Highly centralized ripple (XRP) to Contagion not to Cryptocurrency – Crypto.IQ

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The War On Shitcoins Episode 5: Ripple (XRP). The war on shitcoin is a series of Crypto.IQ that targets and breaks down cryptocurrencies that are not worth investing in either because they are scams, have serious design flaws, are centralized or, in general, are simply useless copies of other criptovalute. There are thousands of shitcoins who are ruining the markets and Crypto.IQ intends to expose them all. The crypted space needs an exorcism and we are happy to provide it.

At the moment, Ripple (XRP) is classified as the number two of cryptocurrency on CoinMarketCap with a market capitalization of $ 12.2 billion. However, when you dive into the real technical details of Ripple, it is clear that XRP is not a cryptocurrency. XRP has no blockchain. Rather, it depends on a centralized system of distributed registers known as the Ripple Consensus Protocol. XRP has an integrated account lock function that most users are unaware of. The supply of XRP, and therefore of the XRP market itself, is highly centralized. Based on all this, Ripple (XRP) is clearly a shitcoin, and its place near the top of CoinMarketCap's list is misleading.

For starters, there is a total of 100 billion XRP, with 59 billion XRP under the centralized control of Ripple Labs and 41 billion XRP in circulation. All the 41 billion XRPs in circulation have been bought by Ripple Labs, with a small sum that is donated to charity each year, maybe so Ripple Labs does not have to pay its entire tax. Every month, Ripple Labs sells up to 1 billion XRP, which is issued by a warranty contract. This leads to constant downward pressure on the XRP market and leads to a much higher inflation rate than usual for XRP compared to other cryptocurrencies. This fact alone makes XRP a bad investment choice. There are much better and more decentralized cryptocurrencies on which to invest than they are not subject to a clear manipulation of the market.

Another way to see it, which makes the dreadful situation in the XRP market quite clear, is that the market capitalization of XRP is $ 12.2 billion, but Ripple Labs holds $ 17.7 billion of XRP. Therefore, Ripple Labs holds more XRP to aspire to the completely dry market. Furthermore, there is no evidence that Ripple Labs simply can not print more XRPs.

Centralized market conditions for XRP are a serious problem, but the centralized nature of the Ripple Consensus Protocol is even more worrying. No blockchain is involved, but it is a group of servers that validate each other. BitMEX Research has investigated this problem and found that Ripple Labs controls servers. This makes the Ripple and XRP platform 100% centralized and users need to rely on Ripple Labs. This is the opposite of the decentralized decentralized blockchain that powers Bitcoin.

In addition, the Ripple Consensus Protocol has a powerful account lock function, which is incorporated for regulatory compliance. This means that Ripple Labs can block any Ripple account. This was done so that they did not get into trouble with the government, which is quite serious because it means that the government can ask Ripple Labs to freeze user accounts. Even worse, Ripple Labs exercised this power to freeze accounts in at least one case for their motives and ended up being illegal.

One of Ripple's co-founder's sons, Jed McCaleb, sold $ 1 million of XRP on Bitstamp, in an arrangement that was organized with Ripple Labs. After the agreement was completed and Ripple Labs acquired the XRP, Ripple Labs proceeded to use the account lock function to seize the USD. Bitstamp took this case to court, and it was determined that Ripple Labs should unlock the money and pay all legal fees. The case turned out to be even fatter than expected as this particular sale of XRP aimed to manipulate the price of XRP by setting the XPP selling price too high.

Just to show how centralized XRP is, one of Ripple Labs' founders, Jed McCaleb, received 9.5 billion XRP when the currency was first created. McCaleb was virtually forced to leave the company, and he continued to sell about 2 billion XRPs before his account was frozen. A long legal battle followed in which Ripple Labs attempted and failed to get back the XRP, and it was finally decided that McCaleb had to donate 2 billion XRP to charity and is able to sell only a small part of his XRP to the # 39; year.

If one of Ripple's main founders can not even use his XRP as he wishes, how can anyone else expect to have full control over their XRP? The reality is that no one has full control over their XRP holdings as Ripple Labs may freeze their account at any time. This is the equivalent of Satoshi Nakamoto who froze his Bitcoins after he left the development team, which is fortunately impossible.

It is clear that Ripple (XRP) is not a cryptocurrency, but in reality it is only a balance in a centralized registry system 100% controlled by Ripple Labs. Because the Ripple Consensus Protocol runs on a centralized set of servers, there is no technology barrier to change the rules. Yeah, it's quite profitable for Ripple Labs since Ripple Labs controls most of the supply and can block anyone's account. Probably they will not change the rules.

It is absolutely disconcerting that some cryptocurrency users think that Ripple (XRP) is fantastic and defends it despite all its problems. XRP is absolutely set to fail because it has a single point of failure: Ripple Labs. Currently, Ripple Labs is engaged in an intense legal battle to determine if XRP is a security, although obviously it is a security.

The only thing to postpone the SEC announcement that XRP is a security is the well-paid legal team of Ripple Lab. When the SEC eventually cracks on Ripple Labs, it could be historically harsh, since the SEC has the ability to retroactively penalize Ripple Labs for all its unregistered and unsigned security issues since it was launched. The XRP is the equivalent in terms of cryptographic space of the really contagious athlete's foot that has infected the whole family, and the SEC has a large Lotrimin tube that can use XRP at any time.

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