Ripple’s Chief Technology Officer (CTO) David Schwartz has further clarified the actual use case of his company’s XRP Ledger and its utility token XRP following comments that put the network’s reputation in question.
XRP’s Actual Utility
A particular X page (@EthereumThaila1), which seems to be a pro-Ethereum user, had ignited this particular X thread following a comment about Ripple’s centralized nodes and went as far as alleging that Ripple’s CEO Brad Garlinghouse is making false representations about the ecosystem while “dumping” on the community’s face.
However, in a series of tweets released on his X (formerly Twitter) platform, Schwartz stated that the XRP Ledger and its XRP token were created to be used to cater for “low-value high-volume” transactions such as payments which ride-hailing company Uber makes to its drivers and remittances.
He made this statement to quench any assumption that XRP’s use case was to handle high-value, low-volume transactions, as he believes those are already “well-served by existing payment systems.”
From his statement, it is believed that Schwartz is referring to the fact that XRP is meant to facilitate day-to-day transactions that accumulate to a large amount of money as against high-value, low-volume transactions involving larger amounts of money transacted less frequently.
Bitcoin and XRP Different
In the thread, another user tried to compare the Bitcoin and XRP ecosystems, stating that the former was superior. He mentioned that Bitcoin was “decentralized sound money,” unlike XRP, which was “100%” pre-mined.
However, Schwartz noted there was no need to compare Bitcoin and the XRPL as they served different purposes based on their design and function. Unlike Bitcoin, which he suggested was created to be a store of value, he stated that the XRP Ledger was more suitable for “fast, cheap, censorship resistance transaction execution.”
He further mentioned that the XRP Ledger had a single DEX (Decentralized Exchange) and a multi-asset system created to process “cross-currency and cross-issuer payments.” As such, the XRP Ledger is more of a “payment engine than a store of value.”
The user disagreed and stated that Bitcoin was created to process transactions, which is why it has the “most value.” But Schwartz reiterated that Bitcoin was designed to be “sound money” and that the blockchain wasn’t designed to process transactions, which is evident in the resistance that people who have tried to expand Bitcoin’s use case have faced.
As to Bitcoin having the “most value,” he presumed that this was so because Bitcoin had a first-mover advantage, and many considered it “good enough.” He believes that people don’t necessarily choose currencies based on “technical merit” but more on “popularity and demand.”
Nevertheless, Schwartz avoided being dragged into admitting that there was any sort of competition between Bitcoin and XRP, as they aren’t direct competitors even though there may be “some overlap in the possible use cases.”
Token recovers ahead of the weekend | Source: XRPUSD on Tradingview.com
Featured image from CCN, chart from Tradingview.com
Source: https://bitcoinist.com/ripple-cto-xrp-utility/