It’s no breaking news that the cryptocurrencies market took everyone by storm. More and more investors, both individuals and institutional traders, are seeking for the best trades in this increasingly popular market and, of course, a share of the enormous pie the cryptos represent. Also, there is no news that Ripple (XRP) has been, and still is, under the focus of many traders, either newcomers or old-school crypto investors. But, not many are aware of what’s the deal with Ripple corporation and XRP. Thus, this is the naked truth behind Ripple (XRP).
Back in 2009 when Bitcoin (BTC) emerged out of the blue, the world was baffled by the idea of virtual currency, a virtual asset that is not and never will be centralized or, in other words, controlled by a government or a central bank. That’s why, maybe, BTC was quickly adopted as a method of payment for illegal activities commanded and conducted under total anonymity on the dark web.
But the time passed by and Bitcoin (BTC) escaped from the “underground” and created a real craze, growing year after year. On the other hand, the BTC cryptocurrency has always been decentralized and community-powered, as no society, government, bank, or corporation has ever controlled it.
There are several other cryptocurrencies just like Bitcoin (BTC), such as Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), and others. However, Ripple (XRP) is not one of these.
Ripple holds 60% of the whole XRP volume and can always pull the switch off
When they’ve emerged on the market, back in 2002, Ripple owners generated 100 billion XRP tokens which were not backed up by anything valuable.
Out of these 100 billion XRP tokens, 20 billion XRP remained within the Ripple’s creators, and 80 billion XRP tokens were released on the market. But, the naked truth about Ripple (XRP) is that Ripple Labs holds about 60% of the whole XRP volume. It is up to them if they sell their share to gain huge profits or if they release their 60% on the cryptocurrencies market at low prices to devaluate the Ripple (XRP) market for reasons known only bt them.
In short, Ripple (XRP) is kept by a third-party that can have something special in its agenda and could cause damage to investors any time it wants to.
The Naked Truth Behind Ripple (XRP) – XRP is not a cryptocurrency
To understand why XRP is not a cryptocurrency, you must comprehend the concept of “debt-based fiat money,” which is as old as the banknotes.
First, remember that the first banknotes in the world were pieces of paper that reflected the amounts of gold, silver, or anything with an intrinsic value an individual held in a primitive form of a bank. With time, the concept changed, and the governments started to print money with no backup in gold. The concept of “debt-based fiat money” is based on the fact that people believe in the value written on a piece of paper but that value is not an intrinsic value and is not backed up by any other valuable asset, either.
The same thing applies to Ripple (XRP), to some extent. More specifically, Ripple is a remittance network, an exchange system, and a settlement system, which uses XRP, its proprietary digital token to perform these actions.
Accordingly, Ripple (XRP) is not a cryptocurrency because it’s backed up with fiat money and is not intended to be money but only a way to exchange money, in opposition with Bitcoin (BTC) which is a cryptocurrency per se and holds an intrinsic value, that is the difficulty of generating a block on its blockchain.
Another reason why XRP is not OK is that the token is centralized and operates on a relatively closed blockchain that is not open source or straightforward as in the case of real cryptocurrencies such as Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), and so on.
On the other hand, Ripple (XRP) is not mineable. Thus, people cannot contribute to its generation, which is handled by Ripple corporation and its subsidiaries.
The naked truth about Ripple (XRP) is that XRP is not a cryptocurrency as it is owned by a centralized institution which has never hidden its conceptions about centralizing cryptocurrencies market and how good the things will be if that will happen. Nonetheless, Ripple is just a company which had the idea to blend the components of fiat money with the blockchain technology.
In conclusion, Ripple (XRP) should be cataloged as “digital fiat money” not as a cryptocurrency.