author Jason Bloomberg calls the Ripple business model a pump and dump scheme, because it experiences many activities to increase the value of the XRP crypto currency. Unlike most pump and dump cryptos, Ripple takes many steps to obscure this basic fact. However, Ripple Regulator Relations Director, Ryan Zagone, explained that Ripple does not make XRP alone, because XRP is open source. "Ripple shares on XRP - which amount to more than half of the available tokens - were given by several open source developers who created XRP," explained Ryan Zagone. However, Jason Bloomberg wrote that Zagone was not honest, because Ripple stated that it could process XRP transactions, which basically made XRP centralized. As a result, many people in the crypto community do not consider XRP to be a crypto currency, because the XRP is not decentralized.
One of Ripple's strongest indicators is dozens of customers. Looking closer, most of them are partners, not customers, and even Ripple pays the company to become a partner. This is mentioned by Bloomberg that Ripple uses part of its free XRP token to build the illusion that customers have paid, when in fact Ripple pays them, not vice versa. Ripple's goal stated this incentive program was to reduce liquidity costs. Liquidity costs are actually at the heart of Ripple's international payment product strategy, so that XRP functions as an intermediary currency. Banks or other institutions must maintain sufficient XRP reserves to respond to transaction requests. Maintaining liquidity in the XRP does not solve the core problem by transferring money from countries that have a stable currency to a less stable country, because such transfers usually only go in one direction. For example, for financial service companies that handle payments from the US to Guatemala, it is necessary to have liquidity in Guatemala Quetzals to withdraw payments. Liquidity in XRP will not be useful.
Ripple makes money by pumping XRP values. It seems that Ripple executives are too happy to show this fact. "We have around 60 billion XRPs with an estimated value of around US $ 10 billion," bragged David ‘JoelKatz’ Schwartz, CTO at Ripple. "We really want to improve and realize that value. We control speed and XRP requests. For everything I do, I think what's the best for the XRP ecosystem, "he said. The pump and dump scheme, of course, increases the perceived value of the asset in question, not its intrinsic value which is separate from speculative interests in assets. That's why the experts were very surprised. "I have a hard time understanding, even if many banks use Ripple to move billions of dollars, why does that increase the XRP value?" Asked Timothy Enneking, Managing Director of Digital Capital Management. The CEO of Atlantic Financial Blockchain Labs and the founder of the Bitcoin Foundation, Bruce Fenton, mentioned on Twitter that Ripple had dishonesty.