Ripple has been among the top 10 most popular cryptocurrencies for years. It has remained relevant despite the ongoing controversy due to its unique approach to digital money and the overall goal that the organization behind Ripple aims to achieve. Converting your BTC to XRP might be something to take into account, but we’ll let you decide whether that’s a smart move after reviewing Ripple in detail in the following piece.
Let’s see what Ripple is, how it works, and what controversies surround it. Read on.
What Is Ripple?
Ripple is a company that seeks a more energy-efficient approach to cross-border payments. This makes it one of the main competitors to Bitcoin and other decentralized blockchain-based digital currencies. The company was founded by Jed McCaleb, Arthur Britto, and David Schwartz in 2012. They also created the cryptocurrency native to Ripple, referred to as XRP.
Ripple was also upgraded with XRP Ledger (XRPL). It is a platform that allowed an open-source, decentralized, and permissionless approach to finance. On top of that, it made Ripple one of the fastest transaction mediums in the world, with transactions settling in less than five seconds. The fees are extremely low ($0.0002), and the entire crypto is exceptionally scalable, with up to 1,500 TPS (transactions per second) throughput.
In short, XRP is a cryptocurrency, just like Bitcoin. Meanwhile, XRP Ledger is used by developers who aim to solve some ongoing challenges with digital currencies. Some of the applications of XRP Ledger are tokenization, payments, stablecoins, DeFi, and CBDC.
Despite all the advantages, Ripple has been facing some ongoing issues. Most of them are related to centralization.
Why Is Ripple Considered Centralized?
Ripple is considered a centralized cryptocurrency. The reason — the supply and issuance aren’t controlled by users or algorithms but rather by a few people in charge. Simply put, the infrastructure that Ripple operates on is considered a centralized one. That’s something that has been the main concern for many crypto owners who believe decentralization to be the main benefit of cryptocurrencies.
In some sense, this is a good thing, as long as the people in charge don’t have malicious intentions. To become a validator on the Ripple network, you must be trusted enough to be admitted to Ripple’s Unique Node List.
On the other hand, the cryptocurrency itself (XRP) isn’t 100% centralized. Simply put, if Ripple as an organization ceased to exist, XRP would continue to function, just like Bitcoin. Still, that’s a reason good enough for some issues.
The centralization issue was never a significant one, although it was subject to a few controversies.
Recent Controversial Comments on Ripple
Eric Larchevêque, one of the co-founders of XRP Ledger, has recently posted a TikTok clip, claiming that XRP cannot even be considered a cryptocurrency due to the high level of centralization, placing it in the lowest tier of crypto, along with Terra. The XRP community instantly reacted. Larchevêque immediately tried to downplay his comments with a series of clips, claiming that it was all done in a tongue-in-cheek fashion. He added that his clip was blown out of proportion and that XRP has evolved a lot over the past couple of years.
Truth be told, the team behind XRP has been actively working on addressing the centralization issue. They are trying to ensure that the crypto progresses more toward decentralization.
Should You Invest in XRP?
XRP is one of the most successful cryptocurrencies in the world. The team behind it has been working hard on promoting and upgrading the crypto and everything surrounding it. Buying it might be a good idea long-term, but you’ll have to accept that there will be unforeseen obstacles on the road, most of them related to the fact that Ripple is centralized. If Ripple doesn’t attract you, you can always consider buying and swapping other similar cryptos, such as USDC and SOL, which you can exchange here — https://godex.io/exchange/usdc-to-sol.