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I'm not American, so I curious why they have only two parties?
Their election system (basically winner-takes-all) pretty much guarantees that it will converge in a two-party system with roughly 50/50 share and people voting for "the lesser evil" rather than their favourite. If a third challenger appears, it will split the voter base of the more close candidate and guarantee a huge victory for the farther candidate (the opposite of what the challenger stands for). So essentially it's doomed to be a bipartisan circlejerk unless the election system itself is changed.
Ranked choice voting seems to be the solution
However, both parties are against it because neither want to give up power
Some states have switched over to ranked choice for some if not all of their elections. Alaska is a big one - nearly every election on the ballot is ranked choice.
Maine also allows it for their presidential elections. Originally, it would have been used for their gubernatorial, state legislature, House, and Senate elections, but the state Supreme Court ruled it was unconstitutional since the state constitution required a plurality to win.
Nevada is also likely to approve it for their primaries.
Many other states use it to some degree at the local level. Unfortunately, we're unlikely to see much progress nationwide without a major shift in politics.
Correct. Also worth saying that because it was designed by rich white male British colonists over 200 years ago who deliberately made it almost impossible to change, our system is hopelessly outdated and very difficult to upgrade. This is especially true when there are certain demographics that get a ton of over representation through the existing system.
There are more parties than two, they just aren't very popular
That's a common fallacy. There's really just one party with 2 factions that pretend fight but really fight when any other party tries to pop in.