Seven things you don't know about Ripple

Ripple's XRP tokens, introduced in 2012, will be "the next bitcoin" - no, it's a better bitcoin. A cryptocurrency that can complete a transaction in 4 seconds will surely set off waves in the financial world. In January of this year, XRP shares soared to nearly $4 per share, with a market capitalization of $140 billion, and its founders were on the list of the world's richest people.

However, since its inception, XRP has experienced a more or less decline (worth $0.33 at the time of writing). But even in this mysterious winter, XRP has successfully regained its second place in market capitalization, surpassing Ethereum, and Ripple executives continue to promise that something big is about to happen. So when curious observers refocus their attention on XRP, it's a good time to ask this question: For what they call "Ripple?", most people may not know what? "Okay, let Let's take a look."

1. Ripple and "Ripple" (XRP) are not the same thing

as the innumerable articles in the field of cryptocurrency media. Ripple is not synonymous with the so-called cryptocurrency XRP. It's a bit like Bitcoin (uppercase) and bitcoin (lowercase) or Ethereum and ether. Ripple (AKA "Ripple Labs Inc.") is a mature enterprise software company with an executive team, marketing department and board of directors.

This distinction is not unimportant – in fact, it is centered around Ripple and its XRP tokens, which makes Ripple very different in this “decentralized” currency world.

1. Ripple is not a cryptocurrency, XRP is not

even even Ripple's CEO Brad Garlinghouse does not think XRP is a "cryptocurrency", but the reason may be different from what you think . He told the audience a famous saying at the Yahoo Financial Summit in February last year - "I don't call it cryptocurrency." But he means, bitcoin is not. Instead, he assumes that all cryptocurrencies are Better positioned as "digital assets." "Very good. But that doesn't mean XRP, Bitcoin and Ethereum are the same thing.

Ripple's XRP token is "pre-excavated", which means that when it starts, all 100 billion tokens will be released to the world on the first day. What we mean by “release” means that the creators of XRP have reserved 20 billion tokens for themselves and “gifted” the remaining 80% to the company Ripple Labs (then called “Opencoin Inc.”). ). How generous this is. Today, Ripple holds approximately 60% of the total XRP supply, and all transactions on the XRP books are verified by Ripple's centrally controlled "trusted" nodes. In fact, we really can't call it cryptocurrency.

1. The fact that most XRPs are locked in

an entity that controls most of the world's XRP supply is likely to make other holders nervous. This is understandable. If Ripple decides to end the day's work and throw all its treasures on the market?

Ripple came up with a solution: it locked 55 billion XRPs in a escrow account in May 2017. Since then, the company has provided 1 billion XRP of funds to its banking solutions companies each month and distributed tokens to institutional clients as needed. (Unused XRP will be sent back to the vault, and there are still nearly 53 billion tokens in the escrow office.)

1. Banks don't want to have anything to do with XRP.

Ripple's XRP tokens are often referred to as "bankers' generations. Coin, but it turns out that this is a bit of a misnomer. Although Ripple boasted that it now serves more than 100 financial institutions, most of them do not use XRP at all. All of Ripple's customers use the company's xCurrent product, an alternative to SWIFT, which allows banks to quickly settle cross-border payments without the need for XRP.

A few Ripple customers who use xrapid are non-bank financial customers, and xrapid actually needs XRP for settlement. Garlinghouse told CNBC in June that he was "fully confident" that a large bank would use XRP before the end of the year, but the fact is that no bank has started using XRP. If the bank really decides to use xRapid, they have no incentive to hold XRP, and, as Ripple himself has made it clear, there is no need to hold XRP. However, Rippleinsists believe that holding XRP is beneficial and hopes that its founder, Jed McCaleb, will stick to his point of view.

1. Jed McCaleb's story

Ripple was founded by Jed McCaleb, founder of Mt. Gox. Yes, it is Mt. Gox. But he is no longer in the company. McCaleb's departure from Ripple is a long and complicated story. Fortunately, a user at Steemit helped us summarize this epic story. (Finally, you'll want to stay and listen to Ripple's CTO David Schwartz (David Schwartz's comment, he responded to some parts of the story and raised objections.)

But the point is: 2013 McCaleb left the company with unsatisfactory terms and took away his 9 billion XRP. The following year, he created a competitor (clone) called Stellar by forking XRP. Soon after, McCaleb announced plans to sell a large number of XRP shares he held, causing XRP shares to fall 40%.

Lawsuits followed, and Ripple finally reached new legal terms for McCaleb in 2016. But according to the Wall Street Journal It is reported that in September of this year, Jed seems to be playing his old tricks, inexplicably "accelerating" his sell-off, even if Ripple claims to have control over McCaleb's XRP.

1. Ripple claims that it did not create XRP

Even more strange is that Ripple has been actively promoting the notion that the company did not create XRP tokens, which is clearly trying to rewrite the myth of creation.

Part of the reason may be the marketing strategy – the company is committed to letting users understand the difference between Ripple (company) and XRP (digital assets) and why their personal success may not be as relevant as we once thought. More likely, Ripple's roadmap hides some considerable legal barriers, and if there are enough people who believe they have nothing to do with the creation of XRP, these obstacles may be bypassed. But this argument is largely based on semantics and falls apart under scrutiny, as Preston Byrne was a lawyer in a blog post last September. The same is true for deconstruction. His conclusion is: Ripple created XRP.

1. XRP may be a security product

if we accept a non-revisional version of Ripple's history - a version we all know and love before the 2018 bear market. So long ago, in a world of cryptocurrencies that felt very far away, a startup created and sold a token to fund its business. Doesn't it sound familiar?

Ripple insists that XRP is definitely not a security product. But there are enough people who disagree, and the company is currently facing multiple lawsuits from investors. Investors accused the company of failing to register its securities with the Securities and Exchange Commission (SEC) and providing various disclosures related to securities transactions in order to claim compensation. The SEC has not yet commented on the XRP, and Ripple recently moved to move one of the class actions from the California court to the federal court. A cryptocurrency lawyer said that in a federal court, it is more difficult to prove that an asset is a security.

However, if Ripple does not create an XRP token - and "there is no direct connection between Ripple and XRP." As Ripple's Director of Regulatory Relations said to the British Parliament in May: "So, why are regulators so concerned about how this completely unrelated token is classified? It's a headache."