- Following its listing of XRP, Coinmotion has enlightened users about Ripple and XRP
- Coinmotion says XRP is not powered by blockchain technology
- The exchange says the basic idea behind XRP is to simplify trades
Contrary to the claims of Ripple Labs, a U.S.-based financial technology (fintech) company in charge of the XRP altcoin, Coinmotion cryptocurrency exchange has declared that XRP is not a blockchain-based digital asset but an entirely a centralized virtual currency, according to a blog post on February 11, 2019.
Ripple Labs is Not a Blockchain Project and XRP is Not a Cryptocurrency
Coinmotion, the latest cryptocurrency exchange to list the highly criticized XRP digital asset has joined the league of distributed ledger technology (DLT) enthusiasts that firmly believe the altcoin is not a cryptocurrency, since its parent company Ripple Labs entirely control it and XRP transactions are confirmed via HashTree.
While XRP is listed on the cryptocurrency table as the third largest cryptoasset after bitcoin (BTC) and Ether (ETH), Coinmotion has shed more light on the workings of both Ripple, the payment network and XRP the native currency of the network.
The firm has made it clear that the primary objective of the Ripple payment network is to simplify trades between large financial entities such as companies and banks.
The exchange also noted that although a significant number of firms across the globe may have declared an interest in using the Ripple network to facilitate their transactions, only a few of these firms actually use Ripple.
“Even though hundreds of companies have stated in one way or another of being interested in Ripple, only little actual use is done, and most companies and institutions are still just looking on to the subject,” Coinmotion explained.
Specifically, the exchange has explicitly stated that even though XRP is based on open source code and can be traded on a peer-to-peer basis just like bitcoin and other cryptos, the altcoin is heavily centralized, since it is not powered by blockchain technology or mined.
The firm also pointed to the fact that there can only be a maximum of 100 billion XRP coins in existence and Ripple Labs has already mined them all, and it plans to release only half of these assets to the market while keeping the rest in its vaults.
A Double-Edged Sword
In conclusion, Coinmotion has opined that the centralized mode of operation of Ripple and XRP is quite a risky one, as it presents a single point of failure.
In essence, if Ripple is hacked, the entire XRP ecosystem would crash to the ground.
At press time, the price of XRP sits at $0.30, with a market cap of $12.50 billion as seen on CoinmarketCap.