After the XRP rate has risen by almost 200 percent since September 17, Ripple is on everyone’s lips. What are Ripple, xRapid, and XRP and how is it all related? A critical introduction to the cryptocurrency ecosystem.
There is currently no way around Ripple. The search queries have multiplied in the last week and social activity on Twitter has also increased – all correlated with the legendary price increase:
Ripple, or more precisely XRP, is known as “the bitcoin of the banks”. The cryptocurrency is accused of being highly centralized and also in the current price jump critical voices have spoken of a launched pump. As one stands to this daring theory also: From the timing ago the announcement could not have got better regarding the market introduction of xRapid.
No matter which side of the front you’re on, whether you’re a ripple advocate or a ripple foe, it’s always worth knowing more about the system. As a basis for this article wants to collect all the essentials about the company, its products and the cryptocurrency. Both older articles are linked as well as referenced to new, external sources.
For those who do not even know Ripple, please refer to the tutorial, which outlines the main features behind Ripple and XRP.
Thorsten Langner has written about the ripple ecosystem in a three-part series. In the first part he introduced the story of Ripple. Without paying too much attention to the details, it should be said that Ripple’s original idea is much older than Bitcoin: 2005 is the year of birth of ripplepay.com, However, before claiming that Bitcoin is not the oldest of all cryptocurrencies, it has to be stressed that Ripplepay is an IOU system. So it was a kind of decentralized promissory note system and not a stand-alone money. The claim to create a digital equivalent to gold initially did not exist, but came later. Ripplepay and Bitcoin have pursued similar but not the same goals. Ripplepay wanted to be a payment system, while Bitcoin claims to be money.
Thomas Langner has taken a closer look at the different Ripple products in the two other articles on Ripple . In doing so he analyzed, similar to BTC-ECHO in another article, which of the products depend on XRP . The articles showed that xCurrent and xVia do not work with the cryptocurrency. xRapid, on the other hand, requires the cryptocurrency.
Why is that important? Especially for investors it is important to know which of Ripple’s products really are related to XRP. Although news about an enhanced adaptation of xCurrent may have an indirect, temporary impact on the XRP rate, that would be just a hype. In contrast, announcements such as the recently voiced xRapid adaptation are quite interesting. If it really came to an adaptation of xRapid, that would mean that large banks rely on XRP. No wonder that many hope for a massive long-term price gain.
The above linked articles by Thomas Langer give an overview of the different products. In the commentary of September 21st Sven Wagenknecht addressed the crucial question of decentralization. This was also discussed in another article, which also included xRapid, xVia, xCurrent and XRP . Ripple never tires of emphasizing that XRP is not part of Ripple and is now more decentralized than Bitcoin.
With regard to the possibility of setting up a node, the statement regarding decentralization is not entirely wrong. The developer portal of XRP describes in detail how to do that. However, it also stands out that storage of the entire transaction history of XRP would require approximately seven terabytes of storage space. The Ledger, although younger than the Bitcoin blockchain, is over thirty times as big!
Regarding decentralization, there are two more questions in the room that are seldom addressed: the distribution and the use cases around the cryptocurrency.
Looking at indices like Coinmarketcap hides much of the available supplies in front of the public eye. If one took into account the actual supply, the market capitalization of Ripple with 60 billion US dollar would be solidly in second place. But where are the almost 60 billion XRP that the crypto indexes do not list? Most of it is in the hands of Ripple! While they are backed by an escrow that allows monthly access of more than a billion XRP, even that amount should be enough to manipulate the market price.
In addition to this concentration of capital, the question arises as to how centralized the cryptocurrency is with regard to the use cases. Even with Ripple’s announcement, xRapid’s XRP’s big use case is still not an independent product. Although there with Codius a smart contract solution based on XRP builds, but this is still in its infancy.
As with other cryptocurrencies, the XRP community would do well to have a stronger # buildl mentality and develop ripple independent cryptocurrency-based solutions. So the cryptocurrency would actually become a Ripple independent project and the course would not have to wait eagerly for xRapid announcements.
Another aspect of “decentralization” that stands out is the strong herd mentality in the social networks. Yes, the Bitcoin and Bitcoin cash ecosystem also has strong maximalism, but there are quite different positions. On social networks, especially on Twitter, some have the impression that very organized and unfair means are used to address critical voices. At the end of August, Element’s co-founder Geof Golberg further analyzed the network of XRP loyal ripple accounts, He concludes in this longer article that much of the XRP community on Twitter is fake accounts or Twitter bots. If this is the case, online is not about decentralization, the online community would be the same. However, it also needs to be analyzed what the situation looks like with other cryptocurrencies.
Whether and how decentralized XRP is depends on the point of view. The capital and the use case are definitely. The network itself is not. But maybe that’s the wrong question. Of course, for classic crypto enthusiasts, decentralization is a value in itself, but what about Ripple’s primary customers? For these, a middleman could be helpful. Again, it seems to be the point of view.
For the investor there is and is currently a lot to do with xRapid. If this project actually launches early and if many banks can accept it, rosy times will break for owners of XRP.
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Categories: Crypto Currency