If you are active in the crypto community, you will have noticed by now that Ripple is a dirty word. XRP, even as it sits in 3rd place on the cryptocurrency market cap, is more often than not the subject of disparaging commentary and advice to new investors to put their money elsewhere.
However, never one to fall blindly into formation, I think it’s important that we remove ourselves from this popular negative sentiment to properly assess the role of Ripple and XRP in the broader cryptocurrency movement. Below, I will outline why I hold the unpopular view that we must let Ripple succeed if mass adoption is our goal.
What is Ripple?
Ripple is a San Francisco-based start-up that has developed a blockchain-based cross-border payments platform, which enables financial institutions and payment providers to instantly process their customers’ payments anywhere in the world. By adopting Ripple’s platform to process cross-border payments, financial institutions are able to realise significant time and cost savings, and customers are able to access their funds instantaneously.
What is XRP?
XRP is Ripple’s token. Built for enterprise use, XRP offers liquidity on demand, and is a fast and scalable digital asset. While the use of XRP with the Ripple platform is not mandated, XRP can achieve significant additional cost savings for participating institutions.
Why the anti-Ripple sentiment?
Now that we are clear on what Ripple and XRP are, we can turn to understanding why Bitcoin purists object to Ripple holding a place in the cryptocurrency market. For the purist, Bitcoin (and decentralised currencies more generally) represents an overarching goal of transforming the current fiat system. Today, as we all know, power is centralised in the hands of banks and governments, and the financial security of the masses is at the whim of a greedy, privileged few. To see evidence of how spectacularly this system can fail, we need look no further than the 2007-08 Global Financial Crisis, which has widely been accepted as the worst economic disaster since the Great Depression of the 1930s. This event was the catalyst for the elusive Satoshi Nakamoto to sow the seeds of a decentralised financial system in the form of the Bitcoin blockchain. By demonstrating that a decentralised currency was possible, Bitcoin gave purists hope that the future of money could be fully decentralised, and that power over the financial system could be stripped from institutions and governments, and transferred to the people.
It’s easy to see, then, why purists are impulsively driven to reject a blockchain start-up like Ripple, with its heavy connections to the banking sector and apparent lack of ambition to disrupt the fiat system. After all, what sort of revolution is this, if we give our weapons to the enemy? This is a valid point, but I want us to retire the pitchforks momentarily and look at the bigger picture.
Ripple has a significant role to play in mass adoption
If we leave the anarchist leanings of Bitcoin purism behind for a minute, an alternate scenario begins to emerge. Unfortunately, the unregulated and decentralised nature of Bitcoin has opened the door for a string of questionable dealings and scams over the years. The inevitable outcome of this is bad press, and Bitcoin has certainly received its fair share. As a result, the Bitcoin community has long battled those who seek to push Bitcoin’s reputation as a shady underworld tool used by criminals and gangs to obtain illegal substances, launder dirty money and commit tax evasion. As misguided as this reputation is, how easy do you think it would be now to convince central authorities that it’s a good idea to let Bitcoin replace fiat as the standard, global currency? If this is our goal, the transition must be far more subtle, or else we find ourselves fighting a battle that will only ever be uphill.
And yet, with all our negativity towards Ripple, here we have a company that has forged working relationships with banks and governments all over the world, to help them investigate and implement blockchain solutions to age-old banking problems. By gently tweaking the status-quo, Ripple is carefully undoing the damage inflicted upon cryptocurrency’s reputation, and introducing blockchain technology to the very systems that reject Bitcoin as a legitimate form of currency. It may not look like it just yet, but this is a colossal win for blockchain and the broader cryptocurrency movement.
It is my firm belief that mass adoption simply cannot occur unless the big power players in our current system allow blockchain to be seen as a legitimate and viable solution to real world problems. The more blockchain initiatives that we see being integrated into the current system – initiatives driven by companies like Ripple – the more we are able to unburden blockchain of its former reputation and give cryptocurrency the legitimacy it needs to be propelled into the mainstream. Like Rome, the revolutionary model of financial autonomy offered by cryptocurrency will never be built in a day. But by working with banks and regulators, not against them, Ripple is quietly easing the masses into the future, in a way that Bitcoin purists and anarchists simply cannot. It is for this reason that I believe we must give companies like Ripple a chance to succeed.
by Anna North