Ripple wants to be something more than ‘just’ a blockchain company, it wants to become the Amazon of the cryptocurrencies, going far beyond its original business. Initially, Ripple focused its business on payments, creating a platform for financial institutions to process their clients’ transactions.
The company also has its own cryptocurrency, XRP, which has become bigger than Ripple’s technology activities. Thus, the value of the company is more tied to the currency than to the technology business, as told by a former Ripple executive to the Financial Times.
Search for innovations justifies currency price
Brad Garlinghouse, the company’s CEO, echoes the statement about the company’s dependence on XRP. “We are a capitalist, we have many XRP”, he said to the Financial Times. “So do I care about the XRP market overall? 100%”. However, he noted that Ripple seeks to “deliver many utilities through XRP”, which justifies the price of the currency.
But according to the British newspaper, the company wants to go further in an attempt to justify the high total value that its digital tokens have reached (US$ 30 billion). The idea, as explained by Garlinghouse, is to become a broader blockchain platform — just as Amazon has expanded into other areas of e-commerce
The company has distributed resources to stimulate the creation of apps that promote a broader use of blockchain. This can indirectly benefit Ripple itself, the newspaper says. CoinTelegraph recalls that Ripple created an open source developer platform last year. However, this was restricted to finance applications. And now it looks wider.
Change bumps into differences between Ripple and Amazon
“Amazon started as a bookstore and sold only books. In our case, we started with payments”, Garlinghouse said. “Two years from now, you’ll find that Ripple is for payments what Amazon was for books.”
For the executive, this new stance is not a total change of course, but an extension of Ripple’s strategy.
The strategy, however, may run into a difference between Ripple and Amazon. Unlike Jeff Bezos’ company, the blockchain start-up didn’t have much success with its first app. Therefore, it does not have a significant active user base for which it can sell its services.