My first instinct with Ripple was to dismiss it, it isn't really a currency. I have since refined this view, Ripple is a currency but it's not a Digital Cash. What does this mean and does it have implications for it's future?
Ripple has never really been that attractive to me. I am not a trader, what interests me more about coins and cryptocurrency is the innovation, the idea. Steemit could change the world. Ripple won't change the world it will just make existing institutions better and faster at continuing what they currently do.
Digital Cash
The coins in this group; Bitcoin, Litecoin, Monero, Dash, Ethereum?, Zcash... all have a few common properties.
- They are part of an economy.
- They act as a unit of exchange for goods and services.
- They are a store of value which can be deferred for use or exchange at a later time.
These features are in common with the way Dollars, Euro and Yen operate in the 21st century. There is nothing special about a 50 Euro note or a bitcoin. Its the economy that a currency is linked to that makes the currency cash. “Real” money is basically a way to convert and exchange time and effort you put in now for use at a later time.
Digital Shares/Assets
In the second grouping I put coins such as; Maidsafe, Factom, Augur ... which are more akin to shares in a company.
Indeed the term has been coined “Initial Coin Offering” (ICO) similar to Initial Public Offering which companies use when they list shares on the stock market for the first time.
These coins are issued, and as they are digital tokens they can also be exchanged for goods and services, but they are more analogous to owning shares in a company. Their value is derived from the value of the company behind the coin.
As the company grows and the company offers goods and services the value of the coin will grow. Indeed many of the coins in this category are not mineable and are released by the creators in exchange for initial investments.
I go into some more detail on this in a previous post Blockchain - Beyond Bitcoin (Part 2)
What is Ripple?
The best description of Ripple I have seen is
"Ripple is a type of centralized currency on a decentralized payment network"
from the following post on Quora How is Ripple different from bitcoin?
Taking this description as a definition, would put Ripple into the Digital Asset box. The implication is that the true long term value of Ripple will depend on the payment infrastructure that it creates. And it does seem to be making great advances in that, will it be the future infrastructure for the global banking system, or will the bubble burst?
I will leave the trading to the experts, and focus on the mind blowing implications of these new currencies. Will Maidsafe revolutionise the Internet? Will Sia revolutionise the data Industry? Will Augur revolutionise the worlds future markets? Will Ethereum and a decentralised app revolutionise Insurance?
Thank you for reading this. I write on Steemit about Blockchain, Cryptocurrency, Travel and lots of random topics.
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