Members of the XRP community have unearthed historical statements from Ripple’s CTO, in which he asserted that the value proposition of XRP closely aligns with that of Bitcoin.
These remarks date back to a 2018 discussion with Ari Paul, the founder of BlockTower Capital. Paul challenged the perceived value proposition of XRP, particularly in the context of financial institutions utilizing the asset for cross-border payment services.
Specifically, Paul argued that banks would unlikely adopt an asset issued by a third party to generate substantial value, especially when they have the option to own the newly created wealth themselves directly.
Furthermore, regarding XRP’s heightened market valuation, he claimed it was primarily based on speculation. According to him, XRP’s value surged on the sentiment that financial institutions and other entities would eventually adopt XRP.
As a result, Paul posited that if these institutions were to utilize a hypothetical “newcoin,” then newcoin would immediately surpass XRP in value.
Ripple CTO Reacts
In response, Ripple’s CTO, David Schwartz, countered the argument that any entity could easily clone an asset, push it to the public, and gain a competitive advantage.
“The idea that any group can just clone an asset and easily have a lead is absolutely absurd,” Schwartz remarked.
Moreover, he cited that such a projection neither worked for Bitcoin (BTC) nor Ethereum (ETH). Besides, he pointed out the crypto community would resist embracing a digital currency under the control of banks.
The idea that any group can just clone an asset and easily have a lead, however, is absolutely absurd. It hasn’t worked for bitcoin or ethereum and I can’t see it working for XRP. Who wants a crypto run by banks? 3/3
— David “JoelKatz” Schwartz (@JoelKatz) October 5, 2018
Meanwhile, Paul responded by questioning the desirability of a cryptocurrency supposedly overseen by Ripple. Furthermore, he attempted to emphasize a fundamental contrast between XRP and BTC/ETH.
He pointed out that Bitcoin’s value proposition lies in providing an alternative to centralized banks. In contrast, he claimed XRP’s value is contingent on adoption by these institutions. “Different stakeholders, different incentives,” Paul remarked.
XRP Value Prop Similar to Bitcoin
The Ripple CTO countered Paul’s perspective by citing the crypto market dynamics. Schwartz argued that if Paul’s stance was accurate, there would be less correlation between the prices of XRP and BTC.
You’re entirely wrong on this, and the market disagrees with you. If you were right, XRP and BTC prices would be much less correlated.
— David “JoelKatz” Schwartz (@JoelKatz) October 5, 2018
In parallel, he contended that XRP can be utilized for the same purposes as Bitcoin, noting that such utility was already material. While likening XRP’s value proposition to Bitcoin’s, Schwartz highlighted XRP’s upper hand regarding speed, cost-effectiveness, and payment suitability.
Community Reacts
With these conversations resurfacing in the crypto scene, some XRP enthusiasts have expressed frustration the price of XRP remains below $1 despite the said valuation proposition.
“Yeah, the same old stories, but the price is still at 50 cents. We are exhausted,” an X user remarked.
“Great stuff. It’s a shame the price hasn’t moved much in the 5 years that followed,” another said.
