Is Ripple worth investing in? In order to answer this question, firstly, let’s try to find what it is and how it is different from other cryptocurrencies.
What is Ripple (XRP)?
It was founded in 2012 in San-Francisco, it is both a payment platform (an open source protocol which is designed to allow fast and cheap transactions) and a currency (XRP).
The platform uses blockchain technology for faster cross border transactions and its payment protocol processes the cross border transaction in just three seconds. The platform is designed to allow users to transfer money from any currency to any other currency in a matter of seconds, anywhere in the world. This is an ambitious goal meant to eliminate the need for older systems like Western Union or SWIFT.
To prevent any confusions in the Ripple terminology, take a look at the following explanations:
- XRP. XRP is the name of the digital currency that facilitates transactions on the Ripple network. It effectively acts as a bridge between the two currencies being transferred and also serves as a source of liquidity when necessary. XRP is the native asset of the XRP Ledger, an open-source blockchain that runs on a network of peer-to-peer servers.
- Ripple. This is the American technology company that develops the Ripple payment protocol and network.
- RippleNet. This is Ripple’s network of payment providers around the world. It connects the different payment networks of banks, payment providers, digital asset exchanges and corporate entities, and can accept both fiat and cryptocurrencies.
Unlike Bitcoin or Ethereum, it doesn’t have a traditional blockchain, instead, it uses its own patented technology: Ripple Protocol Consensus Algorithm (RPCA). The word ‘consensus’ in the name means that if every node is in agreement with all the rest, there is no issue.
Most of the people think that XRP works like all cryptocurrencies. They also think it is a coin that increases in value with the passage of time. But, the reality is not so. First, Ripple is not a coin but it is a payment platform that helps in fast processing of cross border payments. The platform takes the place of banks in this kind of transfer. It works exactly like banks in transferring money from one place to another. It chooses its nodes carefully for processing transactions.
And it does not allow any third party to interfere in these transactions. This means that it controls the transactions through its own blockchain network. It decreases the completion time of transactions. This increases the security, reliability, and scalability of the transactions. It allows the transfer of coins from one account to the other through unique and verified nodes. The processing of transactions takes place through two ways of verification.
All the transactions are saved in an online ledger which is continuously updated by Ripple. All the information about the transactions is saved by the company and no information is leaked. Unlike all other cryptocurrencies, the platform knows all about accounts, their balances, various transactions, and much more.
Ripple has been quietly working away with a focus on expanding its network of partners and increasing the usage and adoption of its native token, XRP. The latest initiative is a RippleNet accelerator program that offers financial incentives to institutions that help promote the innovated payments system.
Ripple Adoption and Use Cases
According to the company blog, the program consists of a ‘Volume Rebate and an Adoption Marketing Incentive’:
- The Volume Rebate
It is an incentive that offers XRP rebates to RippleNet members which have reached certain milestones in terms of processed transaction volume. The announcement goes on to add that the reimbursements can cover anywhere between 50 to 300 percent of the integration fees and first year’s license fees. It can be taken in XRP or USD but resale of tokens will be restricted to ‘support healthy XRP markets’.
- Adoption Marketing Incentive
The second part of the initiative is an adoption market incentive which rewards members that promote their services to other companies. RippleNet members will be given marketing tools and materials to help expand the ecosystem.
The following use cases will show how various aspects of the financial sector can be improved in the years to come:
- Banking Revenue Streams
Many banks around the world are struggling to identify and explore new revenue models. While Ripple wants to ensure that banks can discover new markets, primarily with real-time global payments. This allows financial service providers to meet customer expectations around the world fairly quickly.
However, real-time payments are not an easy market to impact. Through its RippleNet venture, it is slowly onboarding additional banks around the globe, with a strong focus on Asia.
- Payment Provider Reach
Payment providers and processors can only thrive when enough people use their services. It aims to offer a way for payment providers to attract more users. Processors can decide to use either fiat currencies or XRP, either through the xCurrent or xRapid products offered by the company.
- Exchange Volume
Ripple wants to help companies attract global payments. That applies to banks, payment providers, cryptocurrency exchanges, brokers, and so forth. XRP has the potential to become a major digital asset in the global payments industry, although it is still too early to draw any real conclusions in this regard.
- Simplifying Payments
The platform is exploring various ways to simplify payments, both online and offline. Some of these use cases are payment tracking, capital efficiency, and rich data transfers. Combined with lowering overall operational costs, this solution could make an impact on a global scale a lot sooner than people anticipate.
Ripple’s xVia solution is a tool meant to simplify payments across RippleNet without the need to install additional software. The xVia solution offers instant settlement and confirmation of transfers, as well as competitive FX rates.
5 Benefits of Ripple Coin
- Transaction Speed
XRP beats all other cryptocurrencies in processing cross border transactions.
The coin is not created by the users through the mining process. Instead, the company itself has created 100 Billion XRP coins.
XRP works on a decentralized blockchain network. This means that the investors can buy or sell XRP through the secure system of the company. On the other hand, other cryptocurrencies are bought or sold through central exchanges that can crash anytime and render the users a great loss.
- Transaction Fee
It works as a payment protocol and takes a little transaction fee.
Ripple offers more security as the company can track any sort of information in its network (the platform can even track the account balance of the users).
How High Can XRP Go?
What is the highest price XRP could potentially get to in the long term? $110, $300 or even higher? Some experts believe that the limiting factor for price mooning is escrow from Ripple, as they simply sell XRP every month. Once escrow is gone and all XRP is sold, the price can jump $100+. But it might take another 5-7 years to get that level.
Nigel Green, CEO of deVere Group, recently expressed his forecast about how high Ripple could get. He reckons that XRP could surge to $2 in 2019. Sounds like it is good time for investing in ripple.
Many Ripple experts agree that its price can increase to $200–300 in 10 years. If this platform becomes a default payment asset for banks, it can reach the price of $20 very soon. Besides, since the company continues heating up investors’ interest, XRP can become less volatile.
When estimating how high the crypto will go, we shouldn’t forget about real facts:
Total Supply= 100,000,000,000 XRP
For XRP to be worth a $100 in future it should earn about 100,000,000,000 x $ 100 = $10,000,000,000,000 capital.
That’s $10 Trillion (Bitcoin’s current market cap is $213 billion).
At the moment, no company has reached the market cap of even $1 trillion with Amazon, Google and Apple being race leaders. Compared to that, Ripple’s $17 billion market cap is nothing. To reach XRP $100 price, the company should do something impossible.
Most likely, 100 USD threshold won’t be hit within the following five years — its total supply is too high.
Therefore, Ripple’s projected growth isn’t likely to be stopped, but it’s not so tremendous for the currency to get even to $50.
On the other hand, the crypto experts are of the view that XRP would beat Bitcoin and all other cryptocurrencies if its value touches $7-$10 in this year. This is because on reaching $7 value, the market cap of this cryptocurrency will cross Bitcoin which is the largest cryptocurrency in respect of market cap.
Is Ripple Worth Investing?
After getting an idea about the XRP price growth, is it still a good investment? We can hope that XRP will surely touch $7 mark in 2019 as more and more companies are planning to join Ripple’s blockchain network. Moreover, its blockchain technology is worth using because it helps to complete cross border transactions within seconds. The currency is 10 times stronger than Bitcoin and other prominent cryptocurrencies of the world. Thus, the investors are thinking of investing in XRP because the value of cryptocurrency may touch an all-time high record.
The crypto experts believe that XRP is the cryptocurrency that will show a lot of bullish signs in 2019. This is because of the joining of many large banks, financial institutions, and credit card companies. Ripple’s ecosystem is expanding rapidly and more and more companies are joining it. Especially, the joining of American Express and Santandar has benefitted it a lot.
XRP could be an especially good choice for investors looking for a smart investment under $1. Buy XRP now and in a few years, you will see how much profit you get.
Betting against the banks never seems like a good idea, but heavy competition is to be expected. Why would banks use the cryptocurrency of an external company when they are able to create their own blockchain internally? Visa simply can’t be ignored when talking about financial transactions between banks and it’s unlikely that they will not come up with a counter strategy.
Nonetheless, the Ripple network is impressive and expanding. The highly skilled leadership gives confidence to a sound vision and strategy. Price manipulation may occur and there are plenty of committed naysayers to Ripple, but who needs individual investors when you have the support of big players in the financial system.
How Much Ripple Should I Buy?
Once you decided that XRP is a good buy, you may come up with a different question: how much should you purchase? It is relative to who you are as an Investor, your tolerance for risk, and how much capital you have to invest in XRP. The general principle is to buy into an investment as early as possible for the lower price entry point, and the higher potential Return on Investment should the cryptocurrency explode with success. If you have a low tolerance for risk, it’s obviously more beneficial to buy-in at the lower price points.
Some questions to ask yourself:
- Do you believe in the long term merits of the project?
- Do you believe in the business case and the business problems that Ripple is solving for the traditional banking industry?
- How do you feel about the strength of XRP in relation to other competitors in the same problem domain? (e.g.Stellar XLM)
- Do you have confidence in the management team to execute on their roadmap?
- Do you want to invest in XRP for quick gains or for the long term value?
There is no such thing as a 100% safe investment, and each decision has its risks. In any case, it is up to you to decide if you need to buy ripple.