There was some very important news that Bitcoin is going to face an immense challenge from ‘Ripple,’ as according to Ripple Labs’ CEO, Chris Larsen, Ripple has several advantages over Bitcoin. He said that while Bitcoin is a single currency used within a closed economy, Ripple allows users to make payments in any currency across disparate economies.
He also opined that users could say that Ripple plays well with others as it was designed to integrate seamlessly with existing economic systems while also providing users with the advanced utility of the next generation of FINTech.
Some other advocates of Ripple said that another advantage it has over Bitcoin is that whereas Bitcoin has a limited circulation of 21 million coins, Ripple has set a cap of 100 billion coins on its digital currency.
The company claims that with Ripple, customers can send money to anyone, anywhere in any currency, and promises to provide a better alternative than PayPal. It promises that as a decentralized and open source global payment network, it enables free and instant payments to merchants, consumers and developers with no chargebacks and in any currency e.g. dollars, yen, euros, and even Bitcoin.
Criticism of Ripple from Bitcoin Users and Others
A major flaw in Ripple is that unlike Bitcoins, Ripple’s currency is not released through computer mining; rather, it’s held by Ripple Labs. A major advantage that Bitcoin has over Ripple is that it is a decentralized currency. Though Ripple says that it is a decentralized currency, it intends to retain 20% of the coinage.
The company says that it will keep 20% of the coinage as the profit motive and to pay for the development, coding and marketing of Ripple’s digital payment system. Critics say that though Ripple claims that it is open and decentralized, the server is closed source and controlled exclusively by Ripple owners i.e. OpenCoin, now Ripple Labs.
There have also been accusations by some users who believe that Ripple is a scam; however, that does not hold water considering the fact that the company has already declared everything through its transparent process.
Ripple is Officially Open Source Now
Ripple Labs which was known as OpenCoin earlier announced that Ripple is finally officially open source. On 26th September this year, its CTO Stefan Thomas announced that the source code for the peer-to-peer node behind the Ripple payment network is officially open source.
It will be too early to conclude whether Ripple can really challenge Bitcoin, particularly when it is just a couple of months old; it is definitely paving a way for more options. Now that Bitcoin is going to celebrate its fifth year, we can hope that Ripple too makes some ripples and plays a role in the crypto-currency economy.
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