ethereum, are there other benefits to using XRP ledger for NFT?

DS: Yes, one of them is scalability, or the number of transactions per second. You can do things on Ethereum that you cannot do on the XRP ledger. This is why a lot of decentralized finance (DeFi) work is being done on Ethereum today. You can do almost anything you can think of, such as loans, TradeFi, mortgages, and mortgages. We do not have these functions on the XRP ledger today, but you can cast NFT.

We do not have these functions on the XRP ledger today, but you can cast NFT. We also have a decentralized exchange (DEX) where you can issue new tokens. Payment is cheap and fast, so to some extent, this is a basic engineering trade-off.

“If you want to do everything, then you can’t be good at anything. XRP Ledger has a list of things that it does very well. If one of them is something you need, that’s great. But if one thing It’s not what you need, then you need to move to something more general.”

Part of the reason for the lower transaction speed and cost of Ethereum is that you can build more flexible technology on the blockchain. Most people who build on the XRP ledger are doing complicated things, but for technical reasons, they don’t need these to be correct on the ledger.

Cointelegraph: What is the best use case for anyone who wants to create an NFT on the XRP ledger?

DS: Today’s use cases are mainly collectibles. On the XRP ledger, the cost is much lower, so if you build an NFT on Ethereum, it must be worth at least $500. Even so, the cost will be close to $100. The XRP ledger has much less expense, which allows for a wider range of use cases.

I think most of today’s use cases are collections in a broad sense, such as works of art, things related to digital art, things related to musicians. But I think we will see the NFT market expand over time.

Cointelegraph: I also want to discuss Wrapped XRP. Can you elaborate?

DS: Packaged XRP is an asset designed to track prices Ripple. For each Wrapped XRP, there is an XRP associated with the ecosystem, and the ecosystem will keep the XRP locked until the Wrapped XRP is free. The idea here is that they should track the closing price. The behavior of wrapped XRP is similar to XRP. For example, if your purpose of using XRP is only to move value, and you have things of the same value, then they should be used as substitutes in the market.

“The disadvantage of Wrapped XRP is that you cannot move it cheaply and quickly on XRP Ledger like XRP. However, the advantage is that you can use it in DEX on Ethereum.”

For example, if you have 500 XRP available for DEX and you cannot do that today anyway, then Wrapped XRP will enable you to get the token economics of XRP and the semantics of Ethereum. This will help prevent XRP from being locked out of functionality. We can look forward to the launch of Wrapped XRP in December.

Cointelegraph: What’s next for Ripple?

DS: We have been working hard to promote CBDC. What’s exciting is that there are many people in this field who don’t really understand the capabilities of CBDC. Our vision is to imagine that every financial institution in the world can settle every fiat currency with all other financial institutions within a few seconds. This is huge, but it requires interoperability and security.

“If you want to build a payment system of that size, then you need a security model that is not used by swift, and the blockchain has almost no security issues.”

Another feature is interoperability. For example, the United States cannot establish such a system because Saudi Arabia will not use it. However, if Saudi Arabia builds a system and the United States builds a system, then there must be an interoperability standard. Otherwise, American banks will not be able to settle euros with European banks.

The other thing we are doing is Joint side chain Allow assets to move freely between blockchains. Wrapped XRP is an example because it allows XRP to move between XRP Ledger and Etherem, but these are point solutions to specific problems. The advantage of a solution to a specific problem is that it allows for an innovation that is currently unachievable.

related: Beyond the NFT hype: creating a lasting business model for artists

Today, if you want Ethereum smart contracts, you must use Ethereum smart contracts to build on the blockchain. You must also abide by rules such as the size of the smart contact. Therefore, you cannot innovate at the level of changing these rules. The role of the joint side chain is to allow you to innovate at the lowest level, so users can build a blockchain with any fees they want and any assets they want. It can be public or private, and can live with real money in a short period of time.

This is very useful for developers who need to solve specific problems or want to make changes to other blockchains and need to convince people that these changes are effective and safe. The joint side chain today provides a way to build a real-time blockchain, allowing users to innovate in the blockchain itself.