Ripple/XRP doesn’t need the support of the cryptocurrency movement. The cryptocurrency movement needs Ripple/XRP as the bridge that brings blockchain into the mainstream.
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Ripple is the best chance the cryptocurrency movement has at widespread adoption and success. There, I said it. If that statement didn’t infuriate you to the point of closing your laptop and throwing it across the room, then read on and hear me out.
Who is Ripple and What is XRP?
If you’ve been following any sort of cryptocurrency news recently, you’ve undoubtedly heard of Ripple, the company behind XRP, the digital asset. The difference between Ripple and XRP is an important one. The two terms are often thrown around interchangeably but they are, in fact, completely separate in both form and function.
Ripple, or Ripple Labs as it was formally known, is a company based out of San Francisco, California using blockchain technology to revolutionize cross border payments between banks and other financial institutions. Simply put, they’re trying to replace SWIFT, the messaging system enabling the vast majority of wire transfers taking place around the globe today. This is no small feat.
XRP is the native digital asset of the Ripple Network. The XRP ledger is a blockchain ledger similar to Bitcoin, Ethereum, and the other big names you’ve heard of. That said, other than the use of blockchain, XRP has very little in common with traditional cryptocurrencies. This article from Investopedia details why many don’t consider XRP a real cryptocurrency and is worth reading for an education on the subject.
Ripple Doesn’t Need Popular Support
Talk to any Bitcoin or Ethereum enthusiast and bring up Ripple or XRP and you’ll more than likely hear a scoff or dismissal. The common critiques of Ripple/XRP are many but range anywhere from Ripple being centralized and a private company subject to U.S. law to Ripple enabling the same crooks who caused the 2008 financial crisis. Yes, it is a controversial subject within the larger crypto discussion, I’ll be the first to admit it. XRP is nothing like Bitcoin or Ethereum, it’s not decentralized, and it isn’t going to overthrow governments or banks. It also doesn’t need the approval or support of the general public to succeed.
Ripple is a financial technology (FinTech) company providing a service which uses blockchain and a native digital asset to save banks and financial institutions money on cross border transactions. Period. Their business model is completely dependent upon providing value to financial institutions and completely independent of whether cryptocurrency enthusiasts like them or not. If Ripple is successful in implementing their three solutions (xRapid, xCurrent, and xVia) on a global scale, XRP will be valuable not because it is being traded on popular exchanges or being HODL’d for long-term speculation, but because of the role velocity of money will play in fulfilling its’ use case(s). In order to source cross border transactions on a global scale, the total value of XRP in circulation must be enough to successfully enable these transactions without clogging or crashing the network. If Ripple is successful, the value of XRP will be tied to the volume of cross border payments being sent using XRP.
The Cryptocurrency Movement Needs Ripple
Bitcoin and the cryptocurrency movement as a whole were born out of a libertarian ideology. In 2008, the need for trust in the current financial system made it possible for a group of bad actors to crash the U.S. economy. Do any sort of research on that financial crisis and I think you’ll agree with me… we were lucky it wasn’t worse. Satoshi, whoever he is, envisioned a society where technology enables the transaction of value with the same ease information currently moves over the Internet. In this world, banks and governments don’t need to exist and technology eliminates the need for 3rd party trust of any sort. We vote on our smartphones and our cars drive themselves performing trillions of microtransactions all using blockchain technology. I agree, this futuristic society sounds like a wonderful place. But, I don’t think it’s realistic anytime soon and it’s time someone brings attention to this elephant in the room.
Its unrealistic to think banks or governments will disappear in ten years or even in my lifetime. Blockchain might be a novel and revolutionary technology but it isn’t immune to the adoption curve and it’s not going to triumph over night. The ups and downs we’ve seen in this market since its inception have proven that, like the Internet, large scale adoption of blockchain will take time and, ironically, trust in the trust-less system. This is because consumer adoption and public perception run hand in hand, especially when money is involved.
Ripple the Visionary
Instead of trying to turn the current system on its head, Ripple sees a ripe opportunity to use blockchain technology to improve the existing financial system. Before we can run, we have to walk and before we can walk, we have to crawl. If Ripple is successful, governments, banks, financial institutions and traditionally laggard adopters will see blockchain technology for the incredible asset it is and not the “dangerous weapon” so many do today. The use of blockchain technology to realize Satoshi’s goal and transact value like information on a global scale isn’t outside of the realm of possibility. I would even go so far as to say it’s an eventual probability. But, as they say, Rome wasn’t built in a day. It will take time for a change of this magnitude to happen. Ripple is pioneering bringing blockchain into the mainstream and reinforcing a positive public opinion of this technology. They are a bridge between the new and old and their success does nothing but help realize a better and more efficient financial world.