XRP is the Marmite of cryptocurrency – some love it, some hate it – but, what is the XRP token all about, and why is it so divisive? We look into the premise and ambitions of Ripple and their XRP token and see why it has attracted plaudits, huge partners, lawsuits, and vitriol.
Ripple Labs began its life in 2004 when Ryan Fugger developed RipplePay, a decentralized monetary system that empowered individuals and communities to create and work with their own money. In 2012, Fugger sold the platform to Jed McCaleb and Chris Larsen, who had developed a similar idea independently. RipplePay became OpenCoin, which began development of the Ripple protocol (RTXP) and the Ripple payment and exchange network. In 2013, OpenCoin changed its name back to Ripple, since when the company has changed again to Ripple Labs and the token has become the XRP token. This is an important distinction to male – Ripple is the company, XRP is the token.
Ripple is aiming to become the world’s leading transaction cryptocurrency for banks, meaning that every time a transaction is sent between banks the XRP token is used on the Ripple platform which, they say, is cheaper and quicker than traditional banking methods. Essentially, they are looking to become the SWIFT of the modern age. Ripple has won major contracts with entities such as Santander and American Express, but, crucially, none of them are using the XRP token, just Ripple’s xRapid system. Ripple claims that using their token allows for faster, cheaper transactions, but TransferWise chairman Taavet Hinrikus has said that, in fact, Ripple’s system no better than existing technologies that they use.
Love and Hate
Ripple and XRP have many loyal followers who promote the token as often as they can on social media, claiming it will change the world of baking and will one day be worth anything up to $1,000. The reason many people hate Ripple and the XRP token is because it is a 100% premined, centralized token that aims to make the banks’ lives easier, whereas the original concept behind the cryptocurrency was to make something that was decentralized and took the place of banks. Many argue that the XRP token shouldn’t be classed as a cryptocurrency at all for these reasons. It is also worth noting that Ripple has almost 60% of the total 100 billion supply locked away in an escrow account which, presumably, they intend to release into the market someday, something else that the Ripple haters don’t like.
Ripple has also courted controversy because of their shifting position on the link between the company and the token, which seems to change depending on which aspect the SEC is investigating at the time. Ripple is the subject of several ongoing lawsuits from investors who claim they were sold XRP tokens as a security.
Not Going Anywhere
Whichever side of the XRP fence you fall, Ripple has been around for much longer than most cryptocurrencies and doesn’t seem to be going anywhere soon. It will continue to divide opinion for as long as it exists, and, at the very least, stirs some lively debate when it does something controversial.