Here’s why XRP and Ripple should not be considered as one and the same:
Ripple is a company in its own right, currently capitalised at circa $342B Market Cap, and ranking tenth in the World.
Ripple has been amazingly successful. From 2012–2016, Ripple raised $93.6 million from Andreessen Horowitz, GV (Google Ventures), and many more of the top VC firms in Silicon Valley.
These are the kinds of the firms that routinely invest in startups like Facebook, Slack, and Uber and them backing Ripple means they believe in the company mission and believe in the team.
The market Cap of XRP today is just over $50B.
When people hear Ripple they instantly think of their coin XRP.
This makes sense since other communities and coins are one and the same. When you buy ETH you are betting on Ethereum and when you buy BTC you’re betting on Bitcoin.
Why would Ripple be any different?
Well, this is where things become interesting. To understand the differences between XRP and Ripple, first we need to examine Ripple the company.
Ripple was founded in 2012 as Opencoin, renamed to Ripple in 2015, and is currently based in San Francisco, California. They have more than 150 employees, a nice office, and they sell banking software that uses blockchain.
What does Ripple do? They have 3 products — xCurrent, xRapid, and xVia.
Remember that impressive 100+ list of financial institutions Ripple is working with?
Guess what, they are all using xCurrent. And xCurrent does not use XRP.
Of the 100+ partnerships Ripple has, ONLY ONE actually uses XRP the cryptocurrency. There is just one small “non bank financial institution” from Mexico called Cuallix that is using xRapid.
This means that the headlines showcasing Ripple’s partnerships with more and more banks are good — Ripple the company is succeeding — but also don’t mean much for XRP gaining adoption. XRP and Ripple are not the same at all.
Now this isn’t to say that banks will never adopt xRapid (and start using XRP). In fact, this has been a part of the Ripple business plan from the very beginning. Get banks using xCurrent and then cross-sell them into xRapid. Banks may come to love xRapid.
Or they might not.
For Ripple this difference doesn’t matter much.
For investors in XRP, this is the difference that makes or breaks their investment.
Stop Press: In January 2018 it has been announced that Moneygram have partnered with Ripple and will adopt their XRP product.
I’m not sure what volumes that might entail but looking at Moneygram’s accounts, they don’t appear to be a major player.
55B XRP Transferred into Escrow
Since the inception of XRP, the Founders held onto 55B XRP which has never been released into the market.
Arguably this tranche of XRP could make them incredibly wealthy and can definitely skew the overall market for XRP.
In an attempt to alleviate at least some of these concerns, in December 2017, 55B XRP were transferred by the Founders of Ripple into escrow, to be released into the market at the rate of circa 1B each month.
I can’t for the life of me see how that can possibly benefit people who might be buying XRP as a speculative investment.
Extract from article by Hackernoon.