Crypto traditionalists have always assessed new coins based on a couple of important factors. Decentralization has always been on top of the list. However, one of the biggest coins on the cryptocurrency market stayed unnoticed with its centralized nature. It managed to gather a lot of enemies after the recent growth that made it one of the best performing cryptocurrencies out there.
Ripple is a company behind this coin. The main objective of this token is to facilitate the payments between large financial corporations. Ripple had a lot of success in this field last year, cooperating with several large banks.
The centralized nature of Ripple brought many complaints from the crypto community. When the system was created back in 2013, the development team removed many key functions that can be found in the majority of other cryptocurrencies.
This move was necessary in order to shift Ripple towards the major financial institutions, but it becomes problematic when you try to look at Ripple the same way bitcoin and other decentralized digital currencies are looked at.
Ripple emits its token in a centralized way, contrary to other coins, which are mined and encourage people to own computer power in order to earn coins.
Many people in the crypto community, including creators of some other coins, explained that the nature of Ripple is like the nature of other cryptocurrencies.
A Reddit user called thieflar said: “In most cases, I am not frustrated or angry at Ripple, I am frustrated by the general lack of knowledge in the community these days (Ripple is a symptom, not the problem itself).” He added: “The fact Ripple is marked as a cryptocurrency and listed on sites such as CoinMarketCap, in most cases is seen as incorrect and imprecise for many years now.”
Charlie Lee, the creator of Litecoin, said he does not believe Ripple should even be considered a cryptocurrency.
Despite different opinions, Ripple achieved large growth last year and its price went up 36,000%. Ripple’s coin, XRP, was the second coin on the cryptocurrency market for a while, in terms of market capitalization.
The same Reddit user we mentioned before also said: “It seems that the perennial growth of the cryptocurrency market reached a point at which new users are buying non-selectively, without understanding what they are buying except that ‘it is a crypto coin, which means you can make money with it;’ And Ripple succeeded in getting caught up in the mania.”
Ripple agrees with the idea that it should not be bought randomly, trying to make money fast. The Ripple’s manual says: “Private exchanges and liquidity providers can choose to keep extra XRP for trading. The company does not promote XRP as a speculative investment.”