I decided to take a closer look at Ripple because while almost all of the other cryptocurrencies are falling in value right now, Ripple and a handful of others are going up in value. Ripple is currently at #2 right behind bitcoin. Currently Cardano is also going up. Recently Wall Street started jumping on board which is why many crypto’s have reached record highs over the last month. Was this a pump and dump strategy organized by the big players? I’d like to know why these two assets are going up in value and whether they have anything in common.
Decentralization is not a boolean variable though. There are several questions to ask. Is there a central point of control / failure? Is the code open source? How centralized / decentralized are the mining operations? Are transactions private / anonymous / encrypted? Is it censorship resistant?
On the face of it after reading the Ripple white paper it looks like Ripple is meant to at least partially replace the Swift (and similar) network(s) of banking. Page 4 goes into how the old system of siloed networks is fractured, slow, expensive and unreliable and page 6 explains how Ripple improves transaction facilitation between banks by standardizing the protocol as it states:
RippleNet is a single, global network of banks that send and receive payments via Ripple’s distributed financial technology -- providing real-time messaging, clearing and settlement of transactions.
So already we know that Ripple is not designed to replace the banks, but enable them to continue with business as usual. But they did learn to use the “lingo” that has taken hold in the crypto community as they use the common buzz words:
RippleNet is a decentralized network based on an agreement between Ripple and network participants -- all of which utilize the same technology and adhere to a consistent set of payment rules and standards.
Bold emphasis is mine. The “network participants” are the banks. They further state:
RippleNet banks benefit from the robust connectivity, standardized technology and rich data attachments with each payment. Ripple’s distributed financial technology outperforms today’s infrastructure by driving down costs, increasing processing speeds and delivering end-to-end visibility into payment fees, timing and delivery.
End to end visibility? What does that mean exactly? What about zero knowledge proofs? What data attachments are being sent? This does not sound like encrypted anonymous transactions with zero knowledge proofs.
Page 8 talks about network participants in further depth…
Consumers: looking to send global payments through their bank or payment provider for a cost-efficient, real-time and traceable option.
OK, so we are beyond the shadow of a doubt using some sort of “FedCoin” because it has a “traceable option”. It was further confirmed on page 22 when it talks about how it complies with KYC (Know Your Customer) and AML (Anti Money Laundering) requirements of the banks. This appears to be how the banking system wants to take over the cryptocurrency landscape.
This is business as usual except that adoption of this technology will likely lead to a digital panopticon. It will probably be more secure than the current banking system which in some ways could make this worse for the rest of the world. It appears that Ripple is decentralized when it comes to achieving consensus, but that it is completely trackable and therefore may have a built in ability for censorship. I cannot confirm the latter at this point. It may just be that if you foolishly send a payment to ISIS, that the authorities will know about it, not necessarily stop the payment.
There was a former project manager (Jed McCaleb) associated with Ripple who went to set up his own venture called Stellar. Therefore I would be extremely wary of this project as well.
There's a lot of money in Ripple, there is a steady growth of interest on the coin as well. That is why people stored so much of it when it was at a low price so they can centralize it while having people work for something that the employer paid half a cent or less for.
