Ripple is one of the most controversial cryptocurrencies in the industry. You will hear a lot of people claiming that it is a scam and others claiming that it is not. Most crypto-purists out there are not fans of Ripple for good reasons. Since you are reading my post here I’m guessing you heard some of the negative talk surrounding this crypto and are wondering yourself is Ripple a scam or not.
In this short post I’ll be going over what Ripple is, why people are calling it a scam, some very “scammy” activity that is in Ripple’s past and more.
What is Ripple?
Ripple is actually the company behind the technology and the cryptocurrency that they have called XRP, which is what people are talking about when they invest in Ripple.
Unlike Bitcoin, Litecoin, Ethereum and many of the other cryptocurrencies out there, Ripple was created by a centralized authority, as I just said they are a company. However, the Ripple protocol is open-source and run by the people, which make it decentralized.
The purpose of Ripple is to be able to exchange anything of value simply and easily, such as exchanging Bitcoin for Japanese yen, etc. This technology was created mainly for banks as a way to move massive amounts of money around internationally, which traditionally takes days to happen. The XRP, which is the cryptocurrency that Ripple came out with is what is used to pay transaction fees on the network. So this is where it gets its value and this is its use.
Is Ripple a Scam?
The answer is no Ripple is not a scam at all. This technology solves a very big problem and makes it much easier for banks to move money around. And as I said, the protocol itself is open source which means that anyone can go take a look at how it all works.
However, the technology behind Ripple isn’t what people are calling a scam. Usually when you hear people calling Ripple a scam it is coming from the hardcore crypto idealists.
Why People Call Ripple a Scam
The crypto idealists out there believe that cryptocurrencies should basically follow along the lines that Bitcoin set forth. They want them to disrupt the financial industry by taking power away from the banks and putting it in the hands of the people. However, Ripple is not doing this. In fact it is doing the opposite. It is just making it easier for banks to stay operating nowadays and will ultimately give them more power than they would have without it.
Now don’t get me wrong here, I am all for the crypto’s that give power to the people. However, just because Ripple is basically working for the banks (for the most part) doesn’t mean that they are a scam.
What About It Being “Pre-mined”?
Another problem that many people have with Ripple is that was “pre-mined”. What this means is that all Ripple, or XRP, that exists today is all that will ever exist. And much of what is out there is owned by people in the Ripple company.
The fact that much of the XRP out there is owned by employees of the company brings about a major concern of conflict of interest. However, you would also argue that because they own much of it that they will continue to work hard on the Ripple project and look out for its future.
I do not like the fact that it was pre-mined but its something that you have to deal with if you are looking to get involved. On way that Ripple has tried to put people’s minds at ease is by locking up 50 billion dollars worth of XRP into a smart contract that ensures it will be released once every month for 5 years. This makes it so that you don’t have to worry so much about the Ripple company dumping all their XRP and crashing the market and also means there will be a steady flow of XRP introduced into the ecosystem for the next 5 years.
Is Ripple a Good Investment?
It depends on your stance and ideological approach. If you don’t care much about the whole “take power away from the banks” thing then Ripple is definitely worth something looking into more. They have managed to get a handful of banks on-board already and as this number grows the used of XRP will grow and the price will continue to go up, thus making you money if you are invested in XRP.
Ripple is a technology that was created with a purpose and it works as intended. Much of the banking industry is still using technology to move money around that has been used since the 70’s. It is very outdated and ineffective. Ripple solves problems with the old tech so the way I see it we should continue to see increased adoption, use, and price of XRP.
Personally I’m not a big fan of Ripple. I mean I like that it works and does solve a major problem. But I don’t particularly care for the traditional banking system and would like to see people more in control of their money. Ripple just gives more power to the banks.
If you have any questions about Ripple or have a comment about it please leave them in the comment section below…