Ripple CEO Brad Garlinghouse said that he believes Cryptocurrencies are more of assets instead of currencies. He expressed his beliefs in the recently concluded Yahoo Finance All Markets Summit. He said that he thinks cryptocurrencies are less of currencies as many proponents might argue.
During the Summit, Brad cited the lack of real-world opportunities to spend digital currencies as a way to emphasize that they do not have an inherently practical use as a currency. Further explaining his point he expressed:
“I don’t call this cryptocurrency. It’s not a currency. I can’t go to Starbucks or Amazon and use—and you know, somebody inevitably will be like, ‘Well, I have one example where I bought something with a bitcoin.’ And then I usually say, ‘Well, did you do the second transaction?’ It’s not actually a currency.”
Rather, Garlinghouse sees XRP as an asset tied to its functionality and application as a solution for issues. They are getting solutions for issues in the real world. He added: “These are digital assets. If the asset solves a real problem for a real customer, then there’ll be value in the asset”. Garlinghouse additionally communicated that he doesn’t believe Bitcoin is leaving in the near future. However, he further added that he doesn’t think Bitcoin is an apt solution to the payments problem. He cited that Ripple’s quicker transaction times and lower transaction fees are helpful in such situations. XRP is 1,000 times faster and 1,000 times cheaper than a bitcoin transaction. He said, “I am not a believer that bitcoin dies some terrible death. I don’t think it’s going to solve a payments problem.”
While Garlinghouse’s announcements may appear ill-disposed, there is a current example of organizations leaving their past help of digital currencies like Bitcoin. Several platforms like Steam and Stripe stopped their support for Bitcoin payments over the last few months. Both the companies have cited high transaction fees as the leading culprit for their decisions. Stripe said, “Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense” in a post dated January 23rd, 2018. Here, Garlinghouse’s announcements appear to mirror the development of scrutinizing Bitcoin’s common sense in everyday life. Brad joked: “Are you going to use a bitcoin, or a fraction of a bitcoin, to buy a cup of coffee? Well, it’s going to take hours to complete the transaction, and your coffee is going to get cold.”
Low Transaction Fees
While many may concur with Garlinghouse’s notion, some within the community look to currencies as an example of progressively lowering transaction fees and transaction times. Platforms like Ethereum would like to have an indistinguishable exchange limit from Visa inside a couple of years. And they are currently endeavoring to defeat issues with scaling. This might be another case of where Ripple winds up opposing the digital currency community, as many projects aim to serve as day-to-day currencies.