Is Ripple a Wolf in Sheep’s Clothing?

Is Ripple a Wolf in Sheep's Clothing?


Cryptocurrency platform Ripple markets itself as decentralized, but concerns arise about its true nature. Critics argue it operates as a centralized system with an unfair distribution of XRP coins through pre-mining and questions about its adoption among financial institutions. Some see Ripple as a “wolf in sheep’s clothing,” potentially hiding a more sinister or self-serving agenda.

The Origins and Evolution of XRP: From Ripple Labs Inc. to Brad Garlinghouse’s Leadership

Ripple Labs Inc., founded in 2012, created the currency XRP. Chris Larsen and Jed McCaleb founded the company. McCaleb is the person behind the popular Bitcoin exchange MtGox. He left Ripple to start a new cryptocurrency called Stellar Lumens (XLM). The head of Ripple today is Brad Garlinghouse, who serves as CEO and has previously worked as Senior Vice President for Yahoo. Chris Larsen is still on the board and currently serves as executive CEO.

Targeting the banking industry and financial world, XRP/Ripple boasts over 100 confirmed partnerships with financial institutions. It is important to note that most of these institutions have confirmed that they use Ripple technology and not XRP; it is possible to use Ripple’s technology without using their cryptocurrency XRP, which SBI Holdings and American Express have confirmed they are doing.

The 2017 Bull Run: From Less than a Cent to Over 3 Dollars

XRP has been a regular feature in the top 10 on Coinmarketcap for a long time. It shot up in December 2017, when the price went from around 25 cents to over 3 dollars.

The XRP price increase was enormous in 2017; it started with a price of less than a cent and ended the year at around 3 dollars. That’s an increase of several thousand percent! The first significant increase was from less than a cent to about 40 cents in the spring before it fell to around 20 cents. The second significant increase was from 25 cents to about 3 dollars in December.

Simply put, the purpose of XRP/Ripple is to increase transaction speeds for foreign transfers. Using XRP and Ripple technology, transferring any amount from, for example, Norway to Japan in about 5 seconds is possible. The transfer is done by transactions going through Ripple’s Interledger Protocol (ILP).

The process illustrated above takes only a few seconds, which is why this cryptocurrency targets banks; it would be possible to send money from a bank in one country to another continent within a few seconds. Something much faster than today’s SWIFT system, where a transaction from country to country takes a few days.

The Purpose of XRP: Faster International Transactions

The XRP coin does the same thing as the ILP, but Ripple claims it saves banks 30% by using XRP instead of just ILP. Ripple’s plan mainly aims to get financial institutions to use the ILP and then tell them they can save 30% by using XRP. 

However, there are big question marks as to whether this plan will succeed or if XRP will ultimately collapse by fewer use cases. What is certain, however, is that the company Ripple Labs INC will succeed regardless of how XRP fares.

In the crypto communities, XRP is highly controversial, and this is for several reasons. The main one is that it is not decentralized, which goes against what cryptocurrency was started for, even though Ripple claims it will be decentralized in the future.

Another controversial topic is that the founders of Ripple took 20% of the pre-mine for themselves. It is impossible to mine XRP, for example, with Bitcoin or Ethereum. All coins were created simultaneously before being released on the market. Out of all these coins produced simultaneously, the owners took 20% for themselves. This made Ripple founder Chris Larsen the world’s 5th richest man on paper – the same size as Mark Zuckerberg.

XRPs Competition:

  • The SWIFT system: As of today, this is the most significant player in the market that Ripple is trying to overtake. They have more or less had a monopoly since the 1970s, although Ripple hopes to replace it if optimal adoption happens. 
  • Stellar Lumens, also known as XLM, is a so-called “fork” of Ripple. This is the project of Jed McCaleb, one of the founders behind Ripple. The most significant difference is that Stellar is non-profit and decentralized, while Ripple is not. Another critical difference is that it will be possible to run ICOs on Stellar.


  • Ripple is a decentralized platform that aims to make international money transfers faster and cheaper using its XRP cryptocurrency and Interledger Protocol (ILP).
  • Ripple allows for near-instant money transfers, much faster than traditional methods like SWIFT.
  • Ripple’s team is known to be easily accessible, actively engage with the community, and respond to questions.
  • Cheaper for banks to use than current solutions, achieved by using Ripple’s ILP and XRP, which removes the need for intermediaries and reduces the cost of currency conversion.
  • Allows for buying XRP directly with regular money, making it more accessible to a broader range of users.


  • Ripple markets itself as decentralized but currently operates as a centralized system.
  • The cost of creating an XRP wallet and the fee are not refundable.
  • XRP coins were pre-mined, meaning that the company’s founders retained 20% of all the coins in circulation, raising concerns of unfair distribution and founders having an unfair advantage.
  • Few financial institutions have confirmed that they are using XRP. Some only plan to use the technology, not the cryptocurrency.
  • It raises questions about the utility and adoption of XRP within the financial industry.