A prominent Bitcoin investor and author, Eric Yakes, recently unleashed a scathing attack on Ripple and its XRP cryptocurrency. He didn’t pull any punches, calling Ripple “completely retarded” and accusing it of creating “fake money for political gain.”
Yakes’s Main Arguments Against Ripple
Yakes’s main points were:
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No Real Use Case: He argues XRP serves no legitimate purpose, especially with better alternatives like stablecoins and Bitcoin already available for remittances. He believes its only use is to artificially inflate the token price through marketing and political lobbying.
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Lack of Scarcity: Yakes claims XRP’s supply isn’t truly scarce, as the ledger can be easily altered, and the Ripple foundation sells XRP to fund its political activities. This directly contradicts Bitcoin’s decentralized and scarce nature.
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Inflated Volume Claims: He dismisses RippleNet’s reported transaction volume as insignificant compared to Bitcoin and Tether, calling it a deceptive tactic. He believes banks are more interested in the publicity than actually using XRP.
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Centralized Control: Yakes points to a recent network shutdown as evidence of Ripple’s centralized nature, arguing that a single node operator could halt operations without broader consensus. He also highlights the lack of financial incentives for validators, weakening the network’s security.
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Political Agenda: He suggests Ripple’s pursuit of CBDC partnerships clashes with past US government stances, implying a politically motivated agenda.
Yakes concluded his critique with a strong condemnation of Ripple and XRP, urging people to find a “higher purpose” than supporting the project.
The XRP Community Fights Back
The XRP community swiftly responded to Yakes’s criticism, with many dismissing it as misinformation. Matt Hamilton, a former Ripple developer, offered a counter-argument:
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Ripple vs. XRP: He emphasized the distinction between Ripple (the company) and XRP (the cryptocurrency), arguing Yakes conflated the two. The company’s focus on remittances and CBDCs doesn’t necessarily reflect XRP’s utility.
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Volatility: Hamilton argued XRP’s volatility is less impactful due to the speed of transactions on the XRP Ledger. He also pointed out that stablecoins can be used on the XRP Ledger.
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Partnerships: He defended Ripple’s partnerships, stating that incentivizing early adoption is a standard practice for startups.
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Network Shutdown: Hamilton clarified that the recent network halt was a designed feature, not evidence of centralized control. The network temporarily failed to reach consensus but resumed operation once consensus was achieved. He also pointed out that many Bitcoin nodes operate without direct financial incentives, a model applicable to the XRP Ledger.
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Political Allegations: Hamilton challenged Yakes’s claims about Ripple’s political activities, highlighting the separation between Ripple (a US company) and the XRP Ledger Foundation (based in Estonia, relocating to France).
At the time of writing, XRP was trading at $2.48. The debate continues, highlighting the ongoing discussion surrounding the future of cryptocurrencies and their place in the financial world.
