According to the CEO of the company, Brad Garlinghouse, Ripple is following in Amazon’s footsteps.
In fact, according to the Financial Times, Garlinghouse said that the extension of the company’s strategy will turn Ripple into a more comprehensive blockchain platform, similar to how Amazon has become a vast e-commerce platform starting from an online bookstore.
“Amazon started as a bookseller and just sold books. We happen to have started with payments. Two years from now, you’re going to find that Ripple is to payments as Amazon was to books”.
To tell the truth, the parallelism seems quite forced, because the points that Amazon and Ripple have in common don’t seem to be many at all.
The differences between Amazon and Ripple
Amazon was born in 1994, and at the beginning, it was not taking off, so much so that the first profits came in 2002, which was eight years later. Furthermore, it was only listed on the stock exchange in 2010, sixteen years after it was founded.
Ripple was founded in 2012, and in these first eight years it has already grown a lot. In addition, it is expected to go public relatively soon, so the path it is following does not seem particularly similar to that of the e-commerce giant.
Moreover, it would not be absurd to imagine that the comparison with Amazon is mainly due to propaganda purposes since Amazon is now one of the best-performing stocks on the financial markets.
As the Financial Times points out, eight years after its launch, Ripple is still trying to find convincing uses for its blockchain, which is why it has made the decision to use its platform to support activities that go beyond the original idea of a system for cross-border payments.
Perhaps the comparison with Amazon rather than being an analogy is a desire, in the hope of overcoming the current limits of the company’s growth by expanding the use of its technology to areas not previously considered.
As for the fact that the company still owns huge amounts of XRP, and sometimes sells them to generate revenue, Garlinghouse has admitted that Ripple is strongly influenced by them, and that he is definitely interested in the market value of XRP.
On the other hand, offering utility to XRP owners will probably take several more years, thanks to new applications using this blockchain.
For now, Ripple’s success seems to be concentrated only in one market, that of remittances, and it has not been achieved without incurring costs.
For example, MoneyGram, which was purchased by Ripple some time ago, obtained $31 million from Ripple itself in commissions for market development and to encourage the use of XRP, equal to 60% of its operating profit.
Last year Ripple distributed the equivalent of over $500 million in total, much of it in XRP, thanks to its Xpring fund, to convince developers to create or bring new applications to its platform.
So far, none of these investments seem to have led to a significant increase in the use of the platform.
For this reason, a new strategy has been developed, which instead of funding developers, aims to directly develop new applications on the Ripple blockchain.