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Ripple is a very popular and recognized company in the cryptocurrency sector. It has been on the market for several years and has expanded all over the world. The Virtual currency XRP it has also reached the second position in the market surpassing Ethereum (ETH) and has proved to be very resistant compared to others.
However, there is still uncertainty surrounding this cryptocurrency. The US Securities and Exchange Commission (SEC) did not provide information on whether XRP is a security. However, the SEC went after the other ICOs accused of selling unregistered securities.
One of the things that are taken into consideration is the ability to decentralize Ripple and the XRP network so that it is not considered a security. This was proposed by William Hinman of the SEC during Yahoo! Financial summit some time ago.
He said there could be other decentralized networks and systems where it might not be necessary to adjust tokens or coins. Although he shared his personal opinion, this is one of the closest things that the market has in relation to how decentralization plays an important role when assessing whether a token is a security or not.
If XRP is able to become fairly decentralized, it may be possible to avoid being considered a security.
James Park, in a report for the Lowell Milken Institute, explained:
"In order for a utility to be freely distributed without regulation from securities laws, it must be functional, but many utility tokens are functional only if they are distributed enough in such a way as to create a decentralized system."
In addition, there were many Initial Coin Offerings (ICOs) who described tokens issued as utility tokens. However, this is something that has been abused by ICOs in order to receive more funds.
Most of these ICOs did not work properly on a platform. What utility can these tokens have if there is no platform? XRP, on the other hand, was created to work on a platform that is already running and that continues to expand worldwide. It can be used to make purchases, payments and even from companies to obtain liquidity when making cross-border transactions.
Bitcoin (BTC) and Ethereum (ETH) have been described as cryptocurrencies with large communities and many companies working together. Hinman showed that these two cryptos were decentralized. However, Ripple raises some concerns as the XRP depends on what Ripple does very importantly. However, things are changing. There are other companies like Omni or Coil and also some individual developers who are working to increase and facilitate XRP payments.
The advocates of the ripple also say that the Bitcoin miners are completely centralized in China and that the network is not decentralized. Despite this, Bitcoin was considered a commodity.
It is also important to note that Coinsource's Deputy General Counsel, Max Rich, said he is putting his strength in dealing with recent platforms rather than old ones. Although this does not mean that Ripple can not be investigated, it allows the company to continue decentralizing its network.
However, a centralized entity needs to make a network decentralized. This is something that some people call Hinman's paradox. Ripple it remains centralized in many ways because there is an incredible amount of it XRP on the hands of Ripple, even if kept in escrow accounts. But the future could be bright for this network if the team behind it is able to push forward the decentralization.
The XRP remains the second largest virtual currency with a market capitalization of $ 12.99 billion. Each XRP coin can be purchased for $ 0.31.
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