The Ripple CEO, Brad Garlinghouse, has stated that he doesn’t consider XRP, Bitcoin, Ether, or any other major digital token as currencies. He elaborated his position to Yahoo Finance at their All Markets Summit on Cryptocurrency which was held on Wednesday. The six-hour event was streamed online and sponsored by CoinDesk. The aim of the meet was to examine the growing interest in digital currency and the technology behind it.
A wide spectrum of companies involved in cryptocurrency and blockchain were represented at the summit. These included Blockchain, the digital wallet company, BitPesa, a payments processing firm focusing on Africa, and Chain, a private blockchain initiative being developed for banks.
Another project that has been targeting banks is, of course, Ripple. The idea behind their XRP token is to facilitate faster cross-border payments for traditional centres of finance. The XRP token had an amazing 2017 with its price rising over 32,000%. However, Brad Garlinghouse is uneasy about the title that his token and others have taken:
“I don’t call this cryptocurrency… It’s not currency. I can’t go to Starbucks or Amazon and use—and you know, somebody inevitably will be like, Well, I have one example where I bought something with a bitcoin.’ And then I usually say, ‘Well, did you do a second transaction?’ It’s not actually a currency. These are digital assets. If the asset solves a real problem for a real customer, then there’ll be value in the asset.”
However, the Ripple CEO overlooks the fact that there are loads of examples of people using cryptocurrency to buy something and even more of people using an alternative item or token not typically defined as a currency to make a purchase. What’s more, in the UK I can’t use dollars in my local off license. Does that mean dollars are not a currency? Of course it doesn’t. There is no universal currency. In fact, certain cryptocurrencies are the closest we as a race of people have come to having a currency without borders. Just because people aren’t encouraged to get rid of Bitcoins through centrally managed inflation as soon as they get them doesn’t make it any less of a currency.
For Garlinghouse, digital assets only have value if the asset solves a problem in the business world. They don’t have value as a day-to-day currency. However, this again overlooks the fact that a $20 note has zero utility other than the fact that people widely agree that it is useful as a medium of exchange. Gold too has some practical applications in electronics but these are limited. By and large, the perceived value of gold far outweighs its actual usefulness. The value of gold and paper money is constructed by society and there is no reason why it cannot be constructed again for an asset like Bitcoin, which could be far more useful as a store of value than gold ever has been – BTC is divisible, transferable, transparent, and permissionless to name but a few of its qualities.
However Garlinghouse feels about the title his token and others have assumed, the term cryptocurrency has become so entrenched now after nine years of use, it’s unlikely to be changing anytime soon.
