Ripple’s CTO Clarifies XRP’s Utility
Ripple’s Chief Technology Officer (CTO), David Schwartz, has provided further clarification on the actual use case of the XRP Ledger and its utility token XRP. This comes after comments were made questioning the network’s reputation. A user on Twitter alleged that Ripple’s CEO, Brad Garlinghouse, was making false representations about the ecosystem and accused the company of centralized nodes.
Utility for Low-Value High-Volume Transactions
Schwartz took to Twitter to address these concerns and stated that the XRP Ledger and XRP token were specifically designed for “low-value high-volume” transactions such as payments made by companies like Uber to its drivers and remittances. He emphasized that these types of transactions were not well-served by existing payment systems.
It is clear from Schwartz’s tweets that XRP is intended to facilitate day-to-day transactions that accumulate to a large amount of money, rather than handling high-value, low-volume transactions involving larger amounts of money transacted less frequently.
Differences Between Bitcoin and XRP
During the Twitter thread, a user attempted to compare the Bitcoin and XRP ecosystems, claiming that Bitcoin was superior due to its decentralization. Schwartz disagreed with this comparison, stating that Bitcoin and the XRPL serve different purposes based on their design and function.
Schwartz explained that while Bitcoin was created as a store of value, the XRP Ledger was more suitable for fast, cheap, censorship-resistant transaction execution. He highlighted that the XRP Ledger includes a single Decentralized Exchange (DEX) and a multi-asset system designed for cross-currency and cross-issuer payments. Therefore, it functions more as a payment engine rather than a store of value.
No Direct Competition Between Bitcoin and XRP
Schwartz made it clear that he did not see Bitcoin and XRP as direct competitors, despite some overlap in possible use cases. He acknowledged that Bitcoin had a first-mover advantage and was considered “good enough” by many due to its popularity and demand. However, he emphasized that people do not necessarily choose currencies based on technical merit.
Hot Take: XRP’s Role as a Payment Engine
David Schwartz, Ripple’s CTO, has clarified the purpose of the XRP Ledger and its utility token, XRP. Contrary to claims that Ripple’s CEO is misrepresenting the ecosystem, Schwartz asserts that XRP is designed for “low-value high-volume” transactions like Uber payments and remittances. He explains that this distinguishes XRP from Bitcoin, which serves as a store of value. The XRP Ledger acts as a payment engine, offering fast, cheap, and censorship-resistant transaction execution. While there may be some overlap in use cases, Schwartz emphasizes that Bitcoin and XRP are not direct competitors. Ultimately, popularity and demand, rather than technical merit alone, influence currency choices.
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