During the Yahoo Finance All Markets Summit, Ripple CEO Brad Garlinghouse expressed his belief that digital currencies are less of a ‘currency’ than some proponents might argue.
In the panel, Garlinghouse cited the lack of real-world opportunities to spend digital currencies as a way to emphasize that they do not have an inherently practical use as a currency.
“I don’t call this cryptocurrency. It’s not currency,” said Garlinghouse, during the Yahoo panel. “I can’t go to Starbucks or Amazon and use—and you know, somebody inevitably will be like, ‘Well, I have one example where I bought something with a bitcoin.’ And then I usually say, ‘Well, did you do a second transaction?’ It’s not actually a currency.”
Instead, Garlinghouse views XRP as an asset tied to its functionality and application as a solution for issues in the real world.
“These are digital assets,” he added. “If the asset solves a real problem for a real customer, then there’ll be value in the asset.”
Garlinghouse also expressed that he doesn’t believe Bitcoin is going away in the near future. However, he further added that he doesn’t think Bitcoin is an apt solution to the payments problem, citing quicker transaction times and lower transaction fees when paying with XRP.
“I am not a believer that bitcoin dies some terrible death,” he said. I don’t think it’s going to solve a payments problem. XRP is 1,000 times faster and 1,000 times cheaper than a bitcoin transaction.”
While Garlinghouse’s statements may seem adversarial, there is an existing pattern of companies walking away from their previous support of currencies like Bitcoin.
Several platforms including Steam and Stripe discontinued their support for Bitcoin payments over the last few months, both citing high transaction fees as a leading culprit.
“Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense,” Stripe said in a post dated January 23rd, 2018.
Here, Garlinghouse’s statements seem to reflect the movement of questioning Bitcoin’s practicality in day-to-day life.
“Are you going to use a bitcoin, or a fraction of a bitcoin, to buy a cup of coffee?” joked Garlinghouse. “Well it’s going to take hours to complete the transaction, and your coffee is going to get cold.”
Ripple and others lowering transaction times and fees
While many may agree with Garlinghouse’s sentiment, some within the community look to currencies like Litecoin, among several others, as an example of progressively lowering transaction fees and transaction times.
Platforms like Ethereum hope to have the same transaction capacity as Visa within a few years, and are actively trying to overcome issues with scaling.
This may be another example of where Ripple finds itself rebelling against the digital currency community, as many projects aim to serve as day-to-day currencies.