Bitmex is right: Ripple is not a cryptocurrency!

A few days ago, Bitmex came out strongly against Ripple (XRP). The argument was that Ripple isn’t a cryptocurrency in the true sense of the word.This is confusing news for Ripple investors, even though it has surged in the last few hours, by over 50%. But Bitmex aside, is ripple really a cryptocurrency? The unfortunate answer is NO!If you have invested in Ripple believing that it shares the same blockchain ideologies as bitcoin and other cryptos, then you might have to reconsider your stand. Not that Ripple is a bad investment, if anything, it has some great fundamentals that give it an edge over the other cryptos in the market.Anyway, let’s dwell on why Ripple is not a crypto and why Bitmex is not just trying to talk it down, but actually raising some serious concerns.

One company controls 60% of all ripple tokens

The whole point of cryptocurrencies was to bring decentralization and give power to the people. Unfortunately, ripple (XRP) is very far from this principle. That’s because of the 100 billion Ripple tokens created, Ripple labs, the company behind the ripple token has 60 billion of them. That’s way more than all the Ripple in circulation which are about 38 billion. This is the furthest you can get from a cryptocurrency. Essentially, Ripple labs and other financial institutions that also hold a sizeable portion of ripple can easily control its price the way they like.Nothing stops them from manipulating the price for their own gain. That’s something unheard of in true cryptocurrencies.

There is no mining in Ripple

Bitcoin and other cryptos all have mining algorithms that determine how much power gets in the hands of miners. In short, no single entity gets to determine the direction of the crypto. On this front, Ripple is completely different.It uses a centralized blockchain, which means all decisions emanate from a single source. While this makes Ripple extremely fast and efficient, it goes against the whole reason why cryptocurrencies exist in the first place. The fast transaction speeds come at a cost of reduced power to investors. That’s a risk, because you are at the mercy of Ripple labs and the banking system when holding Ripple.

It can be created on demand

This is another area where Ripple completely differs with cryptocurrencies. On top of the fact that it is controlled by one organization, it can also be created on-demand. The idea behind is to make it efficient, just like central banks print money to keep the economy running efficiently. This simply means that it is impossible to hold Ripple as a store of value. Holding Ripple as a long term investment could, and will most likely be disastrous to many. Chances are its price will always stay within the range that bankers want it to be by having more of it created. On this basis alone, you can understand why Bitmex’s reservations about Ripple are not unfounded. It’s simply not a crypto, and many people don’t know about it!