During the prolonged bear market that has engulfed cryptocurrencies over the past few months, Ripple Labs Inc.’s XRP has suffered significantly, having seen roughly three-quarters of its value wiped off. With recent reports of the company’s alleged attempts to bribe their way onto exchanges, XRP’s public relations have also taken a beating. Is Ripple doomed?
No Currency Is Perfect… but Is Ripple the Worst?
All cryptocurrencies have their detractors. Monero, Dash, and Zcash are generally feared and despised by governments because of their privacy attributes, which detractors rightly point out could make them attractive for use in crime.
Bitcoin is often criticised as expensive and cumbersome to use, having suffered scalability problems as its adoption has grown. Bitcoin Cash proponents also argue bitcoin is no longer true to the vision of Satoshi Nakamoto. Bitmain operates somewhat of a monopoly on mining the visionary coin, arguably diminishing its credentials as truly decentralized.
And Tron (TRX) and Verge (XVG) supporters endure the seemingly endless streams of pre-announcements and self-aggrandizing of their obnoxious founders, Justin Sun and Justin ‘Vendetta’ Sunerok respectively, nauseating even the industry’s most experienced sufferers of mindless PR.
So why is Ripple so roundly hated in cryptocurrency circles? They have a wildly successful company, a currency that is fast and cheap to use, and they give generously, as evinced recently with their $29 million USD donation to public schools. The answer lies in a few key qualities.
The Crypto Community Refuse to Accept Centralization
Ripple is heavily centralized. 60 billion of the 100 billion XRP tokens created remain under the control and ownership of the Ripple company. All the tokens were premined.
While environmentally friendlier than Bitcoin, the XRP token appears to shun the very spirit of the conception of cryptocurrencies, insofar as digital currencies outside the control of a single entity would democratize money in a way never before seen. Ripple’s very design flies in the face of the spirit of decentralization.
Banks Won’t Use It
A number of banks, notably in Japan and Korea, use technology products created by Ripple to effect easy and secure money transfers. However, they primarily deploy xCurrent, a software solution that enables cross-border transfers.
That solution does not rely on, or use, Ripple’s currency (or “digital asset” as the company prefers to call it), or its technology, xRapid. Ripple is attempting to lure banks to use xRapid once they have a handle on xCurrent, but price volatility is at least one barrier to adoption of XRP by banks.
This is a double-blow to Ripple. The banking sector for which it designed its coin refuses to use it, and that same use case is exactly why it has come to be so disliked among cryptocurrency purists.
Exchanges Won’t List It
Ripple, reportedly, has worked so hard to have XRP list on exchanges that it resorted to attempting to buy a listing on Coinbase. It is difficult to imagine Ripple’s was the first to attempt to “bribe” Coinbase to list a coin, but it is certainly the first found with its pants down.
Coinbase is reluctant to list currencies that the SEC may deem securities, and XRP’s close relationship with Ripple Labs, Inc. places it at risk of such a designation. Plus, crypto exchanges want to engage the crypto community, not enrage it. In rejecting a currency like Ripple, exchanges perhaps stand to gain perceived prestige among traders. And who can blame an exchange for not wanting to bite the hand that feeds it?
Having said that, XRP is listed on Binance and Bitfinex, two of the largest exchanges in the world, so it may be Coinbase being out of step with the industry as it dances strategically with the SEC, hoping to avoid the regulator’s wrath.
Is Ripple Doomed?
Ripple XRP has major name recognition with traders, and won’t be going away any time soon. However, its primary target users continue to avoid it due to price volatility, the wider crypto space rejects it as an illegitimate currency, and it also remains out of reach of Coinbase users despite the parent company’s dubious efforts to have it listed.
Proclaiming Ripple “doomed” seems far-fetched, but it is difficult to see XRP returning to the all-time highs it reached in December last year.
Have your say. Are you a Ripple hater? Is Ripple doomed to fail? Why?
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