Bitcoin is at the origin of the cryptocurrency revolution, but its fate may well resemble that of Napster, which changed the rules of the digital music game ... but for others. At least, this is the view of Brad Garlinghouse, Ripple's general manager and supporter of the rival cryptocurrency, XRP.
"We may discover that bitcoin is the Napster of digital assets," he said at the Recode's Code Conference. "It's a transformative technology, but Spotify and iTunes reign supreme because they've engaged with regulators to solve a real problem."
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Cryptocurrency and blockchain (their basic technology), face an uncertain destiny. Large companies, including Intel, IBM and Microsoft, as well as countless startups, are betting on this techno. But scams, confusion, hype and ever changing valuations make it hard to know if it's really a good idea.
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Garlinghouse is pretty clear, he thinks that the grandfather of cryptocurrency, bitcoin, is now in the category of bad ideas, at least for its original use, namely an alternative to ordinary money. Indeed, for this type of use, Bitcoin records transactions on a global network of computers that no entity controls. "People talk about using bitcoin to buy coffee, but the average bitcoin transaction can take up to 20 minutes, and the transaction cost will double the price of your coffee."
Garlinghouse, unsurprisingly, thinks his business is a better alternative
Ripple is one of the most prominent startups in the world of cryptocurrency. Its XRP has the third market capitalization after bitcoin and ether Ethereum project. The currency is set up for the tasks of the world of finance, such as money payments between banks across borders that settle faster than conventional transfers. Ripple has big names in the bank such as American Express, RBC, Santander and Crédit Agricole.
However, XRP has not been immune to volatility. In addition, Ripple is accused of selling unregistered digital money to investors, which would violate federal laws of the United States. Reducing transaction costs and speeding up transaction times for banks may not be very exciting for the general public, but that does not mean it's not important, says Ripple's boss. "It's a multi-trillion dollar problem."
Businesses want blockchain to revolutionize everything from the sale of concert tickets to online betting, to car maintenance records and carbon tracking. But Ripple focuses on the relatively tight work of cross-border payments. Everything in its time, as they say.
