A Counterargument to the Value Proposition of Ripple's XRP Token

In this article, Piasecki offers his commentary on the rising price of XRP, the native token on the Ripple Consensus Ledger, aiming to offer a valuation for the cryptographic asset based on its underlying protocol and desired utility.

Basics of Ripple and XRPs. Ripple is a crypto 2.0 system launched in late 2012.

Criticism of XRPs. The main criticism levelled at XRPs, and thus also against the Ripple network, is the way the XRPs were distributed.

Ripple Labs, the creators of Ripple, created the network with 100bn XRPs in it, and no new XRPs have been created since the its inception.

Ripple has recently taken steps to promote its XRP market and put the majority of their XRPs into an escrow.

McCaleb left the team to start his own version of Ripple called Stellar, and decided to sell his XRP stash, resulting in a legal kerfuffle, a settlement and a schedule for how those coins may be sold.

This ties to the central value proposition of XRPs - being the universal medium of exchange.

If everyone agreed to use XRPs as the common currency, you would only need to make one market per currency - between that currency and XRP. At the moment, it looks like that is the case - the major markets on the Ripple network are all trading XRPs for the various currencies issued on the network.

If XRPs were the universal currency against which all of the currencies would be traded, any time the value of XRPs would fluctuate, you'd have to adjust the entire market.

Because of the high flexibility and value propositions of the IOUs on the Ripple network, they are XRP's main competitor in its home court.