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XRP is centralized - it was issued by a centralized corporation, the ledger is permissioned (which is why it’s so fast) so not just anyone can join the network

XRP is centralized - it was issued by a centralized corporation, the ledger is permissioned (which is why it’s so fast) so not just anyone can join the network in a meaningful way, and the way it was distributed is highly suspect. Cryptocurrencies like bitcoin are entirely different. Ripple is not like bitcoin and the regulations of the USA and other countries will affect bitcoin’s value but not determine bitcoin’s continuing existence unlike XRP.

greggturkington 6y ago
This is also why the SEC can sue Ripple but not, say, Vitalik Buterin. They specifically do not consider BTC, ETH and other currencies as securities.
- seibelj 6y ago
  Correct - they explicitly said BTC and ETH are not securities. However ETH's launch was conducted via ICO, where people sent BTC in return for ETH, and the exact same launch style was later declared de-facto illegal security sales with companies being penalized. The SEC essentially caved to the crypto industry and said (paraphrasing) "Yes, ETH was launched as a security, but it became 'decentralized enough' where it is now a commodity". But gave no guidance on how any other coin could become "decentralized enough" to accomplish the same feat, to the detriment of the US crypto industry which has fallen way behind offshore entities.
  - ineedasername 6y ago
    I read that more as the SEC saying "We didn't reall know what we were dealing with at the time." And their thinking and policy decisions have evolved.to fit both their understanding and evolving crypto scene.
    - noxer 6y ago
      Same should apply to XRP then because it exist way longer than ETH. But unlike ETH, XRP was never sold in return for and arbitrary amount of BTC/USD it was first given away for free and later sold at market value.
      - arcticbull 6y ago
        I think they should shut them both down :)
        noxer 6y ago
        Why? Does it hurt you? Its all just a huge tech experiment just like the internet was. We have no clue where it leads to but I want to see it in 10 or 20 years.
        arcticbull 6y ago
        What I mean to say is they should both be regulated as securities which is what they both are. And yeah it's fly by night unregulated attitude hurts plenty of people. Doesn't have to hurt me to be bad.
        noxer 6y ago
        A security of what? Just because it does hurt people doesn't make it inherently bad. If you could avoid being hurt maybe other can too and thous who did get hurt anyway took the risk on purpose. Noting wrong with that. The SEC should prevent people from misleading or fraudulent offerings not from anything that has a known high risk. Selling a random token is like printing my own money. The SEC would not prevent me form selling worthless piece of paper if I dont mislead buyers into thinking its some kind of ownership for something. There is a difference between preventing fraud and preventing stupidity.
        arcticbull 6y ago
        > “A security of what” There’s a legal test called the Howey test you can use to find out if what you’re looking at is a security. [1] Roughly speaking a security is anything you put your money into with the expectation of it becoming worth more through no effort of your own. > “Selling a random token is like printing my own money. The SEC would not prevent me form selling worthless piece of paper if I dont mislead buyers into thinking its some kind of ownership for something.” You seem to misunderstand the definition of a security but even if you were right the conversation doesn’t end there. The SEC absolutely has a mandate under the Securities Act to stop people who could be hurt by garbage offerings from buying them. They got this because permitting random unregulated securities sales in part led to the Great Depression, and they didn’t call it that because it was a pretty good depression. Sale of hot garbage on margin to folks who had no idea what they were doing destabilized the entire American financial system for a decade. This is totally fair because if folks, especially poor folks, get wiped out they end up on public assistance. That means gains are privatized and losses are socialized. The SEC drew a totally reasonable middle ground line with the accredited investor rules. Accredited investors can buy all the hot garbage they want. Folks who can’t afford to can’t. That’s what securities registration gets us. You may not agree with it but it is strictly their mandate. [1] https://www.investopedia.com/terms/h/howey-test.asp https://www.investopedia.com/terms/h/howey-test.asp
noxer 6y ago
>XRP is centralized Useless statement XRP is the token there is no definition what makes the token centralized or not. Half the tokens owned by one party? or maybe a quarter is enough already? Its a useless statement as there is no common definition. no one talks about token decentralization anyway. Its about the control over the network that should not be centralized. >the ledger is permissioned This is factually wrong. Anyone can transact on the ledger there is no permission required form anyone and no one has the power to exclude someone. >so not just anyone can join the network in a meaningful way Also factually wrong. You can "join" the network in any possible way (node/full node/validator/participant/developer/you name it). You can change the code and send in you amendment. If 80% think is worth adding its added. If not its probably because the proposal was garbage not because someone has the power to block your amendment. So far there has been 1 amendment not supported by ripple that still reached the 80% support. Ripple could do absolutely nothing against that. XRPs existence is also not determined by the USA. XRP would exist without ripple or the USA as long some people run the software it exists. Even if all would go offline it could be restarted any time.

greggturkington 6y ago

This is also why the SEC can sue Ripple but not, say, Vitalik Buterin. They specifically do not consider BTC, ETH and other currencies as securities.

seibelj 6y ago
Correct - they explicitly said BTC and ETH are not securities. However ETH's launch was conducted via ICO, where people sent BTC in return for ETH, and the exact same launch style was later declared de-facto illegal security sales with companies being penalized. The SEC essentially caved to the crypto industry and said (paraphrasing) "Yes, ETH was launched as a security, but it became 'decentralized enough' where it is now a commodity". But gave no guidance on how any other coin could become "decentralized enough" to accomplish the same feat, to the detriment of the US crypto industry which has fallen way behind offshore entities.
- ineedasername 6y ago
  I read that more as the SEC saying "We didn't reall know what we were dealing with at the time." And their thinking and policy decisions have evolved.to fit both their understanding and evolving crypto scene.
  - noxer 6y ago
    Same should apply to XRP then because it exist way longer than ETH. But unlike ETH, XRP was never sold in return for and arbitrary amount of BTC/USD it was first given away for free and later sold at market value.
    - arcticbull 6y ago
      I think they should shut them both down :)
      - noxer 6y ago
        Why? Does it hurt you? Its all just a huge tech experiment just like the internet was. We have no clue where it leads to but I want to see it in 10 or 20 years.
        arcticbull 6y ago
        What I mean to say is they should both be regulated as securities which is what they both are. And yeah it's fly by night unregulated attitude hurts plenty of people. Doesn't have to hurt me to be bad.
        noxer 6y ago
        A security of what? Just because it does hurt people doesn't make it inherently bad. If you could avoid being hurt maybe other can too and thous who did get hurt anyway took the risk on purpose. Noting wrong with that. The SEC should prevent people from misleading or fraudulent offerings not from anything that has a known high risk. Selling a random token is like printing my own money. The SEC would not prevent me form selling worthless piece of paper if I dont mislead buyers into thinking its some kind of ownership for something. There is a difference between preventing fraud and preventing stupidity.
        arcticbull 6y ago
        > “A security of what” There’s a legal test called the Howey test you can use to find out if what you’re looking at is a security. [1] Roughly speaking a security is anything you put your money into with the expectation of it becoming worth more through no effort of your own. > “Selling a random token is like printing my own money. The SEC would not prevent me form selling worthless piece of paper if I dont mislead buyers into thinking its some kind of ownership for something.” You seem to misunderstand the definition of a security but even if you were right the conversation doesn’t end there. The SEC absolutely has a mandate under the Securities Act to stop people who could be hurt by garbage offerings from buying them. They got this because permitting random unregulated securities sales in part led to the Great Depression, and they didn’t call it that because it was a pretty good depression. Sale of hot garbage on margin to folks who had no idea what they were doing destabilized the entire American financial system for a decade. This is totally fair because if folks, especially poor folks, get wiped out they end up on public assistance. That means gains are privatized and losses are socialized. The SEC drew a totally reasonable middle ground line with the accredited investor rules. Accredited investors can buy all the hot garbage they want. Folks who can’t afford to can’t. That’s what securities registration gets us. You may not agree with it but it is strictly their mandate. [1] https://www.investopedia.com/terms/h/howey-test.asp https://www.investopedia.com/terms/h/howey-test.asp

noxer 6y ago

>XRP is centralized Useless statement XRP is the token there is no definition what makes the token centralized or not. Half the tokens owned by one party? or maybe a quarter is enough already? Its a useless statement as there is no common definition. no one talks about token decentralization anyway. Its about the control over the network that should not be centralized. >the ledger is permissioned This is factually wrong. Anyone can transact on the ledger there is no permission required form anyone and no one has the power to exclude someone. >so not just anyone can join the network in a meaningful way Also factually wrong. You can "join" the network in any possible way (node/full node/validator/participant/developer/you name it). You can change the code and send in you amendment. If 80% think is worth adding its added. If not its probably because the proposal was garbage not because someone has the power to block your amendment. So far there has been 1 amendment not supported by ripple that still reached the 80% support. Ripple could do absolutely nothing against that. XRPs existence is also not determined by the USA. XRP would exist without ripple or the USA as long some people run the software it exists. Even if all would go offline it could be restarted any time.