Hey guys :) Hope this post find you well.
Maybe i should have started my 'channel' with this post but you know the saying 'it's never too late' to do something :)
So here i would like to sum up the hole Ripple/XRP story and maybe some important general information answering some questions. I will try to keep it as short as possible even though there is almost infinite information about the topic almost everywhere.
So the questions i am going to address in this post are as following:
1. What is RippleNet?
2. What is XRP?
3. Who created Ripple (XRP)?
4. Who are Ripple Labs investors?
5. What is Ripple used for?
6. Is Ripple a good investment?
1. What is RippleNet?
The first thing to know is that Ripple is both a platform and a currency. The Ripple platform is an open source protocol which is designed to allow fast and cheap transactions. RippleNet is a network of institutional payment-providers such as banks and money services businesses that use solutions developed by Ripple to provide a frictionless experience to send money globally. The platform has its own currency (XRP) but also allows everybody to use the platform to create their own via RippleNet. Moreover, the platform allows to make payments in any currency including Bitcoin and have a minimal internal transaction commission of $0.00001, yes that’s the right amount of zeros. The only reason it’s not free is to prevent DDos attacks.
2. What is XRP?
XRP is a token used for representing the transfer of value across the Ripple Network. The main purpose of XRP is to be a mediator for other - both cryptocurrencies and fiat - exchanges. The transaction cost on Ripple is $0.00001. An interesting fact: after the transaction the amount of $0.00001 ‘disappears’ from the platform and can’t be replenished. It is designed that way to prevent spammers attacks.
3. Who created Ripple (XRP)?
- Chris Larsen cofounded Ripple in 2012 to facilitate international payments for banks using blockchain technology.
- Larsen stepped down as Ripple CEO in December 2016 but remains executive chairman.
- Prior to Ripple, he cofounded online mortgage lender e-Loan in 1996 and Prosper, a peer-to-peer lender, in 2005.
- In April 2019, Larsen and his foundation gifted $25 million, largely in XRP, to San Francisco State University.
Jed McCaleb is a well-known programmer and entrepreneur. He co-founded several crypto-startups, including Ripple, Stellar, eDonkey, Overnet as well as a cryptocurrency exchange Mt. Gox (he sold his share and the platform was re-coded way before the infamous hack), which at its prime was handling over 70% of all Bitcoin transactions worldwide.
4. Who are Ripple Labs investors?
- April 2013 - Angel - Andreessen Horowitz, FF Angel LLC, Lightspeed Venture Partners, Pantera Capital, Vast Ventures, Bitcoin Opportunity Fund ($ mln 2.5)
- May 2013 - Angel - Google Ventures, IDG Capital Partners ($ mln 3.0)
- November 2013 - Seed - Core Innovation Capital, Venture51, Camp One Ventures, IDG Capital Partners ($ mln 3.5)
- May 2015 - Series A - IDG Capital Partners, Seagate Technology, AME Cloud Ventures, ChinaRock Capital Management, China Growth Capital, Wicklow Capital, Bitcoin Opportunity Corp, Core Innovation Capital, Route 66 Ventures, RRE Ventures, Vast Ventures, Venture 51 ($ mln 28.0)
- October 2015 - Series A - Santander InnoVentures ($ mln 4.0)
- September 2016 - Series B - Standard Chartered, Accenture, SCB Digital Ventures, SBI Holdings, Santander InnoVentures, CME Group, Seagate Technology ($ mln 55.0)
5. What is Ripple used for?
- Low commission currency exchange. There are many currencies that can’t be directly converted to each other. So, banks need to use the US dollar as a mediator. So, there is a double commission: converting currency A to USD and USD to currency B. Ripple is a mediator too, but much cheaper than USD.
- Fast international transactions. Average transaction time is 4 seconds. Compare it to hour or more for Bitcoin and a few days for regular banking systems.
- Payment ecosystem. User can basically issue his own currency for fast and cheap transaction. For example, one can create a currency to buy and see vintage vinyls or action figures between the collectors.
6. Is Ripple a good investment?
Pros:
- As highlighted above, Ripple is an official organization with the trust of many banks - it’s not another Blockchain startup from a noname company.
- No inflation. All the tokens are initially mined and already exist.
- The more banks use it as their transaction platform, the higher the value of XRP. If one day, all the banks decide to start using it as a unified bank currency instead of processing redundant currency exchanges – it will make a nice fortune for all the early birds who invested in Ripple
Cons:
- It is highly centralized. The whole idea of cryptocurrency is to avoid centralized control. As the tokens are already mined, the Ripple developers can decide when and how much to release, or not to release. So, it is basically like investing in a bank
- In addition to centralization, today it is pretty much a monopoly as Ripple Labs owns 61 percent of the coins.
- It is open source - very smart, but still once the code is accessible there is a good chance many people will try to hack it. Some of them even might succeed.
So there you have it :) Hope you enjoyed it and talk to you on the next one :D
Like always take care :)
