San Francisco based Ripple has become one of the most successful startups in the last decade, which has been full of overnight success stories in the fintech space. Since it launched its XRP token in 2013 it has made its way into the top five cryptocurrencies along with Bitcoin and Ethereum. The 2017 crypto market run-up left the company flush with cash. The only problem they seem to be having is no one is using XRP for the right reasons.
Ripple Giving Away XRP
XRP was created to bridge the gap between banking and decentralized technology, that is as a way to move money faster and cheaper. The problem is very few people are using it this way according to an article in the New York Times. As utility becomes the watchword for cryptocurrencies success in the future, Ripple has been putting quite a lot of XRP into the world for free.
When late night talk show host Stephen Colbert generously announced a donation of $29 million worth of XRP to American teachers it wasn’t coming from his personal account. Nor, when Ashton Kushner presented the equivalent of $4 million of the digital coins to The Ellen DeGeneres Wildlife Fund did that come from his pocket. Ripple put up all that XRP as an initiative to get more of their cryptocurrency out into the working world.
The company can be so easy with its XRP coins because, unlike Bitcoin which limits the number of its coins entering the world with a transactional formula (more transactions = more mining = more bitcoins), all of the XRP that will ever be was created in 2013.
Priming the Pump to Increase Utility
Ripple created 100 billion XRP, setting aside 55 billion in escrow which has led to allegations that the company can and has manipulated the price of the token. It also allows them to use their estimated $30 billion in assets to set up programs like Xpring, which pays developers to build XRP focused software. Asheesh Birla, the head of product at Ripple, was quoted by the Times saying:
“It’s still really, really early days, but we are seeing the vision come to life. I need to make sure it’s in the hands of the right folks.”
Ripple has suffered some bad press recently while also being named in a class action lawsuit in the US to do with securities regulations. As the company works towards achieving clarity with the SEC and convincing the public that using its products to move money around is a safe and reliable alternative to the international banking systems gaining publicity through donations and free Snoop Dogg concerts at least keeps Ripple visible in a very crowded crypto space.