I honestly think that the cryptocurrency is not going to be worth very much in the future. And not because Ripple is going to be unsuccessfully… I believe it will. It’s because XRP has very little value when their competitors can offer the same exact services without the need for a native asset.
Ripple’s core competition are the new breed of ‘permissioned’ blockchains that have been developed by Hyperledger, JP Morgan and R3 Corda. These blockchains do the same things as Ripple, offering to trade financial assets on the blockchain without high costs.
But what Ripple’s competitors realized was that they could offer transactions without any fees by utilizing identity management in their blockchain service. This makes sense, as even Ripple designed the concept of ‘Trust Lines’ so that banks would only work with organizations they had previous relationships with. The permissioned blockchains just took this a step further and focused only on these trusted relationships. Without the native asset, of course.
The problem with XRP is that it’s not enabling any new features, but adding an additional cost that the competition does not have.
I don’t believe that this will harm Ripple Labs in the short term. But if the cost of XRP keeps rising and banks have to pay more to use Ripple, Ripple Labs has the ability to give XRP away for free or flooding the market with XRP to bring the price down. After all, they do own a majority of the XRP available to the world and have the ability to use it as they please.
The reason they would devalue their own currency is because Ripple is competing to win the financial banking industry, not creating the highest market cap currency. Cheap XRP serves their organization much more than expensive XRP.
I really do believe Brad Garlington and Ripple Labs are doing good work, and there’s nothing nefarious about their use of XRP. In a way, it was only natural to think that other Blockchain competitors would follow suit and create their own currency, making XRP’s Crypto economics common. The problem is that the market changed to put them in an awkward situation… one that I think Brad would rather not have.