CRYPTOCURRENCY

The Problems With Ripple

Possible classification as a security, a number of lawsuits filed against it as well having lost five-sixths of its token value. Ripple is certainly at the edge of things. The coin is also losing its share of the enthusiastic following, some with the allegations that the cryptocurrency has lost its grasp of the crypto financial world. The puzzle occurred as a result of investor’s awareness of the long-term effects of Ripple’s over-reliance on banking partnerships. Investors have high doubt of even benefiting from the deals and if any benefit, they are all afraid it might be meager. Most Ripple investors and enthusiasts have it that Ripple has no business with traditional banking owing to the fact, and unlike most cryptocurrencies, that it is centralized.

The decisions at Ripple are likely to have a long-term implication on the cryptocurrency’s financial standing. Especially the number of investors in the network is expected to crumble down resulting in a downward valuation of XRP. Experts believe Ripple lacks any direct relationship with meddling into traditional financial institutions that are characterized by massive government control or by Central Financial Institutions. It is likely the very banks that Ripple is partnering with will be the reason for its downfall. Take for instance if the banks decide to use Ripple’s digital tokens to cut down costs. The possibility of a government bid is also evident in the air.

The Raw Facts About Ripple’s Decisions

The coin, which has attracted the nickname, ‘the banker’s coin,’ contains distinguishing qualities that set it apart from the rest of cryptocurrency. The Ripple sphere is all about efficiency, speed, and a more banker-oriented approach. It is this sphere of influence that inclines it towards institutional money. The valuation of the company is also high, but the stakes are backed by a multi-billion dollar valuation of XRP tokens. It is merely impossible for the banks to acquire a controlling stake at Ripple; therefore, risking to lose XRP loyal followers is a dark decision that could trap the blockchain before the end of the tunnel. Some investors would say that the banks would rather build their blockchains than accept an $8 billion bid to control another cryptocurrency.

Ripple’s Protocol Challenges

Blockchain developers identified a serious problem with the Ripple blockchain protocol. Crypto enthusiasts were concerned that Ripple had a trust problem because of its transparent ledger. Unlike Bitcoin validation where the miner is rewarded, Ripple based this as the validator’s core duty to preserve and protect stable network operations. The meaning of this is that a validator gets nothing for putting effort into the system. As much as the network maintains a transparent public ledger, it is right forth to dismiss Ripple from the cryptocurrency world because a crypto ledger should be a secret ledger.

Final Thoughts

It is evident to some extent that crypto investors are always not attracted to collaborations with banking institutions. Partnering with banks therefore could not be a big problem for Ripple was it not for the massive resistance staged against traditional banking by the crypto community. The community would, therefore, draw away their opposition from Ripple and this would significantly affect its price negatively.

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