On February 6th, 2018, the BitMEX research team released a piece titled “The Ripple story” in which they systematically dismantle Ripple’s key value propositions, ultimately concluding that XRP does not “appear to share any interesting characteristics with crypto tokens like Bitcoin or Ethereum, at least from a technical perspective.” A major factor in the result of the evaluation was the reveal of their “distributed” consensus mechanism to be an “unnecessary and essentially pointless” show of smoke and mirrors, with full control ultimately in the hands of Ripple.com. The overall critique on Ripple by the BitMEX Research team is three-pronged: Some background is provided on Ripple’s various pivots before eventually launching the XRP token in 2013.

The main point highlighted was Jed McCaleb taking the lead on Ripple in 2011, after offloading the now-known-to-have-been insolvent (to a figure of 80,000 BTC and $50,000) MtGox to Mark Karpeles. While not a red flag in itself, it certainly makes you wonder the ripple effect of the corporation’s businesses practices as a result of the foundation set by McCaleb.

On this note, it was under McCaleb’s direction that Chris Larsen came on board with the project, who remains an executive chairman to this day. Under Larsen’s guidance, Ripple launched an initial seed round for the XRP token in October 2012.

This direction can be seen as an attempt to follow in Bitcoin’s footsteps and capitalize on the market demand for a decentralized payment network with no counterparty risk. However, built upon what was essentially a central platform, this is arguably like trying to fit a square peg into a round hole – or from a more skeptical perspective, a cash grab following market sentiment.

The first glaring red flag regarding centralization fears was the introduction of the “balance freeze” feature in February 2014. As the name indicates, this “allowed Ripple gateways to freeze or even confiscate coins from any user of its gateway, even without a valid signature for the transaction”. Read more from cryptoinsider.21mil.com…

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