Ripple exhibits some traits that many in the cryptocurrency community do not approve of.
Cryptocurrency purists have always judged new coins by some important factors. In addition to that list has always been decentralization. However, one of the largest coins in the cryptocurrency market has been hiding in plain sight with its centralized nature. But, its recent boom that saw it finish last year as one of the best performing crypto assets has seen it get a lot of hate.
What is causing this ripple in the market?
Ripple, a token created by the company of the same name that aims to facilitate transfers between major financial corporations. In this goal, it has been very successful during 2017 with some major banks that have partnered with it.
Despite working with central banks, it is the centralized nature that has many in arms. When the system was created in 2013, the development team removed many of the key features found in most other cryptocurrencies.
This was done so that the token could target these major financial institutions, which is fine and probably necessary, but becomes problematic when Ripple is counted at the same time as Bitcoin and other highly decentralized digital currencies.
Ripple issues its token centrally, unlike other currencies that are mined and incentivized by people who devote computing power to accumulating them.
“It is not a cryptocurrency”
Many in the community, including the creators of other currencies, have criticized the definition of Ripple as a cryptocurrency.
“For the most part, I’m not frustrated or angry with Ripple, I’m frustrated with the general lack of community knowledge these days (i.e. Ripple is a symptom, but not the problem itself),” Reddit user thieflar, a moderator of the Bitcoin subreddit, tells reverse.
“The fact that Ripple is labeled a “cryptocurrency” and included on sites like CoinMarketCap has, for the most part, been seen as misleading and inaccurate for many years, ” adds thieflar.
Litecoin creator Charlie Lee has said he does not believe Ripple should be considered a cryptocurrency.
In addition, writer Joseph Young has shared similar sentiments.
Is Ripple blocking $ 14 billion of its native “currency” to control its price?
Blocking funds itself is bad. The intention is even worse. Why?
– Joseph Young (@iamjosephyoung) May 17, 2017
Despite ripple’s mixed opinions, it still made big profits in 2017, rising 36,000 percent. This caused its market cap to push the coin into second place on Coinmarketcap for a period.
However, even this award has been criticized.
“It seems that the multi-year-long cryptocurrency bull market has finally reached a point where newcomers have been buying indiscriminately, not understanding anything about what they are buying other than ‘it’s a crypto currency so you can make money with it’ and Ripple managed to get caught up in the madness, ” thieflar continues.
Interestingly, Ripple agrees that one should not be bought indiscriminately to try to make money from profits.
“Private exchanges and liquidity providers may choose to hold additional XRP for trading. Ripple (the company) does not promote XRP as a speculative investment, ” it states in its gateway guide.