Bitcoin is like Napster: an important flop, Ripple CEO says

Ripple CEO Brad Garlinghouse

Of course, Brad Garlinghouse prefers XRP, his own company's cryptocurrency.

Bitcoin launched the cryptocurrency revolution, but ultimately it could be end up more like Napster, which changed the rules of digital music without actually succeeding.

That's the view of Brad Garlinghouse, chief executive of Ripple and a proponent of his company's rival cryptocurrency, XRP. "We may come to find that bitcoin is kind of the Napster of digital assets," he said at Recode's Code Conference.


 "This is transformative technology, but Spotify and iTunes and Pandora rule the day because they engaged with regulators to solve a real problem."

Cryptocurrencies and blockchain, the accounting technology that powers them, face an uncertain fate. Big businesses, including Intel, IBM and Microsoft, as well as countless startups, are betting hard on the technology. But scams, confusion, hype and gyrating valuations make it hard to assess what's a good idea.

Garlinghouse is pretty clear he thinks the granddaddy of cryptocurrencies, bitcoin, is now in the bad idea category, at least for its original use, a replacement for ordinary money. Bitcoin's blockchain ledger records transactions on a global network of computers that no single entity controls. But actually buying something is a problem, he said.

"People talk about using bitcoin to buy coffee," Garlinghouse said. "The average bitcoin transaction can take as much as 20 minutes. And the transaction cost is going to double the price of your coffee."
Garlinghouse, unsurprisingly, thinks his company has a better alternative.

Ripple is one of the higher-profile startups in the world of cryptocurrency. Its XRP has the third-largest market capitalization after bitcoin and the Ethereum's Project's ether.

The currency is set up for the finance world tasks like bank-to-bank money payments across borders that settle faster than conventional transfers. Ripple counts big names in banking like American Express, RBC, Santander and Credit Agricole as partners.