By Christopher Frampton
I was asked to do a technical analysis of the XRP token and I found the status is more of a fundamental issue. For me I have always had great respect for Bitcoin, I used to mine it and heat my home with the Antminers but there was always the issue of the integration into daily-use transactions. The complexity issue, as the ledger gets longer and longer the time it takes to process, mine, and confirm any transaction becomes more difficult. Furthermore, the leader for bitcoin has undergone some forks in the development of the blockchain. XRP can not have this problem because the cryptography is trusted within a closed network.
First, let me copy and paste from the site https://ripple.com/xrp/
The ledger is maintained by independent participants of a global “XRP Community,” of which Ripple is an active member.
Independent validator nodes come to an agreement on the order and validity of XRP transactions. This agreement, called consensus, serves as a final and irreversible settlement. The ledger reaches consensus on all outstanding transactions every 3-5 seconds, at which point a new ledger is issued. Anyone can be a validator, and active validators on the ledger today include universities, exchanges, and financial institutions. There are currently 36 validators, and Ripple runs 6 of them—16%.
XRP consistently handles 1,500 transactions per second, 24×7, and can scale to handle the same throughput as Visa.*
*Source: 65,000+ transactions per second, as of July 15, 2019
So in my words, this is a more sophisticated version of the SWIFT system that the Federal Reserve has used for decades.
A payment system that has been in place for the dollar since 3 May 1973
Many crypto speculators see the low price and think this will attain large gains. This token has many benefits over the initial blockchain technology and proof of work or proof of stake validation methodologies. Having a simple distributed ledger with independent validation nodes that are synchronized allows the token to be used for remittances and purchases in just a few seconds. If this could be adopted it would potentially rival the status quo with a new competitor whose system is far better than the typical Federal Reserve clearing of 2 business days for settlements. Furthermore, the wallets that contain and calculate the exchange rates for XRP are in a way the removal of a bank altogether. Thus cutting out the middle man. According to Findings from Ripple’s Blockchain in Payments Report 2018:
“The Boston Consulting Group (BCG) puts the size of the global market for cross-border payments volume at $27 trillion. Another $20 trillion in growth could be up for grabs between 2018 and 2026.”
It is no surprise as I speculate, that the Central Bank in the United States will not want this and will use a federal agency like the SEC to file suit and try to get the court to declare that the XRP is a security. No position has been made on if Bitcoin or Ether are securities. I believe that XRP will not be considered a security. If I was the judge with a fair unbiased mind I would look at the corporate charter of the company that made and patented the first use of XRP and if the inception of the technology was the result of corporate activities operating within a charter in the jurisdiction of the SEC ie. the United States. The answer to that is yes and in the year 2012 however, it was always distributed open-source protocol and not proprietary. Therefore XRP technology is not the property of one corporation but of the collective volunteers whose club contributed to it. How can a court claim that Ripple is issuing security without registration when the value was not determined by the corporate structure of Ripple Inc.
It is in fact only created by engineers and technicians that built it. Additionally, Dugan Bliss, senior trial counsel at the U.S. Securities and Exchange Commission, is seeking the court’s permission to withdraw from the Ripple case. I advise you to hold your XRP and buy more. Even if XRP becomes illegal in the US that won’t stop people from using it. Only Ripple Inc. holdings of XRP could be captured but that can not necessarily affect the other %86 of the nodes that XRP is running on. As for the class-action lawsuit, according to CoinDesk, some of the lawsuits are even asking the company to pay 167.7 million in damages, which is a small price to pay to enter a 27 trillion market with only a few competitors. This my friend is just as untouchable as bitcoin. It could be the one world currency of the future. I have only scratched the surface on this one. I don’t know but, my next question is, Is XRP impervious to inflation and monetary manipulation policies?