Forbes: "Ripple is a scam"; The community fights back

03 Mar, 2019 | Updated: 03 Mar, 2019
by Will Heasman
News
Forbes: Ripple is a scam; The community fights back

Forbes recently found themselves the subject of ridicule and persecution at the hands of the XRP army, when one of their writers casually indicated that Ripple may be a scam…

The writer in question, Jason Bloomberg (we’ll refer to him as Jason, rather than Bloomberg to avoid any confusion) recently authored an article on the recently announced (and highly maligned) JPM Coin.

Within the article, certain parallels were drawn between JPM’s latest venture and Ripple themselves. However, rather than positing JPM Coin as competition to Ripple, Jason simply dismissed Ripple as an outright scam – seemingly through conjuncture and without any real explanation given.

Of course, the XRP / Ripple community didn’t stand for it, calling Jason out for his evident lack of research.

In response to this, the writer didn’t apologize, but instead wrote an article backing up his original statement, an article entitled: ‘Is Ripple A Scam?’

Jason opens his argument by relaying that what he found post research as “chilling”.

The writer then goes on to posit that the fundamental nature of Ripple’s business model is a pump and dump scheme, elaborating that the firm undergoes numerous practices to artificially increase the value of XRP; qualifying his findings with a cute little chart depicting this model:

Jason states that In order to “obscure Ripple’s founders’ intentions,” XRP was created under the guise of an open source community, and thus not Ripple itself.

With this in mind, Jason questions the amount of XRP in the hands of Ripple, asking how they managed to accrue such an amount.

The answer to this, from the director of regulatory relations for Ripple - Ryan Zagone - was: “What we do have is we do own a significant amount of XRP, it was gifted to us by some of the open-source developers that created it.”

However, this wasn’t good enough for Jason, who called Zagone disingenuous, adding:

“Ripple gets a say as to who can process XRP transactions, essentially making XRP a centralized, permissioned crypto. As a result, many people in the crypto community don’t even consider XRP to be a cryptocurrency at all, because it’s not decentralized.”

Jason’s second point of contention is the firms, RippleNet Accelerator Program. The writer suggests that the program is effectively a way to "pay companies to become partners."  Jason refers to the Ripple blog which states that the firm will “offer a unique reward for financial institutions that are the first in their markets to process and promote commercial payments on RippleNet,”

However, Jason main point here is Ripple's use of XRP, as the program is funded by $300 million of XRP from Ripple’s XRP holdings.

The writer also touches on the XRP’s contested security status reducing the argument simply to: “if people buy an asset with the expectation of selling it later for a profit, then it’s a security.” Comparing XRP to JPM Coin by adding: “JPMorgan’s JPM Coin, in contrast, isn’t tradable, and thus would never be classified as a security.”

Read more: 'SEC has a tough job, but clearly XRP is not a security' Brad Garlinghouse says

The backlash from this latest article was perhaps more fierce than the first, with the XRP army out in full:

Read more: Ex-Facebook developer: 'Ripple is centralized, FB going to eat their lunch'

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