https://blog.bitmex.com/the-ripple-story/The Ripple story
FEBRUARY 6, 2018BITMEX RESEARCH
Abstract: In this piece, we briefly look over the history of Ripple and examine various disputes between the founders and partner companies, typically over control of XRP tokens. We then explore elements of the technology behind Ripple. We conclude that the apparent distributed consensus mechanism doesn’t serve a clear purpose, because the default behaviour of Rippled nodes effectively hands full control over updating the ledger to the Ripple.com server. Therefore, in our view, Ripple does not appear to share any interesting characteristics with crypto tokens like Bitcoin or Ethereum, at least from a technical perspective.
Conclusion
Much of this report has focused on disputes, primarily related to control over XRP, including accusations of theft. Perhaps such disputes are not particularly unique, especially given the rapid, unexpected growth in the value of the ecosystem. In fact, this story of the disputes might not be too dissimilar from that of some of the large tech giants mentioned in the introduction to this piece.
More significant than the disputes is the fact that the Ripple system appears for all practical purposes to be entirely centralised and is therefore perhaps devoid of any interesting technical characteristics — although this does not mean that Ripple or XRP is doomed to failure. The company has significant financial capital and has proven somewhat effective at marketing and forming business partnerships, and perhaps this could mean the company succeeds at building adoption of the XRP token either among businesses or consumers. If so, the points that Bitcoin critics often raise may be even more pertinent and relevant in the case of Ripple. These points include:
The lack of inflation is a naive economic policy.
The price of the token is too volatile and speculative.
Regulators will shut the system down if it becomes popular.
Perhaps most importantly, why not use the US dollar? Banks will build competing digital systems based on traditional currencies (if they don’t exist already).
The real mystery about Ripple is that, given the large market value of the system, why are all the Bitcoin critics so silent? Perhaps the answer to this question is just as applicable to some of Bitcoin’s proponents as it is to its critics. Most people seem to judge things on what they perceive as the culture and character of those involved, rather than on the technical fundamentals.
