The relationship between Ripple and its digital currency, XRP, has been the subject of much debate and confusion. While Ripple is firmly convinced that it works independently on XRP, it currently holds about two-thirds of the total offering.
Now, things have become even more complex after a recent one Tweet of Cory JohnsonRipple's Chief Market Strategist, who equated the company's relationship with XRP to the great relationship between Chevron's global energy giant and oil, a natural resource.
Ripple's relationship with XRP is like Chevron's relationship with oil. We have a lot, we believe it is superior technology and we support its many uses – for billions of reasons. But we do not have everything, we do not control it and we are not.
– Cory Johnson (@CoryTV) October 4, 2018
It is difficult to understand this comparison on some different levels.
Chevron (CVX) is not the creator of oil, but uses a number of different approaches to strategically acquire territorial resources for mining. For example, the company constantly acquires deep water leases and conducts good exploration projects in the United States and abroad. When Chevron hits oil (or gas) on these lands, they actually "control" it.
Moreover, in order for petroleum to acquire commercial value to become a "superior" good, it must go through a significant multi-step processing to produce the various end products of the company. All these activities bring with them significant operating costs, which amount to more than $ 95 billion only in 2017
Now, stating that a pre-mined cryptocurrency that is instantaneously granted value based on speculation (this qualification can be applied to most cryptocurrencies) at relatively low operating costs is equivalent to the fact that the energy industry is misled at best.
The continued lack of clarity of the Ripple team has had ramifications on a level of institutional investment, as recent poll has shown that 28% of institutions believe that XRP has the slightest sense of cryptocurrency and, in particular, none of the institutions interviewed chose it as the preferred cryptocurrency.
Related: Crypto Twitter is less bullish on Bitcoin than institutional investors
Disclaimer: the author of this article has participations in cryptocurrency that may be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct due diligence before making investments.