XRP Becomes Second Largest Breathing on BTC Neck, ‘Security or Not’ Story Continues

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by Teuta Franjkovic · 5 min read
XRP Becomes Second Largest Breathing on BTC Neck, ‘Security or Not’ Story Continues
Photo: Pavlos Giorkas / Flickr

Ripple, the company that stands behind XRP, has definitely positioned itself strongly during the last few months as one of the most important companies for the crypto sector as well as the whole blockchain technologies scene.

Last few weeks have been really good for the valuation of XRP token, which even surpassed Ethereum (ETH) and became for a little while the second most important cryptocurrency on the global crypto scene.

Cory Johnson, Ripple’s Chief strategist says that the reason for Ripple’s popularity is much more than just a propaganda. In a recent interview, he claimed that, while Bitcoin is built with “poor technology” according to current standards, the development of XRP surpasses it in many respects.

He says that Bitcoin is not as fast as XRP. And while Bitcoin is able to process between three to six transactions per second, Ripple can perform 1,500 transactions per second at all times. Moreover, while Bitcoin has to develop a second layer solution for its scalability issues, Ripple’s network is able to scale and handle the same amount of transactions as Visa. In that case, Ripple would be able to perform 50,000 XRP transactions per second.

He also confirmed that there are already many companies using XRP for cross-border transactions, whereas far fewer are using Bitcoin or other digital assets at this time.

For Mr. Johnson, another problem in which XRP turns out to be a better blockchain is related to the energetic efficiency:

“Mining is increasingly expensive … and consumes power … And also the way it [ineffectively distributes] power to the miners … presently, 80% of all bitcoin is being mined in China … XRP does not have mining.”

XRP has itself come under attack for being centralized, as the currency has been entirely pre-mined and is controlled by Ripple. Many other coins, such as Bitcoin, do not have this problem but as Johnson pointed out, there are other ways to be considered centralized.

In his Tweet, Johnson referred to Stellar, a project developed by a former member of this company that competes directly with Ripple’s technology solutions. While acknowledging the preparation of its CEO, Jed McCaleb, Mr. Johnson did not elaborate about the project:

“Stellar was created by one of the founders of this company, one of the original creators of XRP. I don’t really have an opinion about it. I mean, he is a super smart guy, but in order to build a really big business that uses digital assets, it’s a challenge. There are a lot of companies developing on XRP, I don’t know if many developing on Stellar Lumens other than Stellar.“

The thing is, Ripple now has contradictory statements related to the company’s 2013 and 2018 posts. In 2013, Ripple Labs stated that they created the total 100 B XRP supply while today the organization says the opposite. It seems that Ripple could be changing their stance on key statements due to the fear that the SEC would consider XRPs as securities.

Is Ripple Really a Security?

According to an archived version of Ripple’s website, the company had stated back in 2013 that they had created the 100 billion XRP that’s in circulation today. Furthermore, the 2013 version of Ripple’s site reports that a group of programmers at Ripple Labs “invented” Ripple and released the beta version of the software in 2013, which was made open-source.

“Ripple Labs is the creator of Ripple. We developed the protocol and its distributed payment network, and we now work to support and promote its growth,” the company states in an early version of its whitepaper.

“100 billion XRP was created with the Ripple protocol. Ripple Labs plans to gift 55 billion XRP to charitable organizations, users, and strategic partners in the ecosystem over time. The company will retain a portion with the hope of creating a robust and liquid marketplace in order to monetize its only asset sometime in the future.”

On the contrary, on the current version of the company’s website, Ripple states that they didn’t create XRP:

“Ripple, the company, didn’t create XRP; 100 billion XRP was created before the company was formed, and after Ripple was founded, the creators of XRP gifted a substantial amount of XRP to the company.”

The Block founder and CEO, Mike Dudas tweeted:

“It is no longer cool for a centralized entity or company such as Ripple to be associated with the issuance of a cryptocurrency such as XRP, as that may cause the SEC_Enforcement team to become interested.”

In June, together with Cory Johnson, CEO Brad Garlinghouse stated in interviews with CNBC that XRP can’t be considered as a security:

“We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law. We’re 100 percent clear; it’s not a security. We don’t meet the standards.”

Ripple has recently presented the world its new mocking ad, which demonstrates how long does it take in our high-tech century to transfer money across the world. The ad shows that, according to the current financial system, which does not keep up with the latest trends of today’s fast-moving world, it is easier and quicker to get on a plane and deliver cash to the destination on one’s own, than to make a cross-border money transfer via a traditional bank. At the end of the video, Ripple is presented as the best solution to the problem.

To learn more about XRP coin, Ripple company and their innovative solutions, please check out our awesome guide.

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Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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