5 Strange Facts About Ripple (XRP)
With many people rushing into cryptocurrencies to cash in on the boom, there is a lot of misinformation that many fail to see. It is essential to get the facts right before you invest in any coin, Ripple (XRP) included. Forget about what other investors have made; focus on what you can make out of the current boom.
Why is Ripple the Coin in Focus?
Ripple (XRP) is commanding the attention of regular investors because it has the second highest market capitalization. Its value is higher than Slack, Uber, and Airbnb combined. With a market cap of $128 billion, anyone can see the potential. XRP did well in 2017 with an increase in value of over 36,000% since the beginning of the year.
As the ardent followers of cryptocurrency trends and investors know Ripple has been able to find substantial funding from several leading Silicon Valley firms. Through such partnerships, it raised over $93.6 million between 2012 and 2016.
These firms have a keen eye for startups that have a future. The investors put their money where they can get the best value. Such investors include Google Venture (GV) and Andreessen Horowitz. They have trust in Ripple’s vision, mission and trust the team behind the project.
If you have been online lately, Ripple is everywhere. It has brought several banks onboard along with a significant boost from the Japanese government. The Ripple ecosystem has proven its worth with over 100 mainstream banking institutions onboard.
- The Difference Between Ripple and XRP
There is a massive difference between XRP the coin and Ripple the company. The beauty of it is that XRP is smaller than Ripple. The company has tried to distinguish the community and other functions unlike BTC and ETH were the coin, and the company is one and the same thing. XRP is genuinely an independent product of Ripple.
Ripple came into being in 2012 as OpenCoin and changed its name to Ripple in 2015. The core business of Ripple the company is to sell blockchain based banking software. The company has employees and a physical office located in San Francisco, California.
Ripple has three other mainstream products xVia, xRapid, and xCurrent. xVia is yet to be launched, and once it hits the market, it will make it easy for banks and companies to send money without using XRP.
xVia is currently in development and is expected to come out early this year. It’s similar to xCurrent, which allows entities besides banks (such as corporations and payment providers) to send money through banks. xCurrent also does NOT use XRP. xRapid helps financial institutions manage liquidity; it frees up idle money without using XRP. Ripple’s flagship product is xCurrent which allows banks and other money processors to move money using RippleNet across borders seamlessly. This lowers the cost to banks of sending money and makes the workflow flawless.
Banks using Ripple’s software will not automatically start using XRP. That might take time but for the company, it one of the best route to market strategies. This could turn out to be Ripple’s next move to increase adoption.
- Is Ripple (XRP) Here to Stay?
Getting into the market early does not mean you automatically break even. Your competitors will look at your failures and capitalize on them. This is precisely what happened with Bitcoin and Ripple. When people talk about cryptocurrency, they think Bitcoin. Well, Bitcoin is able to send money globally but what next? It is not interested in banks?
Your guess is as good as mine, but as of now, Ripple is concentrating on the banking sector. The company’s goal is to add value to the industry and benefit the end user like you and me. Ripple is a company working in a profitable niche and with no intention to let go of it anytime soon.
As regular crypto-enthusiast are focusing on XRP, the Ripple company is trying to become the digital currency version of SWIFT. It might be second to Bitcoin in market cap and may not need to replace fiat to become a global currency.
- XRP is Complementary, not Disruptive
Ripple (XRP) as a company has many competitors, as there are other players in the sector. There are R3, and SWIFT and they crossover in targeting the lucrative money transfer sector of financial institutions. For Ripple to overturn the competition, it has to work extra hard, and this is bearing fruit thanks to the blockchain technology.
The head of Global Banking at SWIFT, Harry Newman realizes the threat Ripple poses and argues that blockchain technology can be incorporated into its existing money transfer and processing ecosystem. Ripple is not a disruption to current technologies but adds value to them instead. We might brace for a SWIFT coin in future, which is my guess!
- Ripples (XRP) is Actually Centralized
RippleNet owns 62% of all XRP coins globally. As an investor, this should worry you. However, Ripple plans to lock up to 55 billion coins in escrow. This has brought trust to investors given the centralized nature of the ecosystem. The company will release one billion coins every month for the next 55 months, and once they are sold at the current price, the stakeholders will benefit beyond doubt.
The bad thing about a centralized ecosystem is that it can be easily killed by regulation. This is one coin that can be attacked legally should things fail to work out for the investor and other stakeholders. It is just a matter of keeping your fingers crossed, and hopefully, it will not happen.
- XRP Adoption and Route to Market
Ripple seems focused on using its software to bring onboard more users in the banking sector. Integrating XRP through xRapid for seamless transactions is easy. However, SWIFT might be the game changer should it adopt blockchain as part of its current money processing systems.
Holders of XRP harbor the thought that holding on to the coin will bear fruit in the near-term. This is in total contrast with banking institutions looking to move money across borders because you cannot speculate on sending or receiving currency.
When banks use XRP, they do so to facilitate changing hands; it takes less than five seconds for a transaction to complete, and the bank cannot benefit from that. Instead, the speed of a transaction works to their benefit; they save on the transaction cost, and when this is passed on to the consumer, more adopters are brought onboard.
As a company, Ripple is one of the best in supporting the financial sector; however, the success of XRP as a coin will depend on the performance of the parent company. Bringing onboard more banks and financial institutions will make Ripple a company for the future with investors staying with it longer.
If banks and other money processors adopt xRapid to settle transactions using XRP and incorporate the xCurrent software to send money globally, Ripple will eat into SWIFT strongholds and be on the road to breaking even. However, there are also other startups like R3 that might give the company a run for its money.
Whichever way you look at Ripple (XRP), it has better solutions and is poised to transform the banking sector. These products and bank cost-cutting initiatives benefit Ripple, and the growth might trickle down to boost the value of XRP in the future.