Maybe I was wrong about Ripple
My relationship with Ripple is a little complicated: its the second crypto I got interested in years ago, even before bitcoin, only after I got interested in ethereum (for smart contracts). Why? Because I was convinced in 2017 that crypto + stocks was the next big thing, and I Google searched which crypto was the fastest send; it was Ripple. Since then, faster protocols have emerged, and I’ve soured on XRP, with some fairly scathing twitter posts generally aimed at the low circulation numbers, and my understanding that a majority of Ripple validators were Ripple “insiders.” I went so far as to label XRP a shitcoin, along with Tron and Stellar:
My Misunderstanding about XRP
My critique of XRP breaks down to two main points (1) the circulating supply is low (about 43%), (2) it is “centralized.” Without bearing the gory details of my misunderstanding, I basically thought that there were 10 or less validators, and that if Ripple the company died, XRP would by necessity die too because the aforementioned “insiders” wouldn’t have incentive to validate transactions anymore. Not sure where I got this misinformation, though infographics like that below certainly contributed to my anti-Ripple bias.
Further Inquiry
So, spurred by a few of Twitter’s #xrparmy, I did further research. Here are the results: After Googling “Ripple Validator” I came to this page, XRP Charts. It lists validators, and shows clearly that there are plenty of non-Ripple parties validating XRP transactions:
From recent news stories, upwards of 80% of the validators are not “insiders:”
Ok, so it turns out XRP isn’t as “centralized” as I thought. True, 20% of validators are run by a centralized entity — Ripple the company — but this is true of may cryptos, and in my opinion doesn’t make it decentralized. Barring the possibility that ‘all nodes are equal but some are more equal,’ (I didn’t research this extensively) I think calling Ripple “centralized” is a misunderstanding.
Banking Ambitions
For anyone who remains open-minded about XRP, I encourage you to spend an hour listening to Anthony Pompliano’s interview with Ripple CEO Brad Garlinghouse.
First, and maybe most importantly, he comes off as a chill head. Mature, to be certian, but not stoggy and dated like David Marcus (Libra); not culty like Justin Sun (TRON) or CZ (Binance). Of all the things he said in the interview, the only thing I can cry foul about was that Ripple the company used to sell discounted XRP to big investors. With obvious scams like Telegrams GRAM offering (where accredited investors were offered GRAMS at 40 cents, which Telegram later tried to offer on the open market for $4.00), this is a sin of small proportions. There is also a hint that Ripple and Caleb (founder of XRP from 2012) have some friction, past lawsuits, etc, but that all seems like ancient history.
What Pomp also highlighted was that Ripple and it’s XRapid product are rapidly expanding influence in the banking sector. Banks contract to use XRapid, and Ripple sends a team to tool-up their facility, and then provides customer support. Then banks get the cheap transfers worldwide, as long as there is liquidity in the receiving country. Money Gram is also in. Once a major player like Wells Fargo or Bank of America signs up, the sky is the limit for XRP.
Security?
Brad made a good point during the Pomp interview — it’s ironic how ethereum leaned into the ICO craze, and the SEC declared it not-a-security, while Ripple leaned out, and the SEC is still deciding it’s status. Even if the SEC labels it a security and issues a fine, the EOS example shows us that the fine may be small, and the crypto price may not be affected much by an SEC judgement (especially a small one). Certainly a broader understanding that XRP is not centralized like I though — that XRP would keep churning even without Ripple — will aid the SEC’s understanding that it is more like ethereum (not security) than it is like EOS or Telegram (securities). If it is true that XRP is decentralized, the SEC won’t have any luck putting the genie back in the bottle by shutting down Ripple the company, and I predict a digestible fine.
I’ll tie this up by saying I wish Ripple, Brad, the xrparmy, and all the banks and investors on-board the Ripple train good luck, and hopefully no hard feelings about me calling XRP a shitcoin.
