All You Need To Know About Ripple’s Future
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Anyone familiar with the cryptocurrency world has definitely heard of Ripple.
The project promises to greatly optimise the high-costs and slow-speeds of Bitcoin transactions by designing a network that catered specifically to the needs of banks and financial institutions alike.
The Ripple Foundations’ token, XRP, has seen a meteoric rise over the last month climbing from USD$0.25 to over USD$3, before correcting back USD$1.4. After recording one of the highest climbs in 2017, at 36000%, and briefly overtaking Ethereum as the second biggest cryptocurrency by marketcap, XRP is now comfortably sitting in third place.
What’s affecting Ripple prices?
The reasons for Ripple’s fantastic growth in recent weeks are varied. The Ripple Foundation has been signing multiple agreements and partnerships with Banco Santander, Accenture, Bank of America, UBS Bank, and more recently, MoneyGram. This has attracted many cryptocurrency investors. The rumours that Western Union could start using Ripple’s system sometime in 2018 further contributed for the excitement.
What is Ripple — do you really know?
Ripple might not be exactly what you think it is and it is worth for any interested investor to understand exactly what it is that lies behind.
Ripple and XRP — are they the same?
In contrast to most cryptocurrencies, the use of the Ripple token is not necessarily connected to the use of the Ripple system. This happens because the Ripple Company offers three different products to the financial institutions it partners with, but only one, the least used of them, actually needs XRP to operate.
1 — The vast majority of Ripple’s partners use xCurrent, Ripple’s cross border money transferring system, which uses the company’s blockchain infrastructure but does not use Ripple.
2 — xRapid, a product for improving liquidity in emerging markets does use XRP, but has so far been adopted by only one relatively unknown nonfinancial player in Mexico.
3 — Ripple’s third product, xVia, is not even available yet. So, Ripple’s successes do not directly correlate with XRP adoption.
So, is Ripple cryptocurrency?
One of the main criticisms targeting Ripple is the fact that the issuing company kept 62% of its tokens, vastly dominating the market. While Ripple has pledged to lock-up most of its stash and progressively release them into the market (to do away with the need for investors to trust the company), Ripple remains exposed to the risks of regulatory pressure that any centralised currency may endure.
In many ways, the fact that it is not decentralised means that many don’t really consider it to be crypto.
Is Ripple a good investment?
Ripple has been around for a long time. Its system has been vastly adopted in developed Asian banking markets and it has been striking partnerships all around the world. It boasts one of the strongest and most experienced teams in the market today and is actively trying to replace SWIFT as the default system for cross-border transactions for banks. If it succeeds, it will become a pillar of our financial system as we know it today.
But Ripple will not be the ultimate cryptocurrency. It is limited to the banking sector, it is centralised, and there are already other systems that can process more transactions per second that Ripple can. It is, on the other hand, a strong, solid company with a lot of room to grow. If you invest in XRP, however, remember that Ripple and XRP are not really the same thing.
Happy trading!
Disclaimer: We are stating our vision and opinions, we are not giving you financial advice and if you invest in this project it is your full responsibility. You are investing at your own risk. Always invest only what you can afford to lose and try to diversify your investments. Finally, do your own homework and learn about the project use case, roadmap and team.
