It has been a long time since we looked curiously around the landscape of the cryptocurrency market, hoping to notice some interesting phenomenon. Despite the fact that years have passed since the price peaks, interesting things are still happening. The retreat of people from Bitcoin and cryptocurrencies has caused less interest and, in a way, peace and quiet around the topic, from the other hand side. We are looking closely at the Ripple cryptocurrency, which seems to be forgotten by a wider group of enthusiasts.
What is Ripple XRP?
The Ripple cryptocurrency, or rather the XRP token, is a new generation cryptocurrency intended for banks and financial institutions. The Ripple network connects banks, financial service providers, exchanges and brokers, and allows you to transfer money quickly and globally. By using the Ripple cryptocurrency (which is based on blockchain technology), financial service providers can significantly reduce the posting time of transfers and money transfers and reduce the cost of foreign capital transfers. The Ripple cryptocurrency was a favorite by Asian cryptocurrency investors as a replacement for Western Union, and initially, the XRP rate went up sharply in the event of a large group of users being acquired.
Ripple is a settlement system designed for banks and financial institutions, based on tokens whose supply is controlled by the creators of the system. The early version of the project started around 2004 (before Bitcoin!!). Ripple, more precisely XRP, credits have a protective function in the system of settlement of transactions, certificates, IOU. Each settlement destroys (“burns”) a certain amount of Ripple irretrievably. When the number of transactions increases significantly, the cost also increases significantly, thanks to which, in the event of, for example, a DDOS attack, the attacker quickly goes bankrupt. The billing system, i.e. account book – ledger, monitors the status of accounts in the system in order to detect possible conflicts and problems. Ripple can also perform a billing function if the parties to the transaction operate in different currencies. The parties then settle symmetrically in XRP.
At the beginning, 100 billions of XRP were established: 100,000,000,000. 80 billions were transferred to Ripple Labs for financing development and further distribution. We currently have 38 billions in circulation. Despite the fact that transactions in the system entail the destruction of XRP, the future of the currency is not threatened, especially since the unit is further divisible (the so-called drops, i.e. 0.000001 part of Ripple). The Fee can be for example 10 drops.
It follows from the above that in Ripple there is a kind of monopoly. The controlling hands of the currency have a large number of units of the currency and the ability to decide when and whether to release them to the market. In practice, many of the early-programmed Ripple have been used to invest in emerging cryptocurrency projects with potential. This makes the Ripple consortium one of the largest investors in the blockchain industry. The sum of investments exceeds hundreds of millions of dollars (!).
How to use XRP?
Let’s start with checking real time XRP price. The Ripple exchange rate is offered by many sites with cryptocurrencies, including exchanges. For uninvolved investors, an aggregating site of the CoinMarketCap type is sufficient. However, traders must pay close attention to Ripple’s price wherever they trade. Exchanges that have the highest Ripple turnover, such as Binance, are best for this, and due to the lack of willingness to risk on Asian exchanges, it may also be BitFinex. You can also use the smartphone application for a quick check or simply go to the stock exchange website on your mobile phone.
Where and how to buy Ripple XRP?
If you are a smart investor, before buying, check exactly how much you will pay using the exchange. Most of these are places with high fees. The exchanges with the lowest commission (0.2% for the entire transaction) are located in China, the most popular of which is Binance.
Other cryptocurrency exchanges that allow you to buy Ripple make up a long list, and one of the most popular is secure BitFinex. You must get Bitcoin in advance to buy Ripple. The fastest BTC purchase can be made at a local Bitcoin ATM, where the purchase conditions depend on the current price displayed on the screen.
It cannot be denied that XRP is mostly bought for speculative purposes. No individual user will find a use for this cryptocurrency in everyday life. It is difficult to find a counterparty to pay Ripple for goods or create an application where the medium of exchange is Ripple. This doesn’t stop a wide variety of investors from flowing into this crypto.
Ripple’s turbulent history with alleged manipulation
Ripple’s token, XRP, experienced in the past an outstanding rally that brought it to levels of almost $ 4 for 1 XRP. Investors who bought XRP the year before were able to enjoy solid returns, not to mention those who realized profits during the peak period.
This didn’t last long. Afterwards, for a long time, Ripple’s price has been hovering around 20-50 cents for 1 XRP and this level serves as a solid support during market volatility. Was it profitable to buy Ripple at this price? The future shows that XRP has not returned to the top levels, with 10 cents being the most solid support followed by 20 cents for 1 XRP. How many investors have survived such a big drop in price and no big rebound?
Ripple broke records of popularity during the cryptocurrency bubble. XRP became so popular that it overtook Ethereum by several billion in the capitalization of the entire market (admittedly for a few days, but …). Now, Ripple capitalization competing with Ethereum is no longer the case.
How was the peak of the Ripple popularity? One of the most important changes to the Ripple project was the entry of XRP into mainstream media. There are many smaller events that can be mentioned, such as starting a partnership with American Express and other banks, or increasing XRP turnover. The most important, however, are the mainstream media appearances, which increase awareness of the existence of cryptocurrencies, and people gain the opinion that Ripple is a real and developmental project. Examples of such events are, for example, an interview with Ripple project leader Brad Garlinghouse on CNBC prime time or a live Ripple payment (!) On the most popular American talk show Ellen.
The technology of Ripple XRP
Ripple technology is not entirely decentralized, but… it works. Doubts about the scalability of blockchain-based cryptocurrencies also apply to Ripple. On the other hand, when Bitcoin saw a red-hot conflict over the possible number of transactions, in the case of Ripple the topic was won in advance: 1,500 transactions per second is a level unmatched for both traditional Bitcoin and its new incarnation with SegWit.
Thanks to its high bandwidth, among other things, banks see Ripple as the entry point to blockchain technology. Institutions that have chosen not to develop expensive and risky in-house projects in particular consider entering Ripple as an exposure to potential profits from blockchain technology and cryptocurrencies.
Technology of Ripple XRP
From a bird’s eye view, Ripple works according to the enterprise software business model, like the largest IT corporations. Ripple has 3 separate products that represent RippleNet.
XCurrent is a banking product that is outside the cryptocurrency world. It uses a temporary ledger, but it is not permanent and does not go to the blockchain. Banks use pre-funded liquidity pools and use Swift to make transactions. XCurrent is a service that streamlines this process.
XRapid is called On Demand Liquidity, i.e. financial liquidity on demand. It addresses the possibility of functioning without the need to have previously credited accounts or other financial security in order to obtain liquidity. The regulations say that banks are obliged to hold a reserve according to the law specified in the Basel 3 regulation. Thanks to the XRapid service, banks can release capital that would have to be secured in order to maintain liquidity. XRP enables you to perform the same financial operations with faster transfers between currencies and markets, using less capital. This is the only product sold to customers that uses XRP directly.
XVia is a corporate API to which banking systems can connect their endpoints and make global transactions.
What about Ripple Token, XRP?
XRP is an open source ledger. The XRP token is a digital asset that operates on the XRP blockchain. Ledger XRP was launched in 2012 (before Ripple as an organization was formed). It was founded, among others by engineers who developed early versions of Bitcoin in order to build a more scalable cryptocurrency and enable the development of the Internet of Value.
Ripple’s development is stable, the effectiveness of selling the service to banks is over 200 clients. Every week, 2 contracts are signed at the enterprise level, and the turnover is hundreds of millions of dollars.
XRP capitalization is very high and Ripple confirms that there is a lot of XRP. At the same time, he ensures that it is in their interest that too many of them do not appear on the market. XRP ledger has Escrow functionality, using this functionality they have created 55 tranches of 1 billion XR. One tranche will be released every month until they are exhausted. 80% of XRP from released packages goes back to the next tranches, and these in turn will be opened for the next years (56, 57 tranches, etc.).
The supply is also controlled by selling XRP to institutions that want to have speculative exposure to XRP, OTC, (so far about 20-30 have applied). Another method of controlling distribution is programatic sales. The trading volume in the market is surveyed on a daily basis and XRP worth 10 basis points of that volume is released by Ripple into circulation (meaning 99.9% of trading is not from Ripple).
A report on the number of XRPs sold and released is published quarterly. Despite the openness of Ripple’s operations, investors still have problems with determining the exact supply of XRP, which makes it difficult to model inflation. This is especially true for early adopters and the XRPs they subscribed to earlier. Ripple ensures that these funds are also subject to time constraints that affect the ability to liquidate the funds.
Ripple is the largest investor in other cryptocurrency projects, with an investment of around $500 million.
Who is Ripple competition?
International payments and settlement systems for banks and financial institutions is a rich market that will sooner or later be developed using blockchain technology. Ripple’s rival in the race for services for the greatest financiers are: internal cryptocurrency projects of the largest banks, centralized state cryptocurrencies and Stellar (XLM).
Stellar Lumens vs Ripple
The Stellar project was on the rival’s heels, temporarily even occupying 6th place on the list of the largest cryptocurrencies (currently outside the top ten). Stellar proposes a solution of a different type and its great advantage is its corporate links with the US IT giant, IBM. On the other hand, XLM is currently only a small part of Ripple’s capitalization. The Stellar project is supported by people who have broken away from the XRP project.
The lack of complete decentralization has not prevented cryptocurrency exchanges from supporting Ripple. XRP was added to the most popular cryptocurrency exchanges. Support for Ripple also has a Ledger Nano S hardware wallet, so you don’t have to keep funds on the stock exchange and you can get a high level of security that is available for the most popular cryptocurrencies.
What awaits Ripple in the future? Big increases or slow loss of value due to falling interest? Only the owners of the glass ball know the answer to these questions. Try to set general indicative points that will help create a meaningful vision and investment plan.
What’s with banking manipulation?
Ripple is targeting the financial industry with an emphasis on services provided to large institutions. Therefore, the links with the largest companies are not surprising, including those that sometimes appear in the headlines of financial newspapers in scandals and rumors. Is the foundation on track to take advantage of this? It is already known that the effect of the novelty has passed, along with the great increases in the price of Ripple. Now it’s time for cool calculations and assessment of the potential demand of banks, brokers and financial companies.
Is Ripple still attractive to investors?
One of the models of cryptocurrency speculators is to compare Ripple price to other, less popular cryptocurrencies. If we look at the Binance exchange token, the rate of return of which has already reached several hundred percent, to the Ripple price, which is still stalling, it will be obvious that speculators’ hot heads will focus on BNB. Especially since even DeFi tokens such as Aave or UNI can boast high rates of return, not to mention currencies such as interest-paying Tezos or Algorand.
Is it worth investing in Ripple?
There is one thing to be aware of about Ripple. Being the third largest cryptocurrency is a double-edged sword. On the one hand, being on the podium in the Coinmarketcap ranking means, by definition, great popularity, recognition and presence on most of the largest exchanges. On the other hand, a large number of tokens is a potentially large supply should the developers decide to sell some XRP, which is likely to lead to price drops.
However, there is one reason why you should really consider investing in Ripple. This is a pattern that made it possible to earn a lot in previous years. It is a tide phenomenon that lifts all boats. At one point, a lot of capital was reaching the cryptocurrency market, so speculators were looking for tokens that were just waiting for a sharp increase in value. And to the amazement of most investors, these increases rotated between Bitcoin and its derivatives and the rest of the cryptocurrencies, the so-called altcoins.
It may therefore make sense to buy Ripple at this point as we have experienced big gains in altcoins and a rebound in Bitcoin. Ripple is still waiting for heavy traffic. If the project continues to grow and the price of XRP is to increase in proportion to other projects, it is possible to return to the price of a few dollars for 1 XRP.