Yerevan (CoinChapter.com) – Elon Musk, the multibillionaire entrepreneur and CEO of Tesla, who recently took a step backward from his initial stance on Bitcoin, should consider Ripple Lab’s XRP token instead, as an alternative for digital payments, offered Kevin Cage, a financial analyst, and a crypto investor.
The analyst referred to Peter Thiel, the co-founder of PayPal, and a “good friend” of Mr. Musk from the ‘PayPal mafia’ times. Thiel was one of the investors who spotted Facebook’s potential early on. He also invested in OpenCoin’s Ripple.
Mr. Cage points out XRP as an alternative to Bitcoin if the entrepreneur is worried about carbon emission.
Tesla announced in April 2021 that from that point on, the company would accept Bitcoin (BTC) as payment for their electric vehicles. The electric car giant, however, defied its initial position on crypto, rather quickly. Mr. Musk took on Twitter to announce that the prior arrangement would no longer be valid, as he is worried about the ecological repercussions of mining Bitcoin.
Admittedly, It is complicated to compare Bitcoin’s carbon footprint to that of XRP. The sheer difference in transaction volume makes it difficult to calculate which of them is ‘greener’.
Is XRP greener?
Bitcoin is a decentralized cryptocurrency that relies on a proof-of-work algorithm. In other words, mining a single coin requires enormous computing power, hence, electricity consumption. According to Reuters, Bitcoin’s annual mining consumed the same amount of energy as the Netherlands in 2019. The mining process is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year, or between the levels produced by Jordan and Sri Lanka.
Some crypto proponents like the entrepreneur and investor Anthony Pompleano claimed that most of that energy is generated from renewable sources, as he replied to Tesla CEO’s concerns.
While there is much debate on the subject, and Pomp’s estimation is hard to confirm or deny, XRP takes a different approach.
Ripple Labs has vouched to erase its carbon footprint completely by the year 2030. The company is initially a provider of enterprise blockchain solutions for payments, and its XRP tokens are pre-mined. Banks and money transfer companies use XRP to bridge asset transfers, with the network able to manage more than 1500 transactions per second. As the startup announced back in 2020:
In partnership with Energy Web Foundation, Ripple has co-created EW Zero, a new, open-source tool that will enable any blockchain to decarbonize through the purchase of renewable energy in local markets worldwideRipple stated.
XRP as a payment token
Worldwide financial solutions giants like MoneyGram and American Express have partnered with Ripple and used XRP as an intermediary between payments. The former started using XRP in 2019 and the stock price rocketed to 160 percent right after the partnership announcement.
Back in July 2017, Bank of England partnered up with Ripple, to further explore the proof-of-concept possiblities. As the bank stated in the release:
We carried out a proof of concept with Ripple to explore the synchronised movement of two different currencies across two different real-time gross settlement systems linked using Ripple Connect and the Interledger protocol. We wanted to demonstrate how this kind of synchronisation might lower settlement risk and improve the speed and efficiency of cross-border payments.stated the Bank.
XRP looks like a viable option for money transfers and payments for companies like Tesa. However, an ongoing battle between its company and a law enforcement agency greatly influenced the token price on the market.
Ripple vs SEC
XRP’s price mirrored the proceedings in the lawsuit involving Ripple Labs. The Securities and Exchange Commission (SEC) filed this lawsuit against the blockchain startup and accused it of selling $1,3 billion worth of XRP tokens illegally. The lawsuit initiated back in Dec 2020, but as many XRP investors hope, is coming to a close.
The token maintained a bullish sentiment, as it was still trading in a symmetrical triangle in the European session Friday. The formation indicated a breakout in early June if the prediction pans out.
Bitcoin and XRP are different in terms of not only transaction volumes, and status, but also in terms of purpose. It is hard to compare the two in any way. However, Kevin Cage’s initial proposal to use XRP instead of Bitcoin for electric car payments seems to have merit.