In an age where crypto analysis is constantly evolving, some sentiments retain their meaning. This was underlined when XRP influencer Crypto Eri dug into a statement from Ripple CTO David Schwartz, which, although over five years old, still resonates relevantly in today’s cryptocurrency discourse.
When Crypto Eri shed light on this older answer from Schwartz, she returned to a debate about the value dynamics of XRP. The question, from Quora, was accompanied by speculation that institutions would prefer the price of XRP to remain low to optimize transaction processes. However, Schwartz’s comprehensive clarification revealed an opposing perspective.
Ripple CTO weighs in on XRP price and liquidity
Schwartz articulated that the suspicion that banks or financial entities want a moderate XRP price is exaggerated. Pointing out a fundamental connection, he stated: “Higher prices tend to correlate with higher liquidity, which means cheaper payments.” To further clarify this, he ventured into the intricacies of how XRP functions as a payment medium.
Schwartz drew an analogy with Bitcoin and offered a more vivid understanding. If someone were to trade $1 million at a time when Bitcoin was valued at just $100, the liquidity constraints would cause significant price volatility. As Schwartz explained: “…if you tried to buy enough Bitcoin to buy the house, you would significantly increase the price. And if the recipient tried to convert those bitcoins into their local currency, they would drop the price significantly.”
However, as Bitcoin rose and crossed the $10,000 threshold (at the time of Schwartz’s contribution), its vulnerability to price fluctuations for larger transactions had decreased. Schwartz attributed this stability to increased value, which requires a smaller portion of total assets to accommodate significant transfers.
In drawing parallels, he emphasized that XRP behaves similarly. Therefore, a rising XRP price would undoubtedly make it a superior channel for high-quality transactions for the Ripple payment solutions.
Schwartz clarifies (more) rumors
In addition to this age-old but continually relevant perspective, Schwartz remains active in educating the community on various XRP-related questions. Schwartz addresses a recent Twitter suggestion that XRP could potentially strengthen the top 1% replied with a rebuttal: ‘I’m not sure I understand this statement. The top 1% of what exactly? XRP allows anyone to use the ledger to track asset ownership and exchange. What control exactly is he talking about?’
On speculation about the Department of Homeland Security’s ability to “hack” XRP, Schwartz demystified: “I’m not sure what a hack of XRP would even mean.” The contents of the ledger are public. The rules are public… Such a bug is of course not known. And every bug that is exploited is fixed, so you can’t hack it the same way twice.”
Finally, when Schwartz examined the connection between an old patent of his and XRP’s architectural design, he explained, “I can’t see any real connection between my patent and the XRPL design… the patent became largely irrelevant.”
At the time of writing, XRP was trading at $0.4952.
Featured image from Shutterstock, chart from TradingView.com