4 Myths About Ripple & XRP Crypto Coin

Ripple is basically a infrastructure technology that helps banks to perform real time settlement in payments. Ripple have its own crypto currency called XRP and it provides global financial settlement solutions to enable the world to exchange value like it already exchanges information. Ripple solutions lower the total cost of settlement by enabling banks to transact directly, without intermediaries, and with real-time certainty of settlement. Banks around the world are partnering with Ripple to improve their cross-border payment offerings. At the time of writing this article Ripple is working with 15 of the top 50 banks.

Ripple presents a long-term value proposition for all financial institutions seeking global reach. As infrastructure technology, Ripple enables banks to transact instantly and directly with any other bank partner around the world, optionally sourcing liquidity from a competitive market of third-party liquidity providers(eg: Deutsche bank, JP Morgan), with end-to-end visibility and confirmation of funds delivery. Taken together, Ripple and XRP minimize settlement risk and eliminate the need of nostro accounts around the world, resulting in a lower total cost of settlement. Let us dicuss about 3 over hyped myths about ripple in this article.

1. Ripple is centralized

Ripple says that they intentionally haven’t rushed the process of decentralization and have been making continuous progress all along during the last 4 years of its existance. Ripple aims to diversify the validator ecosystem to further increase resiliency and robustness to meet the growing demands of their customers. As per ripple, they plan to bring in decentralization of XRP ledger in two methods

a. Diversify validators on XRP Ledger.
In order to maintain future network reliability and mitigate the risk of a single point of failure, XRP Ledger has to securely run without depending on any one entity. Today, XRP Ledger has 25 validator nodes running, but continuing to grow and diversify this list of recommended validator operators is a priority for us. 


Diversification means a variety of identities, geographic locations and software platforms, all of which will further mitigate the risk of a single point of failure. As more validators join XRP Ledger, their performance will be monitored against a specific set of criteria, including their consensus agreement rate, uptime, verification of identity etc.

b. Add attested third party validators to Unique Node Lists (UNLs).
Currently, Ripple provides a default UNL configured with validating nodes operated by Ripple. They plan to systematically replace these nodes with attested third-party validating nodes. Over the course of the next 18 months, for every two attested third-party validating nodes that meet the objective criteria mentioned above, ripple will remove one validating node operated by Ripple, until no entity operates a majority of trusted nodes on the XRP Ledger. This is basically aimed to avoid the classic 51% problem. 


This is bit catchy as it won't be like any one who wants to join can join the network as a node. We should keep a fare minimum expectation that this third party entities can take independent deceision and not influenced by ripple. Microsoft, CGI, Bitgo, gatehub are some attested third party validators working with ripple now.

Technically  XRP Ledger would need just 16 trusted third party validators to match with bitcoin. Ripple promises that eventually XRP Ledger will not just meet, but exceed the decentralization level of other public blockchains.

1. Ripple supply is unlimited

What makes ripple from other crypto currencies is that, all the coins are minted initially. XRP is actually a deflationary cryptocurrency, which means that a small amount of XRP is permanently shredded after each transaction. So as time goes the supply of XRP will actually shrink, making it even more valuable over a period of time. 

Also to alleviate the fear of investment community that ripple can sell their 60 billion XRP holdings, ripple decided to put 88% (approx 55,000,000,000 XRPs) of those tokens they own into escrow smart contracts for a period of at least 4.5 years. 

The structure of it means we dont need to worry about Ripple flooding the market (not more than 1 billion) by selling their own XRP holdings. Every bank that gets associated wit ripple has to buy XRP for forming the smart contract which technically become inactive for trading purpose.

Supply Figure as of June 2017
  • TOTAL XRP HELD BY RIPPLE: 6,70,43,57,069
  • XRP to be placed in Escrow: 55,000,000,000
  • Total XRP Distributed: 38,29,02,71,363
We’ll use Escrow to establish 55 contracts of 1 billion XRP each that will expire on the first day of every month from months 0 to 54. As each contract expires, the XRP will become available for Ripple’s use. You can expect us to continue to use XRP for incentives to market makers who offer tighter spreads for payments and selling XRP to institutional investors.

We’ll then return whatever is unused at the end of each month to the back of the escrow queue. For example, if 500M XRP remain unspent at the end of the first month, those 500M XRP will be placed into a new escrow account set to expire in month 55. For comparison, Ripple has sold on average 300M XRP per month for the past 18 months.~ripple

3. XRP is over inflated

According to etar Zivkovski, COO of cryptocurrency trading platform Whaleclub, Big money is betting that Ripple will power bank-to-bank and bank-to-consumer international money transfers in the future. Remittance alone is a $500bn per year market and Ripple has made great headway into it by partnering with major banks.The global foreign exchange market does approx $5.5 trillion per day in fiat transactions. The size of XRP today, looks like peanuts when compared to the potential of remittance market.

4. Ripple is not well received by market

As of today Ripple is working with 15 of the top 50 banks. The number will surely go up in coming days as IMF has urges central banks to study digital currencies last week. Since ripple being the only enterprise level settlement platform available on blockchain, this development seems to be a great push of more ripple adoption
According to Gartner report, business value-add of blockchain will grow to nearly $176 billion by 2025, and then it will exceed $3.1 trillion by 2030. Since Ripple is the only enterprise-ready public blockchain at this time, I believe it can corner a "not so bad chunk" of it which is enough for xrp price to go further a long way!!.

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