There has been a lot of debate as to whether XRP is a security or otherwise. Basically, the digital asset is classified as a cryptocurrency but when you look up how of cryptocurrency is defined, it tends to leave out most of XRPs’ design attributes.
To most critics, XRP has deviated from its original purpose and is chasing the market demands as opposed to what a cryptographically designed asset should work. The diversity of technology and products on offers might conflict what the investor is looking for in a digital assets under the crypto-guise.
Increased Crypto Awareness
It is a fact that when people discuss cryptocurrencies, what come into their mind is Bitcoin. What they fail to understand is that Bitcoin original goal to offer an alternative to fiat which did not achieve 100%. This is where XRP and other Altcoins came in; to correct Bitcoin’s “mistakes”.
Out of logical necessity, you do not correct a technological mistake using the same technology and that is why XRP is totally different from Bitcoin. Ripple is industry specific while its predecessor is a general coin akin to value store where value is dictated by scarcity.
During the crypto-boom earlier this year, XRP hit an all-time high mark of $4 before sky diving to under $1. This attracted the masses making it popular and keeps growing bigger by the day. Industry leaders, including Ripple own CEO Brand Garlinghouse said at a Yahoo Conference earlier I the year that “I don’t call this cryptocurrency. It’s not currency,”
A True Cryptocurrency is Decentralized, XRP is not
It is a fact that XRP is centralized and to end the debate, it needs to be decentralized and attain the true cryptocurrency status in the market. Ripple, the company uses the term digital assets. In the market circles, it is classified as a non-mineable coin.
If a coin is not decentralized, it will be hard to separate it from the traditional online money. However, XRP is a digital coin. With a centralized currency, it simply means there is a governing system around it that has a say over the direction transactions take and can “fix” market prices.
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A decentralized digital asset allows the market to take control of its future; there is transparency and information flow is not restricted. Involving a central entity with the operation circles of XRP is what makes it stand out.
XRP Value Addition in the Market
The debate should take another course and not just whether the coin is decentralized or otherwise. The market value addition speaks for itself and the coin is faring on better than most major coins that do not have defined products to add value to the cryptocurrency market.
However, there is a conflict of interest; The investors are looking at XRP in terms of price appreciation while Ripple, the company, is looking at XRP as a coin that will lowers the cost of cross-border payments and give the consumer to enjoy the benefits of blockchain. The above explains why the Company is in control of the transaction validating nodes. This is different from other platforms where anyone can run the software and validate transactions.
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MIT and Microsoft support XRP transaction validation and this create trust among stakeholders. The beauty of it all is that it offers fast transactions and its scalability is unquestionable. When you compare the two market leader; BTC and ETH, Ripple is secure, offers near zero fee and energy efficient.
To sum it up, Cory Johnson says XRP “demonstrates an intrinsic value” that stands out among “sillier” coins and assets.
The Future of XRP
According to the developer team at Ripple; plans to decentralize XRP are underway. Soon, the platform is set to be a natural choice to launch ICOs, a fact that the company is hesitant to jump into. According to Stefan Thomas, the Ripple CTO, XRP will become “more decentralized” than BTC once the technology is tweaked.
No one thought XRP will be an open-source platform but now it is. The system is known to deliver on its promises and the next step appears to be the decentralization process. However, critics insist that Banks have no reasons to use XRP. The introduction of its flagship products; xCurrent, xVia and xRapid and increased adoption has changed the thought of a coin without real life use cases.
With increased use cases, the debate whether XRP is a security or crypto is set to be put to rest. According to David Schwartz, the Ripple chief Cryptographer, the usefulness of XRP is being felt where is now operating:
“Now, say you’re a company like Seagate that pays out money all over the globe. If you have to make payments to five countries in our corridors, you’d rather hold one pile of XRP than five piles of different currencies.” However, he admits; “it is a pretty crazy thing” Ripple is trying to do, if that succeeds, it should massively increase the price of XRP.”