Ripple and XRP have been the center of attention for quite some time. In particular, many news outlets, including Bitcoin Exchange Guide, were helping investors understand XRP’s utility. A new post shared by Hacker Noon took a different approach, that is, stating possible reasons why one must reconsider Ripple and XRP altogether. Five reasons were shared, and here’s a quick breakdown as to what was noted:
1. XRP Is Not Ripple And Vice Versa
The argument made here is that Ripple and XRP should not be perceived as one, but instead as two because of their increased differences and purposes. Ripple is a centralized firm that plans to become the next payments solution. The firm houses three products, namely xCurrent, xRapid and xVia.
xCurrent is a bank-friendly product, as it allows them to complete cross-border transactions. While it relies on RippleNet, it has nothing to do with the XRP token, which means the more banks use the products XRP token value remains unchanged.
xRapid, like xCurrent is a bank-friendly product that not only focuses on improving liquidity, but also makes use of XRP. This is also a product that the bank prefers because of its ability to move money around.
Lastly, the xVia will supposedly work in the same way as the xCurrent but includes businesses as well instead of simply focusing on banks.
Ripple the firm has since gained support from several banks, which include Royal Bank of Canada (RBC), Standard Chartered, SEB, Westpac, Santander, UBS, Bank of Montreal (BMO), CIBC, and SBI Remit – a sample list of over 100 banks.
All this being said, it is clear that neither the products use XRP nor do almost 99 per cent of the banks, which is the main reason why XRP’s token price has not seen growth. Another point that was made here is that “banks using xCurrent and then cross-sell them into xRapid,” could potentially influence XRP prices, but is that going to happen? The answer remains a secret!
2. “XRP Is Not The Currency Of The Future”
Hacker Noon does not see potential in XRP because of Ripple’s focus on banks. While this might be beneficial for Ripple as a firm, it is not for XRP as token because banks are more for moving money around, whereas XRP’s token value will only rise if investors hold the tokens.
According to the report, Ripple’s goal is to eventually replace SWIFT, which is responsible for “moving money between banks internationally.” The SWIFT system has supposedly gained a profit of nearly $31 million, which is not comparable to the trillions and more around the globe.
So, why isn’t XRP the ‘currency of the future’? The case made here is that by focusing on the SWIFT market, XRP’s opportunities will fall.
3. Is XRP Really A Disruptive Tech? Looks Like It’s Not!
When we hear blockchain technology, we automatically think “disruptive” or “ability to revolutionize several industries”, so one would think that XRP has similar facets. Hacker Noon made the argument that Ripple isn’t necessary the only one offering global payment services, as R3 is doing the same thing. They’ve supposedly managed to accomplish a milestone without having to create a token on their own.
The example of SWIFT was also made here, as it is the on the top of the global payments list. With the exposure and support SWIFT has been running on for the past 45 years, it is believed that the same system can implement blockchain technology if needed.
Harry Newman, Global Head of Banking at SWIFT does not consider blockchain technology as disruptive but instead as an alternative. Newman was cited saying:
“I see these [blockchain] as constructive technologies that can be examined and adopted and used.”
Making it seem as if it is easy to implement, SWIFT has proven this to be the case as they have been doing research of their own. The report revealed that the system has since completed PoC with 22 banks through Hyperledger Fabric blockchain.
Stellar [XLM] is another reason why Ripple might take a step back, as the Founder of Ripple thought it was necessary to fork Ripple due to existing problems. To this date, Stellar has managed to secure sound partnerships with several payment providers, as opposed to simply seeking banks.
4. XRP: Decentralized Or Not?
Ripple, as we know it, is centralized and it has been noted that the firm holds nearly 62 percent of the XRP token and controls RippleNet. While this is surely to shake up investors, Ripple promised that it will lock up 55 billion tokens.
Whether they will or not is questionable, as all one can do is trust the team involved. Comparing Ripple to the digital coins nearly 18 years ago, the argument made is that any “centralized digital currency is too easy to kill with regulation”.
5. User Adoption Of XRP Doesn’t Mean Its Value Will Surge
This argument brings the aforementioned points together nicely. That is, XRP token price will only increase given that investors HODL. Since Ripple is too busy trying to secure partnership with every bank possible, such price hike is deemed impossible, considering the fact that banks want no money sitting around. User adoption is questionable because Ripple’s products alone do not necessarily support XRP!
What are your thoughts on this viewpoint? Are the five arguments enough to question the XRP prices? Will the token see no progress given that Ripple continues following its roadmap? Let us know in the comments below.