No. Ripple is not actually a real cryptocurrency. Though it shares some features with cryptocurrencies it is, I am afraid, not a real cryptocurrency in my view. I should explain.
Firstly, ripple does not have its own blockchain. A blockchain is the basic structure of any cryptocurrency. For instance, even though Fiat currencies are printed by a government, it is not money in itself. The cash in USD or EUR we carry in our wallets or what we deposit or withdraw from a bank is money because it is issued by a central authority and all cash currencies are mostly supported by gold reserves. The cash is thus a tender. If, for instance, you start to doubt whether the cash in your hand is really as valuable as it says, technically a person can always exchange it for its value in gold. Gold has intrinsic value. A pound of gold will always be as valuable but a currency note only holds value according to inflation. So when your grandpa told you that in his days he could buy a hundred things with his currency note and you can barely manage your basic expenses today with the same currency note, it is because you are a victim of inflation. But if your grandpa had given you a pound of gold, you probably would have been able to buy as many things with that pound of gold as your grandpa did and maybe the latest iPhone too. So with gold you are much better off than your grandpa could have imagined.
Similarly, cryptocurrencies do not have any intrinsic value like gold holds. This will probably remain true for many many generations to come.
So what makes a cryptocurrency a cryptocurrency. It is basically how we account for it. Like Fiat currency a cryptocurrency is very useful. We can carry a lot of it in comparison to carrying gold. Cryptocurrency is real money because it is accountable. That is there is a record of it being kept, like tiny gnomes or Santa's elves who work tirelessly to record every exchange we make. That record keeping or blockchain gives all economic activity intrinsic value. It is so good and accurate that actually an infinite army or gnomes or Santa's elves would not be able to record such transactions with this level of detail.
A simple example why a blockchain is really cool is that it is like a graph line of all economic activity. For instance, IBM is using blockchain technology to make food supply chains smoother. Theoretically this does not only tell a consumer exactly when and where his food was grown but he or she can also trace how the potatoes on his plate travelled from Egypt overnight in a plane to an airport in England and how from the airport it reached a particular supermarket and after how many days did it have to sit on a shelf till it was picked up and cooked into delicious mash. This is the power of blockchain and ripple has no such connections.
What Ripple does actually have is a gateway system, where all transactions are recorded. But there is no blockchain. And Ripple is mainly being used as a medium to send money between banks. This in itself has amazing utility because conventional bank transactions are expensive. And overseas banking transactions are exorbitantly expensive.
Basically Ripple is an intermediary for banking transactions which are trustworthy. There is possibly a good system that governs it. It is useful. There is an intrinsic value also to this system. But this is not a cryptocurrency.
For instance, have you ever heard your parents talking in a suspicious language which you can almost understand but do not. And later you find out that your parents were actually discussing a late night for themselves or planning to send you to a summer camp you did not want to go to. You realise your parents use this language and seem to make many decisions in your life without you ever apprehending even a hint of it. And now let's say you grow up and learn that if you have to talk secretively in front of people you can put the letter 'p' with every vowel sound in every word and you can talk about anything without people catching on. Would you call this p-language a new language? No
Children twist words to make their own codes. Gang members have gang signs. Even the Cosa nostra had its own terminology for putting out hits collecting money etc but none of these language usages are actual, distinct or new languages. Ripple basically used codes and stuff to send information and keeps ledgers about transactions but it does not become a cryptocurrency itself. Other than send money between banks it will probably never find another real world usage because it does not have the legitimacy of autonomy that can be provided by a blockchain.
Further, and this is the part that I love best, Ripple to me sounds like a Hawala Scheme. In the ancient times Hawala transactions were kept by traders who travelled between different ports and a person living in one city could send money to another port by depositing money with a trusted source at his port. That trusted party will make a LEDGER about all the deposits he received and will give that ledger to a sailor, who will take that ledger only with him to the next port. He will give the ledger to the trusted party on that port and if the ledger says that such transactions have to be made to such and such persons that trusted party will not only give those deposits away but may collect money from others who have had to send money to the previous port. This is basically how Ripple works too.
Without the ledger that the sailor carries, sending money from one port will be risky. Even if the sailor hired the best security to protect him there is always the vagaries of weather that could wipe out anyone's fortune being carried on a ship.
Ripple thus has utility but no intrinsic value because it does not record transactions like a blockchain. And without the blockchain its status as a real cryptocurrency is only as good as a p-language or a gang sign that is used by a group of people.
Does this affect its role as an investment potential? Yes very much so. I don't think Ripple will be able to scale the heights that people expect it to. Ripple is not unique information. It is merely an accountants book. Yes, it is necessary and useful but it is not a currency that is going to go out there and become a Dollar or Euro.
