In a recent interview on the “Fintech Focus” podcast, Ripple Chief Market Strategist Cory Johnson described the company’s cryptocurrency XRP as “Bitcoin on steroids,” and said its blockchain was like “Bitcoin 2.0.”
XRP: The Future of Remittance Payments
Throughout the interview, Johnson offered insight regarding what XRP is designed to do, and how Ripple is utilizing the power of blockchain to develop partnerships with banks and traditional finance institutions both at home and abroad:
We’re trying to solve this really big problem, which is moving money across borders. It is insane in this era of technology when I can send a text message to a friend in Rome with emojis and gif attached to it, or I can send an email to a friend in Cape Town, South Africa in three seconds with an Excel spreadsheet attached and all kinds of information, but I can’t send anything of value. I can’t send value or money with anything less than 500 or 600 basis points of cost, and it’ll take me three to five days.
Are They Really Comparable?
Indeed, Ripple does bear some benefits for financial ventures. It offers these businesses access to a quick payment system, it implements anti-money laundering efforts to ensure funds are delivered and held safely, and it allegedly reduces fragmentation and concentration.
At the same time, comparisons between BTC and XRP are sure to lead to some raised eyebrows here and there.
For one thing, Bitcoin is designed to serve more as a payment coin for goods and services. Despite its continued price swings and general volatility (which some analysts claim is at an all-time low), Bitcoin is accepted by varying merchants — most notably ventures like Overstock.com — as a method of payment.
XRP, on the other hand, is not built to operate this way, and instead works more along the lines of a system like SWIFT, a bank service network for the secure transfers of international money. Remittance payments are likely Ripple’s primary goal, though Bitcoin remains the most popular choice among foreign workers.
Private Vs. Public
In addition, new bitcoins are being extracted through an ongoing mining system in which transactions are regularly added to the public blockchain. There are about 21 million bitcoins in existence, of which 18 million are presently in circulation.
XRP boasts more coins — approximately 50 billion. However, Bitcoin is considered a more decentralized system in the sense that most of the coins are available to public users and investors, while more than half of the world’s XRP tokens remain in an escrow account held by Ripple’s chief executives.
Bitcoin remains a public entity, while Ripple is still a private company.
Maybe Ripple’s Got What It Takes
Still, these differences aren’t stopping Johnson from “uptalking” the world’s third-largest cryptocurrency.
A year ago, Ripple was signing new customers every six weeks. Now, we’re signing one every six days, so it’s a dramatic difference in terms of what’s happened. I think that it’s still so early because we’re still selling it. I think there will be a day when the banks who are using our software are so happy that they’re getting the accuracy they want. They’re getting this incredible speed; it knocks their socks off. Imagine when you’re used to something that takes you five days that now takes less than a minute to do, and that’s just a game changer right there. That’s going from the pony express to email.