While advocating the value of XRP, Ripple has been selling XRP profits. In 2018, the bear market earned $535 million; in the first quarter of 2019, it earned $160 million. The data on the chain shows that Ripple actually sold more XRP than announced.
However, behind the wealth story seems to cover up many "secrets":
In Ripple's payment system, XRP has never been a necessary condition. In fact, no bank has continued to use XRP for international payment settlement.
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For XRP, the biggest enemy is Ripple itself.
Regular sales of coins
What kind of company is Ruibo?
Simply put, this is a company that relies on selling coins for a living.
According to official data, Ruibo earned $160 million in the first quarter of 2019, and the profit model is simple – selling coins.
Among them, Direct Sales directly sold to the organization a profit of 61.93 million US dollars, Programmatic Sales in the market to cash out $ 107 million.
The regular sale of Ripple makes Ripple one of the richest organizations in the world of cryptocurrencies. Even in the bear market of 2018, Ripple still earned $535 million by relying on the continuous sale of Ripple.
All this is due to the fact that in May 2017, Ripple launched the new feature Escrow, which gradually released Ripple through a third-party hosting. The popular explanation is that Ripco is regularly sold.
The official explanation for this is that Ruibo has been questioned that the positions are too “centralized”. In this case, Ruibo simply “decentralized” and continuously released XRP through Escrow.
According to the official statement, Ruibo put 55 billion XRP into 55 Escrow's hosting contract accounts, each account is 1 billion XRP, unlocking a hosting contract account on the first day of each month, open for enterprises to buy, and the month XRPs that have not been purchased will be returned to the new smart contract.
Through such a mechanism, Ruibo will sell up to 1 billion XRPs per month for the next four and a half years.
However, the data on the chain shows that Ripple actually sells more XRP than the report.
According to the Ripple announcement, the number of managed smart contracts should be 55, with 1 billion XRP per contract, for a total of 55 billion.
The data provided by CoinMetrics shows that there are actually 85 managed smart contracts. Although the total number is 55 billion XRP, the number of smart contracts is not the same as the official announcement. The actual situation is:
25 smart contracts, each with 1 billion XRPs, released in January 2018 and ending in January 2020.
60 smart contracts, each with 500 million XRPs, from February 2020 to July 2027, releasing two managed smart contract accounts each month.
In addition, the chain data detected by CoinMetrics and the market reports released by Ruibo each quarter are also different.
In the third quarter of 2018 and the first quarter of 2019, the number of XRPs returned to the custody in the quarterly report released by Ripple was higher than the number of XRPs displayed on the chain, which means that Ripple actually sold more XRPs than announced. The total data gap is 200 million XRP and is worth about $80 million.
From this perspective, for XRP holders, their biggest enemy is Ripple itself.
Ruibo's past: the victory of the pick-up man
Since the establishment of Ruibo, Ruibo has experienced three powers in total, and the entire development history has been filled with "the victory of the successor."
In 2004, Ryan Fuge founded a company called RipplePay, with the goal of building a peer-to-peer payment network that would replace the banking financial system.
In the early stage of the helm at the helm, the Ruibo system can only transfer money between people who trust each other. Without the chain of trust, it cannot be expanded. Therefore, Ruibo has not made great progress at this stage.
Until 2011, Bitcoin gained widespread attention in the geek circle and caused curiosity among Ripple employees. In contrast, Bitcoin seems to have built a peer-to-peer payment network that is superior to the Ripple currency architecture.
In May 2011, Bitcoin pioneer Jed McCallab joined Rippo to bring the technology and philosophy of Bitcoin to Ripple.
McCaleb founded the infamous bitcoin exchange Mt.Gox in 2010 and sold it to Mark Karpeles in March 2011.
After McCalub joined, the company Ruibo also completed the first power handover, and Ryan Fuge took the initiative to hand over the control of Ruibo to McCaleb.
In 2012, at the strong invitation of McCaleb, former chairman of E-Loan Chris Larsen joined Ripple. Larsen is now the executive chairman of Ripple and is considered the co-founder of Ripple in Ripple’s official propaganda.
In October of the same year, Ripple received the first round of seed investment, Jessie Powell and McCalbe's close friend of the cryptocurrency exchange Kraken, and Roger Ver, who is known as the bitcoin Jesus. They all participated in the investment, with a total investment of about 200,000 US dollars, although in the eyes of some investors, Lian Ruibo's founders are not sure what they are going to do.
In January 2013, perhaps Ricoh, which was inspired by Bitcoin and constantly explored in the confusion, finally found their way forward—“I don’t know what to do”.
The Ripple XRP was born.
Like Bitcoin, the Ripple system is built on the cryptographic signature public blockchain, and Ripple Networks wants to combine XRP with a dollar-paid trust structure network, for example to pay for transaction costs.
The total supply of XRP is set at 100 billion. The official statement is to avoid excessive price fluctuations, of which 80 billion tokens are distributed to the company, and the remaining 20 billion are divided by three founders.
Chris Larsen received 9.5 billion Ripple coins. In 2014, Larsen promised to distribute 7 billion of its Ripple coins to charitable foundations.
Jed McCallab also received 9.5 billion Ripple coins.
Another co-founder and chief strategist, Arthur Brito, received 1 billion Ripple coins.
Shortly after the currency was issued, Ripple’s top management fell into a civil war. In June 2013, Jed McCallab ended his position at Rippo because he failed in the internal struggle of Ripple.
McCaleb disagreed with some of Larsen's strategic views, while Larsen, who knew business more, was supported by new venture capitalists, and McCalbe was forced to leave.
After leaving Ripple, McCallab founded Stellar in 2014 and continued to work on a peer-to-peer cross-border payment network based on the improvement of Ripple.
When McCaleb left Ripple, people were worried about whether he would put his XRP into the market and cause his price to collapse. McCalbe and Ripple reached an agreement to restrict the sale of XRP and unlocked in batches to prevent this from happening.
After two rounds of innings and infighting, Chris Larsen, the outsider, finally became the actual controller of Ripple. With the arrival of the bull market, Larsen embarked on the peak of his life.
On January 4, 2018, the price of Ripple reached a high of 3.31 US dollars. Since 2017, the increase has reached 51,709%, and the total market value has reached 331 billion US dollars. It is related to global technologies such as Google, Apple, Facebook and Alibaba. The giants stand side by side.
According to Forbes, Ripple executive chairman Chris Larsen holds a 17% stake in the company, controlling 5.19 billion Ripple coins at the time, peaking at about $17 billion, making him the richest in the world. One of the people.
Ripple is not equal to XRP
Why are you buying XRP?
In the eyes of many cryptocurrency investors, XRP is considered to be a true value currency. To challenge the traditional global cross-border payment system SWIFT, it will become a decentralized global fund settlement system, with more than 200 banks and financial institutions joining the world. It is a lot of trust endorsement for XRP.
Regrettably, this cognition is half of the lie plus half of the perfunctory.
Ripple (XRP) and Ripple are two concepts.
In Ruibo's product system, there are three major products, xCurrent, xRapid and xVia.
xCurrent is Ripple's flagship product, which provides cross-border transactions between banks and banks. Ripple sets up distributed accounts between banks. Whenever bank A transfers money to bank B, it can be liquidated by intermediary bank C. The amount of the bank account opened in C and the bank account opened by B in C changed.
The advantage of xCurrent is that the settlement speed is faster and the cost is lower. At present, more than 200 banks around the world cooperate with Ruibo to use xCurrent for international settlement. According to calculations, using xCurrent, banks can reduce capital costs by up to 33%.
But please note that this is not related to XRP. In the usage scenario of xCurrent, XRP is not needed at all.
In various blockchain news, Ripple often has news of cooperation with big international banks. Investors think this is good news for XRP. However, when you hear that a bank has announced the adoption of Ripple's system, they are actually When using xCurrent, it has nothing to do with XRP.
For a long time, the value endorsement of XRP is actually based on xCurrent's great achievements.
The only product that can use XRP is xRapid. The mode is that the payer first exchanges the payment with XRP and sends it to the bank of the payee. The bank converts the received XRP into the corresponding currency and then pays it to the corresponding payee. .
In this scenario, XRP has become a medium for capital conversion, but banks do not seem to like this product. If the price of XRP fluctuates greatly, it will cause exchange losses. Therefore, the most ideal state of XRP is to maintain a "stable currency" status for a long time.
For banks, they do not have the motivation to hold XRP. This is not an investment project for them. It is just a medium for fund transfer operations.
And in order to reduce price volatility, banks will try their best to hold the minimum XRP in the shortest possible time, as long as the cross-border payment is completed.
They don't care if the XRP is worth 5 or 50. The only thing that cares about it is Ripple itself and the retail investors who hold XRP.
The existence of xRapid is mainly to give XRP value, so that XRP does not become air. In the future, whether XRP can truly create value depends entirely on the development of xRapid.
What's embarrassing is that although Ripple is actively marketing xRapid for banks in Mexico and the Philippines, and publicizing that 10 financial institutions are preparing to use XRP for cross-border payments through xRapid, it has not achieved good results.
For banks, the use of cryptocurrencies for intermediate settlements always has legal risks, which makes them afraid to take risks.
Overall, Ruibo is definitely a company that has succeeded and created real value, but Ripple is more like a tool used by Ripple to cash in.
The success of Ruibo does not mean that Ripple will succeed.
1. "5 alarming reasons Ripple might not be what you think"
2. "The Ripple story"
3. "An on-chain analysis of Ripple's escrow system"
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