The Coinmotion Exchange, a Finland-based crypto through a blog post proclaims that Ripple (XRP) is not a typical cryptocurrency as it is not backed up by a traditional blockchain. Moreover most of its token lies in the hands of its parent company Ripple Labs, making it heavily centralized. The Finland-based exchange listed XRP few hours before on its trading platform before releasing a blog post titled as “XRP is a Centralized Virtual Currency.”
Every once in a while the news regarding XRP being a centralized commodity pops up in the crypto industry. The only difference this time is that it is being revealed by a party who is itself at stake. Coinmotion exchange has nothing to gain by publicizing these concerning facts regarding XRP.
As per the blog post, “Ripple network does not secure its transaction using blockchain. Instead, it employs a method called HashTree, the patent to which is owned by Ripple Labs. In this method, the entire lot of transactions and balances is consolidated into one single number, which is compared by servers to reach a unanimous conclusion. HashTree works at the better pace than blockchain, but is far more centralized.
Unlike real cryptocurrencies, XRP is not mined. There are around 100 billion ripple coins created so far. Ripple intends to retain half of these and release the other half on to the markets. At present, around 61 percent of the coins are retained by Ripple lab and the rest 39 percent are floating in the crypto market.
As per the blog, this excessive control of XRP by a single company is sheer monopoly which disrupts the standard principles of decentralized cryptocurrencies like Bitcoin. Ripple labs also decide the process and time of releasing new ripple on the market.
The article further suggests that XRP can still be successful despite of the fact that it is not a pure crypto. It still can be considered as a modern fintech solution.
As per the article, “It may be simpler to get into the centralized blockchain system than a decentralized one. Financial institutions and big scale companies are generally a little conservative in adapting to latest systems.”
Ripple labs have declared regarding the addition of 13 more financial institutions, by the end of January. The RippleNet now consists of a total of 200 institutions. Around the same time, Jed McCaleb stirred a controversy by declaring Tron (TRX) to be “just garbage”.
Brad Garlinghouse, CEO of Ripple Labs said that XRP is clearly centralized and he cannot control XRP’s ledger.
Coinmotion seemed to conclude the blog post by absolving itself of any responsibility in case it goes wrong. “Since you, our dear customers have requested for it, we are offering you a way to deal in XRP on Coinmotion.”