10 Things You Need To Know About Ripple

Ryan Alex
Ryan Alex
Jul 17, 2017 · 4 min read
  1. What is Ripple?

Ripple is a cryptocurrency designed for the banking sector to make transactions and settlements between banks much faster and cheaper. On average a Ripple transaction takes around 4 seconds to settle, compared to Bitcoin, which takes around 1 hour. In terms of cost savings, using Ripple can save banks’ global settlement costs up to 60%, which makes it well positioned to completely transform the global financial settlements industry.

2. What’s the downside with Ripple?

Unlike most cryptocurrencies, Ripple is not a decentralised protocol. What does this mean? Well let’s take Bitcoin for example, one of the main ideas behind it is that it is a “decentralised” currency (and the vast majority of other “alt coins” are also decentralised) . This means that it is open source, or in other words anyone can verify the validity of the transactions because the record of who paid who is recorded permanently and distributed to anyone who wants to check. This is not the case with Ripple. It has a centralised ledger (or record), much like the current banking system, you can’t just go into a bank and see which bank account paid who and on what date unless you work at the bank and have access to the data.

The reason some see this as a problem, is because you can verify transactions with Bitcoin and although names and identities remain anonymous, there is a way to identify that one account paid another account X amount of money on Y date, so disputes can be resolved this way. With Ripple, you have to trust that the authority holding the transaction ledger (Ripple Labs) are providing accurate transaction data.

3. What’s the upside with Ripple?

Well the fact Ripple is a centralised project (or protocol) is a double edged sword. On the one hand you can’t just check the open ledger of Ripple as it’s not maintained by a decentralised network. However, the massive advantage of the currency being centralised is that the confirmation of each transaction is much, much faster than Bitcoin. As mentioned average transaction settlement times with Ripple take 4 seconds, compare to Bitcoin’s 1 hour. The cost of a decentralised network is that it takes longer to verify and settle.

4. How many Ripple coins are there?

Ripple has probably the largest total coin (or token) amount out of the most established cryptocurrencies at 100,000,000,000 XRP (Ripple’s acronym). That’s 100 billion Ripple coins! Compared to the total Bitcoin supply of 21,000,000 BTC or 21 million, that’s a huge potential circulation of Ripple.

5. Why is there so much Ripple?

Because Ripple is designed to go after a $14 trillion a day interbank settlement niche, it needs a large maximum supply in order to effectively meet the future demand that the creators of Ripple expect for this coin.

6. What is the potential of Ripple?

No one truly knows, but as mentioned in point 5, Ripple is targeting a $14 trillion dollar a day global banking market, and it is designed to settle payment much faster and much quicker than the current intra-day banking model. Because of this reason alone, some commentators believe that once Ripple is up and running it could tear it’s target industry apart and generate a market capitalisation (total value of Ripple) within the trillions of dollars!

At the current time of writing (14th July 2017) Ripple has a market capitalisation of approximately $8 billion. Making it the third most valuable cryptocurrency after Bitcoin and Ethereum in terms of market cap.

7. Why should I care about Ripple?

Well, whilst the project certainly has ambitious aims to take over an extremely valuable niche within the banking sector, how credible is it? You may be asking yourself.

It already has several high profile financial institutions signed up to the project as clients. At the time of writing (14/7/17), these clients include UBS, Royal Bank of Canada, Santander, Standard Chartered and BBVA as well as many others. With a lot of these clients introducing ways to integrate Ripple into banking applications.

8. What does the immediate future look like for Ripple?

Currently, after undergoing a lot of development and successfully getting some high profile financial companies on board, Ripple is looking to rollout a fully functional platform between some of its Japanese Banking clients in the summer of 2017.

If this is successful, many in the cryptocurrency space expect the price of Ripple to sharply rise as it adds further credibility to the project and crosses the transition point from ambitious project to a battle-tested proof-of-concept.

9. Why haven’t I heard about Ripple until now?

Whilst there’s a lot of hype around cryptocurrencies in 2017, with the Bitcoin price rising higher than the historic peak gold price and sharp increases in the prices of several other cryptos like Ethereum, Ripple is still flying under the radar, even though it is the third biggest cryptocurrency (at the time of writing) in terms of market capitalisation.

This is possibly because the price per Ripple coin has been hovering around the $0.20 mark as of late, so many would be investors still see it as a small project that lacks credibility, even though this is a bit of a misperception. However, bearing in mind that the price of one Ripple token wasn’t even worth $0.01 for much of 2016, this seems to be a project that has generated it’s early investors incredible returns (by crude calculations more than 20x return).

10. Should I invest in Ripple?

I’m not a financial advisor, nor do I understand the intricate complexity of the technical programming that goes with the territory when it comes to most cryptocurrencies. My personal opinion is that it seems like an interesting project with potential. However, the entire cryptocurrency space is extremely speculative and volatile and very few people truly understand all the technical details involved (including economic, political, mathematic, regulatory and computer programming perspectives). I’m neither encouraging or discouraging readers to engage with this project. The purpose of this article is merely to provide new insights. And would suggest you research it yourself and if you are thinking about investing, not to stake more than you can afford to lose.

Visit www.rippleprice.io for more content.


Ryan Alex

Written by

Life, relationships, health, wealth & purpose.

More From Medium

Top on Medium

Top on Medium

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade