Cryptocurrencies

Ripples in the fabric of XRP

Ripple is having a torrid time lately with FUD clearly affecting price. But is it just FUD, or is there more to it?

By now you know I’m no fan of Ripple. I’ve openly spoken about it and against it on multiple occasions, most notably in my series: “Ripple: we need to talk” (Part 1Part 2 and Part 3).

I have warned, over and over again, that Ripple is centralised, closely aligned with crypto’s arch-nemesis (banks) and is unsustainable. I’ve stated that it can’t be defined as a real cryptocurrency. In my eyes it is much the same as JP Morgan’s own coin offering. 

I fight the Ripple battle on many fronts. It’s not a battle against Ripple itself, but rather against a prevailing attitude amongst many crypto investors that Ripple is a good place to invest. If you track me on Twitter you may have seen me engaging a few Ripple fans there. Often I engage them on Facebook too.

My intention today is not just to sling more of my opinions around, but rather to also incorporate the opinions of the greater crypto market. 

Let’s take a look at what others think of Ripple:

According to this CCN article, Ripple is performing rather sub-par in 2019, a fact which is very easy to verify for yourself: 

Not all currencies have had a great 2019, though nothing else in the top 10 can challenge XRP’s loss of over 18% for the year-to-date. The only other coin in the top 30 that has done so poorly is BSV – with a loss of over 30% (so much for fake Satoshi’s vision!). The article goes on to cite poor adoption, which is not really fair as that could be applied to most cryptos. But then it mentions the rather damning JPM coin, which I too believe may have sounded a death knell for Ripple. When you are a centralised currency created specifically for banks, but the greedy banks decide to cut you out of the loop… let’s just say that Ripple’s attempted little foray into the gaming market probably won’t be enough to offset the losses between their banking projections and banking realities. Either way, they still have a coin which has no inherent way of increasing its value, which is owned mainly by the Ripple company and which large institutions will never need to buy off small-time Mom-and-Pop investors. 

Or do they?

Do they have a coin at all?

Due to a little legal trouble (in the form of a class action suit), Ripple has denied having a coin of their own. As ridiculous as this sounds, they claim that the did not develop XRP. Instead it was all “gifted” to them:

“XRP is open source and it was not created by our company, so that existed as an open source technology. We created a company that was interested in modernizing payments and then began using that open-source tech to do so … We didn’t create XRP… What we do have is we do own a significant amount of XRP, it was gifted to us by some of the open-source developers that created it. But there’s not a direct connection between Ripple the company and XRP.” ~ Ryan Zagone, Ripple Director of Regulatory Relations

As quoted by Preston Byrne at https://prestonbyrne.com/2018/09/20/for-the-last-time-ripple-created-xrp/

If you read more of Preston Bryne’s article, you will see how he makes a compelling argument that Ripple does in fact own XRP and that it was created by them. This is true whether you look from the angle of Ripple’s forerunner owning the software rights to XRP’s forerunner, or the angle that XRP was developed after Ripple came into being and that the IP would have belonged to Ripple.

It’s also hilarious that if the original developers did “gift” them the coin as they claim, then Ripple is most ungrateful as it sued developer Jed McCaleb and forced him into a new contract in 2014. This was to prevent him from selling his share of XRP coins faster than it was comfortable with. If you can’t smell something fishy by now…

Summary: They say they don’t have a coin, but they do. Does anybody else hear the warning bells?

The ICO that wouldn’t die

I thought that the EOS ICO took a long time, and it did. But in the big Ripple legal battle, Ripple has been accused of running “a never-ending” ICO. You could argue against this on technical grounds if you wanted to, but I make a point of never confusing what is legalwith what is right. What is happening is that Ripple continues to sell  XRP. Not only do they sell it, but they boast about their sales figures!

(How loud are those warning bells getting now?)

When presented with irrefutable facts like this, one can only laugh at the attitude of those who refuse to accept it. Truly, I don’t know whether to mock them or pity them – generally I do a little of both. It’s sad to see people so doggedly loyal to a company which is clearly abusing their trust, but at the same time I find it hard to pity people that arrogant yet unenlightened. 

From Twitter.com

It’s no secret that I am a big fan of arrogance where such arrogance can be supported by a commensurate level of intelligence. With the XRPArmy, this is never true.

I take the horses to the water, but I’m not interested in drowning them if they refuse to drink. I warn and I warn and I warn again in the hopes of reaching just one new ear each time. If grown adults insist on making bad choices, then that is their prerogative.

The never-ending ICO is still running, that isn’t being hidden, Ripple just calls it “XRP sales” instead of “an ICO”. Whether they will even be able to keep this legal in the eyes of the SEC remains to be seen.

Legal or not: what kind of cryptocurrency brags about selling its coins? What kind of crypto company sits on a bag of 60% of all coins created and sells them off to hopeful but naive investors at monthly intervals? Is this really the action of a cryptocurrency? To me this reeks of old fiat money mentality! But then I’ve said it before and I’ll say it again: Ripple (XRP) is not a cryptocurrency!

The ICO that will die?

On top of all of this, Ripple is no longer the only “cryptocurrency” competing in the “centralised” market segment: I’ve already mentioned JPM coin and there is Hyperledger Fabric too. Zuckerberg has a rumoured Facebook Coin in the making, which will no doubt have one objective and one objective alone: making Mark Zuckerberg even richer at the expense of Facebook users. IBM has World Wire. In short: Ripple is being beaten at its own game by larger centralised entities which have been playing the game even longer. 

If Ripple is a snake, then it is a small snake which is now being eaten by bigger snakes.

My warning bell just rang so loud that it cracked.

Conclusion:

Markets blow hot and cold as they go through their cycles. It is hard to tell whether the dismal 2019 performance of XRP is the start of a long-term downwards price spiral, or just a temporary correction which will end soon. Regardless of what it is, the fundamentals of Ripple are looking weak enough that I hereby retract my recommendation that Ripple can even be bought for a long-term swing trade. I proposed a possible swing trade in https://mentormarket.io/cryptocurrencies/bit-brain/ripple-we-need-to-talk-part-3/ where I said:

“I do think that price will still climb and I do think that it will take a long time for the herd to realise that XRP is a very poor long-term hold. This is where the long-term swing trade that I mentioned earlier comes in – just get out before the herd does finally wise up to their mother-of-all-shitcoins!”

At this stage I consider Ripple too weak and risky to attempt such a trade. To those who still hold Ripple:

  1. I told you so.
  2. If I were you I’d be looking at the charts for a realistic sell price.

I hope for the sake of Ripple holders that price does swing upwards and that they are able to get out of XRP at a good price if they so wish. My long-term opinion of Ripple is that it will gradually fade away into oblivion.

Yours in real, decentralised crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”

~ John Maynard Keynes

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