Ripple CEO Brad Garlinghouse made headlines last week for holding an AMA. That AMA has been criticized, however, for revealing little interesting information about the secretive company.
“Ripple: Ask me anything, but I may tell you nothing,” explains Mark Rogowsky in a blog post following the Ripple AMA last week. “The cagey crypto company circumvents the tough questions.”
Ripple is a private company best known for its XRP digital token. Ripple is seeking to partner with financial institutions – including some of the world’s largest banks – to provide blockchain technology. The controversy about Ripple is with its connections to XRP. There’s controversy over whether or not XRP is considered a security, for example.
There’s also controversy over Ripple’s control over XRP. Ripple – the company – holds billions of XRP tokens. In fact, they hold about 60% of all XRP in the world – or 60 billion tokens. The value of XRP can also be expected to increase as the value of Ripple – the company – increases.
The problem with Ripple and XRP is that the company periodically sells some XRP to fund itself and build its war chest. The company has a stash of XRP that it is gradually selling off. The big question for investors is: what happens when that stash runs out?
Did Ripple CEO Brad Garlinghouse address these questions in his AMA? Let’s take a look.
The Brad Garlinghouse AMA
On August 22, Ripple CEO Brad Garlinghouse participated in an “Ask Me Anything”, or AMA. The AMA was led by former Bloomberg journalist Cory Johnson. Although Johnson used to work for Bloomberg, he now works as Ripple’s Chief Marketing Strategist.
People criticized the AMA right away. The point of an AMA is to be “asked anything” by an audience of users. With the Ripple AMA, the questions were pre-filtered and pre-screened, then asked by the company’s marketing team. It’s not a “true” AMA.
The AMA went as predicted. Softball questions were thrown, and Ripple avoided answering any tough or controversial questions about the company. Nevertheless, the AMA dove deep into the technical of Ripple’s connections to XRP.
Some of the highlights from the AMA included:
- Garlinghouse mentioned a statement from Ripple CTO David Schwartz, who wrote a post called, “The Inherently Decentralized Nature of XRP Ledger.” In that post, Schwartz attempts to claim that XRP isn’t controlled by Ripple. He also claims that Ethereum and bitcoin, despite being the “gold standards” for decentralization, are far more concentrated than XRP.
- To justify his claim that ETH and BTC are more centralized than XRP, Brad Garlinghouse and Schwartz mention that a handful of mining pools have big sway over bitcoin.
- It’s also mentioned that control of the XRP ledger requires 80% of the so-called validators on the network to support the change over a two week span. Ripple controls just 10 of the 150 validators, which means it doesn’t have any special sway over the network.
- Nevertheless, Rogowsky claims that Ripple still have some control over validators on the network. “Now, you have to earn trust of other validators but the process for doing that is mostly by being recognizable and performing well. Given Ripple’s nearly unlimited resources and credibility as an XRP validator, it could surely rapidly roll out additional validators.” You can view the procedure for becoming a validator on the Ripple network here.
- Ripple also has sway over validator selection because users on the XRP Ledger select a “Unique Node List”, or UNL, which is a list of validators trusted by that user to order transactions. The network has a number of recommended UNLs, including a list created by Ripple itself. Users can choose whichever one they prefer or create their own. But let’s be honest: if users are given the choice between creating their own list of validators or using the list provided by a centralized authority, most users will pick the centralized authority list.
- At 19:05, Garlinghouse gets asked about his socks
Ultimately, Rogowsky sums up Ripple’s AMA with this:
“After all, if you had a machine that could print money, wouldn’t you go to almost any length to protect it? We’ll try to submit a question like that to the next Ripple AMA. Maybe they won’t find it too “mean” and give us a straight answer.”
The AMA wasn’t as soft as many predicted, but Ripple also avoided some tough questions. Garlinghouse spent much of the AMA trying to convince people that XRP is a decentralized digital token and that Ripple the company has limited control over the network. Nevertheless, Ripple continues to be the world’s largest holder of XRP. As long as they sell that XRP and continue reporting XRP sales as a significant chunk of company revenue, there will be controversy over Ripple’s connections to XRP.