Adopting a market position that is contrary to the extreme libertarian origins of the cryptocurrency industry has made Ripple an enemy to certain communities who are fighting “holy wars” on the issue of defining crypto identity and market strategy.
These were the words of Ripple CEO Brad Garlinghouse, speaking on Thursday June 21 at the CB Insights Future of Fintech 2018 conference in New York. In his view, Ripple’s strategy of partnering with the mainstream financial system is a beneficial and rational decision, but one that has not gone down well with certain crypto communities whom he described as “ideologies and religions”.
“Ripple is Caught up in a Crypto Holy War”
Addressing the topic of the poor perception of Ripple in many parts of the cryptosphere, he stated that while the cryptocurrency revolution was largely born out of fringe libertarian and anti-government ideas, Ripple has chosen to adopt a more constructive view of value creation and this has made it a target for crypto-ideologists.
In his words,
“The origins of this industry are born of a group of people who frankly were very much on the far edges of libertarianism – ‘We don’t trust the government’, ‘We want to circumvent the government’, some would even say ‘Let’s bring down the government’…[But] Ripple has always taken a contrarian view. [Our view is that] the revolution of blockchain is not happening from outside the system. The government is not going away. [That means] all the regulatory frameworks that apply to financial institutions are not going away. That means banks are not going away. Our attitude is that if you want to enable an Internet of Value, you have to connect to the repositories of value.”
He illustrated the point with a comparison between the total value of the Bitcoin blockchain estimated at roughly $120 billion and that of the banking system, worth several trillion dollars. In his view, since Ripple has the stated goal of changing how global economic infrastructure works, it is an obvious decision to partner with banks and financial institutions.
That decision to partner with the system, in his opinion is what attracts the ire of some who “pray at the altar of certain cryptos and have an ideology and a religion about it”.
‘Accelerating the Engine of Global Commerce’
According to Garlinghouse, the solution Ripple provides can accelerate the engine of global commerce by reducing the presence of dormant capital which is caused by pre-funding. With Ripple he said, banks and financial institutions around the world would not need to pay JP Morgan and Chase Bank for liquidity, instead being able to carry out instant inter-institutional transfers.
He also stated that contrary to the popular idea that users carrying out transaction using XRP are exposed to a significant risk of loss because of the volatility of its market price, it is in fact the case that XRP offers even less of a volatility risk than fiat transactions.
Explaining his point, he noted that transaction carried out with XRP takes an average of three seconds, which exposes users to only three seconds’ worth of volatility risk. By comparison he said, a fiat transaction carried out using SWIFT takes an average of three days, or more than 250,000 seconds, representing a substantially more significant volatility risk.
The video of Brad Garlinghouse speaking at the CB Insights Future of Fintech 2018 conference can be seen here.
Featured image from Flickr.