For people who’ve tied their flag to the mast of the good ship Ripple Labs, this will not be a popular opinion.
Nevertheless, there’s a case to be made that Ripple Labs and its XRP product have slept through their market opportunity. It was bound to happen; their resources have varied greatly over the years as the price of cryptos fluctuated.
Ripple’s Two Steps Forward, One Step Back
The very moment, back in 2017, when banks and other institutions began to take serious notice of cryptocurrency is the same moment when Ripple might have been considered prepared to tackle its lofty goals.
In case you missed it, Ripple believes it will be the premier way for banks to settle transactions across borders and other expensive hurdles. Ripple offers a clean and simple technology stack that works as intended. However, major banks like JP Morgan, Bank of America, and most other large banks have so far ignored Ripple.
In JP Morgan’s case, the mega bank – which moves a reported $6 trillion a day – decided to create its own blockchain solution.
If we consider the history of banking, this seems more likely to be the trend than the opposite. Banks will work together when it helps them, but ultimately the “network effect” of centralized fiat banks is fomented by forcing people to create accounts.
Don’t read this wrong: Ripple has had a number of successes over the years. It could easily operate for decades, networking small banks from the Middle East to the Middle America. That’s a potential niche for Ripple, after all: networking smaller banks (those that count in the millions rather than billions) and giving them access that would otherwise cost them a lot of money. Banks and credit unions can in turn pass on savings to consumers, who may or may not understand that they have Ripple to thank.
Stellar, founded by Ripple co-founder Jed McCaleb, partnered with IBM some years ago to build a global network of financial institutions on the blockchain. With the help of IBM, Stellar, too, has captured the attention of a number of banks.
A Sea of Bank Tokens
The balkanization of these things is where the problem lies, and Ripple’s legion of social media supporters understands that. This is why they get upset when other products succeed, and perhaps for good reason. But one might argue that a Ripple maximalist is even less sensible than a Bitcoin maximalist.
The future is unwritten, for sure. Nevertheless, it seems that banks are likely to build their own solutions or use Ripple, Stellar, and other blockchain-native solutions as little as possible. There are multiple reasons to believe this, including the fact that forking the Ripple codebase is trivial for a team of well-paid developers.
Ripple does nothing that other protocols can’t do.
Ripple’s best offering is its marketing and on-boarding team, which is something you don’t get from cryptocurrencies that are fully decentralized (meaning they have no primary company promoting their usage, but rather a community of such companies).
Ripple is the Apple approach to blockchain: one company, one blockchain, one token, one vision.
Apple has been successful over the years, but its operating system market share has yet to exceed 10%. Despite this, the company has made billions.
Which is to say that Ripple Labs could survive indefinitely, but probably in the very long run, banks will opt for bank-native, rather than blockchain-native, solutions, regardless of how the “Ripple Community” feels about it.
