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Ripple’s previous business model, which involves close collaboration with banks and the lead role of cross-border payments, doesn’t work very well.
Santander, the Spanish bank that uses Ripple to make and settle international payments, said it will no longer use XRP, arguing that the digital currency is not actively traded enough to support Santander’s needs.
Ripple’s strategic partnership with MoneyGram also didn’t pay off. Every quarter, Ripple pays MoneyGram to use its technology. In total, Ripple paid MoneyGram $ 43 million to provide liquidity to its ODL network: In the first half of 2020, Ripple’s payments to MoneyGram accounted for 60% of MoneyGram’s operating profits.
“Ripple simply doesn’t offer anything of value,” said Dr. Craig S. Wright. “It is not an efficient settlement system, it does not remove or mitigate the need for money laundering controls and all the other controls that banks have. It’s a technology they are trying to bring into an industry they don’t understand. “
The Ripple network was born in 2004/2005 as OpenCoin Inc., not to be confused with OpenCoin.org, and in 2008 it failed. It is a digital token disguised as a blockchain. Fifteen years later, the company, which added XRP for no real reason other than to raise money using an illegal title, is still looking for its measure in the market. Banks don’t need Ripple because Ripple doesn’t make the bank’s current processes – in which they have already invested a lot – more efficient than they already are. The only reason Ripple remains positive on cash flow is because they dump millions of dollars of XRP into the market every quarter.
That said, there are rumors that Ripple is looking to move away from their current plan and expand their operations into other fields.
The Amazon of payments
According to Ripple CEO Brad Garlinghouse, Ripple is looking to become the Amazon of payments.
“Amazon started out as a bookseller and just sold books. We started with payments,” Garlinghouse said. “In two years, you will find that Ripple is for payments like Amazon was for books.”
In other words, Ripple is now looking to expand beyond the settlement of international payments and find new areas, sectors and industrial partners, where they can in reality profit from their operations. However, unlike Amazon, whose first product, books, was a success and popularized the company, Ripple’s first product, the international payment platform, went bankrupt and made the company even less. attractive to observers.
But it’s true?
After the news of Ripple’s change of plans was released, Ripple’s CEO responded quickly.
1 / My favorite skeptics are active today! (@FT @nathanielpopper) Ripple has absolutely no intention of “resetting” our strategy. Using XRP to solve a real $ 10T problem, like cross border payments, works (1/4) https://t.co/Gkf70dq7G6
– Brad Garlinghouse (@bgarlinghouse) 13 August 2020
According to Garlinghouse Ripple “has absolutely no plans to ‘reset’ its strategy because using XRP to solve a real $ 10T problem, like cross-border payments, is working.”
However, it’s clear Ripple is struggling, Garlinghouse admitted that the only thing keeping Ripple’s cash flow positive is Ripple’s quarterly sales.
In terms of the change in business plans, Ethan Beard, who manages Ripple’s developer efforts, said the company will move from “writing checks to writing code.” That said, in the future we will see fewer payments to Ripple’s partners from Ripple and we will most likely see Ripple try to create a technology that others adopt, which will be difficult for the company as their token has no use and their platforms do. do not optimize existing operations.
“XRP is simply a token created for no particular reason to exist alongside Ripple,” said Dr. Wright. “Ripple attempted to switch brands using a non-functioning chain technology that was fixed on the protocol side to make it appear that they had some relationship to technologies like Bitcoin.”
Ripple has made several mistakes in its eight years. For starters, they never needed a digital currency. Their current platform is essentially a payment gateway for banks, which can honestly exist without a coin or token. One of the biggest problems with Ripple is that no value is created on Ripple.
Unlike Bitcoin (BSV), which has an abundance of software developers, as well as applications and services that people spend their BSV on every day to make micropayments, Ripple is of no use. There are no platforms you can spend your Ripple on, and no software developer is building on Ripple. That said, Ripple’s primary use case is speculation.
When you consider that Ripple has no profitable operations other than XRP sales, it makes sense that they created the XRP token even though they didn’t really need it. Ripple knew that the only way for them to be profitable would be to hold an ICO with an illegal security token that would continually collect revenue for the company and its founders. There is no real reason to use Ripple, the world knows it, the banks know it and Ripple knows it too. That said, Ripple’s change in their business blueprint is unlikely to save them.
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