When Chris Larsen and Jed McCaleb co-founded OpenCoin in 2012, they had a dream of solving a real problem with traditional banking. That is, the high cost and wait time of cross border payments. Known today as Ripple, guards have changed, positions have shifted, but the goal has been actualized.
When you need to transfer from one currency to another, like USD to EURO, it takes a long period of time and can cost you large amounts of money to do so.
The Ripple Protocol cuts out all the middle men that are required in traditional cross border payments. Which saves the user a considerable amount of money.
Exchange of currency and deposit of currency from one account to another takes a few seconds and is very secure according to their CEO Brad Garlinghouse.
Ripple currently stands at over $100 billion market cap and over $2 per coin. Rumors that they will end up on Coinbase, the largest cryptocurrency wallet system on the market, fuels wolfish expectations for Ripple's value.
It is already in serious use and solves a real problem. Where PayPal can take more than 24 hours to transfer a payment from a bank to a PayPal account or vice versa, Ripple can move money from one bank to another bank, change the currency, and reduce the fees in 1/10000 the time. Its a bilingual Paypal on steroids
Something has bugged me since I first starting researching and investing in this currency. As great of a value that it has added to traditional banking infrastructure, I haven't been able to put my finger on what gives the native coin (XRP) it's value. If the Ripple protocol converts one fiat currency to another, say USD to EURO, what is the utility of the Ripple's XRP?
I never really got my answer. What I found was that you are required to put $100 in XRP on their platform in order to use it.
But!
To make a cross border payment, you also need to deposit the fiat currecy you wished to send. XRP ends up being used to pay for fees. But what prevents me from just paying with my fiat that I additionally have to deposit anyway? XRP isn't used in the payment. So it essentially just sits in the account taking an arbitrary task. Its almost as if it was an after thought.
Essentially, with a little additonal code, they could do away with the coin altogether and provide a service like any other company. The truth is, it is not a cryptocurrency at all. They are not part of the banking revolution, they are a traditional banking solution. Which is great! But they should be listed on the NYSE and go through the work of an IPO, instead of calling themselves a cryptocurrency.
Maybe I'm missing something, but it appears that their coins are simply shares of stock, masquerading as cryptocoins. It's a great technology which provides real value to the real world. But Ripple is no cryptocurrency.
And it doesn't stop there. The companies owners hold half of the coin supply, which isn't in circulation. So everyone who is invested in Ripple could at any time have the value of their share halved if that additional supply were to be released to the public. They are also a centralized company which works with traditional banking using a premined coin which has no proof of work, stake or any other system which empowers people.
They are eveything that currency has been for the last 50 years which inspired peer to peer blockchain in the first place. Most people in the cryptoworld are incredibly critical of them. And honestly, it's for good reason if you understand the crypto credo.
That is why I gave them a score of 0/30.
It's very possible I have missed something. But that is part of why I wrote this article. I have exhuasted my understanding of this situation. I hope that someone else can clear this up for me. I will gladly amend this article if the information is presented to do so. So please, let us know if we have made a mistake. Otherwise, Don't HODL this one for too long.
When people catch on to the actual value of XRP, it won't be pretty.