Sunday, February 23, 2020

Coinmotion Explains Why Ripple Isn’t A Real Cryptocurrency

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Babatunde Modupe
I am a freelance writer, Poet, blogger and cryptoenthusiast that is totally interested in blockchain technology and sharing it's Information with others.

The debate about Ripple’s XRP not being a decentralized currency has been on for some time now. The CEO of Ripple, Brad Garlinghouse while confronted last year with the subject stated “It is very clearly decentralized. I, as CEO of the company, can’t control the XRP ledger.”

Meanwhile, in contrast to his opinion, a Finland-based crypto exchange, Coinmotion raised the dust once again after listing it due to popular demand by users of the exchange. The exchange noted in their statement that the cryptocurrency is not a real cryptocurrency and it is also a heavily centralized token.

What Differentiates Ripple From Other Cryptos?

As clearly explained, Ripple is not based on the blockchain which differentiates it from other Cryptocurrencies. Another thing noted as a major difference is that it is not, mined like other cryptos and it is heavily centralized in the hands of the parent company. The Ripple network is noted as a suite of different applications by Ripple Labs.

Ripple uses hashtree against the conventional blockchain in use by most cryptocurrencies to secure transactions. The release stated that in hashtree all the transactions and balances are combined to a single number which serves compare to each other to reach consensus. Though this is far faster than Bitcoin, it is more centralized.

The Centralized Nature of Ripple

As earlier mentioned, the Ripple’s XRP cryptocurrency is not mined like other cryptocurrencies. In the case of Ripple, all the 100 billion Ripple XRP coins have already been created. Ripple plans to release half of the decentralized token into the market while it retains the other. At the moment about 39 per cent of Ripple’s tokens are in the open market, and 61 per cent still in the hands of the company.

Coinmotion noted that ripple has control over how and when to release new Ripple tokens to the market. This is noted as a major problem to how decentralised cryptocurrencies work. It is different from Bitcoin where everyone knows and agrees on how new Bitcoin is mined.

Ripple Still Has High Tendency To Succeed

Despite its centralized nature, the exchange noted the cryptocurrency still has a high tendency for success. Ripple has seen adoption and partnership with many financial institutions around the world. Presently the cryptocurrency boasts of partnership with over 200 financial institutions globally.

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