We are in the midst of cryptocurrency mania. We are definitely in a bubble. It is uncertain how long this bubble is going to last, but it is certain when the bubble bursts only coins with some fundamental value are going to be left standing.
I can say without reservation that ripple is a horrible coin for long term investors concerned about real value.
The ripple team has been extremely successful spreading things that are technically true but also misleading, leading people to think that it is a coin that does something that it doesn’t.
Here are the facts:
- Ripple has only issued something like half of the tokens, The ripple team holds the other half, which could be dumped on the market at any time (EDIT: It’s being pointed out that they have now placed these tokens in a time limited escrow. I’ll admit that I missed this news, but this does not eliminate my objections… It just ensures that they have a HUGE store of XRP to manipulate the price in the future – or as they say “stabilize the markets” and “incentivize market makers”, whatever that means) Frankly, to anyone who has been in blockchain for a while and is seriously considering investing in a coin that claims that huge portions of the token will be “made available for Ripple’s use” at a future date…well, it just makes me shudder. If the strategy is to replace the dollar with another “store of value” that is centrally controlled using a completely unaccountable entity buying and selling the asset in order to stabilize prices, then what’s the point?
- BANKS ARE NOT USING RIPPLE. They are using the ripple technology. There is ripple technology and there is a ripple token, and the banks are using the technology to set up money transfer services between themselves. Banks do not and will not use the ripple token.
- Ripple is not a great store of value, it is simply a money transmitting service (I mean, cmon, Ripple acts as a central bank “stabilizing” the price, as I mentioned), and therefore even if it becomes wildly successful as a money transfer service, there is very little inherent value in the token itself. People will simply obtain enough tokens to perform a transfer, and then trade those tokens back into fiat currency or a store of value after the transfer.
- It’s not even decentralized (see youtube video above). It’s not even blockchain. It’s just a network that relies on trusted peers to send money from one place to another.
Now look, I don’t know how much higher ripple could go. It’s your money, and you need to make decisions about it.
DISCLOSURE: I don’t and have never owned Ripple.