Bill Clinton ringed in the Swell Conference for Ripple this Monday, with a speech that was, at first, relatively underwhelming. According to Coindesk’s report on it, Clinton actually said almost nothing about Blockchain technology.
Even so, the fact that Clinton took the stage for Ripple, on the heels of other former government officials like Ben Bernanke, who did so last year, means something.
As Coindesk has suggested, Ripple is making no secret that it stands for and with establishment, contrary to what Satoshi originally rolled out the Bitcoin network for. In effect, this also means that Ripple is appearing more and more centralized.
If we take the debate of centralization versus decentralization in its simplest form, a centralized company actually possesses the data of its customers, while its customers do not actually possess that data. The best possible example of how this works out is in the debate between traditional banks and Crypto networks.
A customer may have an account with a traditional bank and they may feel that they own that money, but in truth, it can be argued that it is the bank who owns that money. The easiest way to understand this is to look at central banks, where traditional currencies come from.
All banks can theoretically create as much money as they can because of loans. When a bank issues a loan, it has made an IOU with a certain party, knowing that all of the money will come back to the bank, with interest. These loans are usually approved and protected by the central banks. In effect, because of all of this, once this happens the bank has just raised its funds, with little risk to its current lines of business.
In the interest of not going too far down the rabbit hole, we will pause the analysis of traditional banking here. Furthermore, the point has already been made. All of this appears to be completely true about the traditional banking space, while with Crypto networks in their purest form, each and every user owns his or her funds completely and the only risk is that their wallets can be hacked, just like any other digital item.
At this juncture, it would be easy to wonder: how does any of this connect with Ripple and their previously mentioned conference?
The answer is quite simple and yet surrounded by a decent level of uncertainty at the same time. Coindesk has argued that essentially, since Ripple is happy to consistently pay top dollar for former government officials to speak, then it is strongly possible that they are not trying to be a Cryptocurrency firm, in truth.
Another way of thinking about this is to use comparison of Ripple to the theory of Schrodinger’s Cat. We will not really know what the company is trying to become until it publicly makes this clear. As of now, it could be a plain vanilla Crypto firm, just looking for its primary use case that will truly help its main product take off.
On the other hand, Ripple could be shooting to be a financial technology firm, in the hopes that doing so would help it avoid the brunt of any upcoming regulations that might be designed to slow Blockchain innovation. Another reason this might be true is that it is just trying to re-brand itself to be more attractive to the traditional finance industry and the government, which see the word “Crypto,” as a sign to stay away.
Whatever the case, it appears that we will not know the answer until the theoretical box is opened.
By: BGN Editorial Staff