XRP is Centralized Currency And Won’t Make You Rich

August 26, 2022

Darko Simunovski

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Let’s start with the explanation what is XRP Ledger, what is RIPPLE and what is XRP token? Is XRP centralized?

Jed McCaleb, an American programmer and entrepreneur who dropped out of UC Berkeley, originally conceived the idea for Ripple in 2011 and founded his company in 2012, initially calling it OpenCoin.

Ripple is a money transfer network designed to serve the needs of the financial services industry and banks, Ripple is planned to be a financial payment method that is very fast and cheap and the priority is to support the banks.

XRP is the native cryptocurrency for products developed by Ripple Labs and it is native token of the XRPL XRP ledger.

XRPL is used for payment settlement, asset exchange, and remittance systems like SWIFT, a service for international money and security transfers used by a network of banks and financial intermediaries. For example, if you attempt to send EUR from your account to an American USA account in USD, the EUR amount would be converted to XRP, and then XRP would be converted to USD to the receiver.

Using a private version Central Banks can use a secure, controlled and flexible solution for the issuance and management of digital currencies.

XRP uses a unique consensus mechanism in the current ledger is considered “closed” different from the more common proof-of-work and proof-of-stake. XRP works via validators, which are designated servers that must come to an agreement in order to approve XRP transactions.

Ripple maintains what is known as a Unique Node List (UNL), which lists the recommended validators to be used for validations by the nodes that run the XRP ledger, currently 129 validators are active on the ledger, operated by universities, exchanges, businesses, and individuals and most of the XRPL nodes are held by the same banks that are used by the XRP platform and Ripple Company Labs. Furthermore, it is estimated that over 60% of the tokens are owned by developers and not in the hands of exchanges and traders.

XRP tokens are “pre-mined,” meaning the XRP Ledger created 100 billion units that are then periodically released publicly and transaction fees are burned, instead of given to miners as reward.

Unlike Bitcoin, XRP does not function under Blockchain technology, it operates on DLT (Distributed Ledger) technology along with its protocol for agreement which is permissioned. This protocol is called the Ripple Protocol Consensus Algorithm. RippleNet owns most of the servers to verify and confirm transactions and most of the total supply of XRP tokens.

Why buying and holding XRP tokens won’t make you rich?

The only utility that XRP have are the fast transactions. According to Ripple, XRPL can execute transaction in 2-3 seconds.

XRP is in class of payment cryptocurrency and XRPL doesn’t support smart contracts. Other popular payment cryptocurrencies are : BITCOIN is store of value but also payment currency, Stellar (which is similar to XRP), Dogecoin, Bitcoin Cash, Dash and Litecoin which are more decentralised than XRP.

There a many cryptocurrencies that can perform fast transactions as XRP and they support smart contracts and far more decentralised, like Solana or Algorand or L2 like Harmony ONE. So that being said there isn’t any particular reason why would someone invest in XRP.

Will there be a world in need for XRP? Following this question, three more questions arises:

What if most banks develop their own ledger?

What will happen when most of the central banks begin to issue CBDC’s?

What if most banks, start using CBDC’s instead of any privately issued coin or token?

The risk run by the Ripple or XRP supporters is that eventually there won’t need for Ripple or XRP once the wholesale and retail CBDC roll out. In this given situation, why would someone invest in XRP?

Looking ahead, we’re likely to hear more news of Ripple partnering with new entities. But will Ripple achieve the dominance it needs to be the single global banking digital ledger and even if so, that doesn’t mean that the price of XRP token will rise.

Ripple owns a substantial portion of XRP tokens which is almost 60% of the total supply. Chris Larsen, the chairman of Ripple, owns almost a third of all XRP token supply, also Brad Garlinghouse CEO of Ripple, also has a considerable amount. Investing in XRP is risky, as few have most of the total supply XRP in their hands which can affect negative to its price in case of dumping (instantly selling large portion of tokens).

Why Brad Garlinghouse and Jeremy Allaire (Circle) were the only representors of Crypto industry at Davos WEF in May this year? The answer is simple, they are helping WEF agenda for more centralised world governance and world centralised payment system, where regular people will loose their independency.

On a panel discussion called “A New Era of Digital Money”, Brad Garlinghouse XRP sounded more like some banker or crypto regulator, than someone who represents crypto industry. The reporter asked Brad, what can companies do to push the agenda, where he replayed:

“Like Jeremy said, I think one of the hardest parts of actually solving this is word without permission, and I think Lucy is a very compelling solution but governments matter and we live in a world of governments are controlling. The financial systems and markets are regulated and I don’t think is going to change in my lifetime in our core financial regulations like KYC (know your customer) in the regulators here’s the expression without permission and they say no no no, I need to know and make sure that that’s not money laundering and trafficking and I think regulatory frameworks are obviously there for a reason and to protect various aspects of society, but in this context it actually is a it’s a point of friction, if we try to proceed in without permission I worry that we take one step forward two steps back”

Whe he said without permission, he meant on decentralised blockchain and DeFi, but probably his main motivation is making more money, but not the decentralisation of the financial system. Ripple are pushing hard towards centralisation and helping banks with their dystopian CBDC’s in order to give more power to central banks and control on humans.

Despite numerous marketing claims by Ripple stating its business as decentralized and making profits on that, there is a massive amount of contrasting evidence that further cements the fact that it is in fact very centralized cryptocurrency. Ripple’s XRP is centralized, and they can freeze any user’s funds, especially when asked by the government.

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