Since the middle of this year, cryptocurrencies are experiencing a rapid growth. From growth of the total number of cryptocurrencies to growth of price, cryptocurrencies are reaching new heights.
It is the digital gold rush of the 21st century. Although highly popular cryptocurrencies like Bitcoin and Ethereum experienced the most growth, altcoins like Ripple, IOTA, Litecoin were not left far behind.
Cryptocurrencies are digital assets or virtual currencies usually based upon the blockchain technology. The idea of blockchain was first proposed by the pseudonymous Satoshi Nakamoto in 2009.
This mysterious individual or group of individuals wanted to make Nick Szabo’s Bit Gold a reality.
And thus, Bitcoin came into being. It is an open source peer to peer decentralized digital currency where funds are cryptographically controlled. There is no centralized authority in the Bitcoin protocol thus effectively making you your own banker.
Soon after the success of Bitcoin, many popular altcoins like Ethereum, Litecoin, and Ripple followed its path. All of these cryptocurrencies have different goals and different ideologies but one thing is common in them – they all have a purpose.
- 1 WHAT IS RIPPLE?
- 2 RIPPLE CROSSED $1 MARK FOR THE FIRST TIME
- 3 FUTURE OF RIPPLE AND FINAL THOUGHTS
WHAT IS RIPPLE?
Unlike many other cryptocurrencies, Ripple is not just a cryptocurrency. It is a real-time gross settlement and remittance network that operates on Ripple’s blockchain.
The protocol also has a native cryptocurrency called XRP. The main goal of Ripple is to create a user-friendly international payment system that will replace SWIFT.
That is why their tagline is “One Frictionless Experience To Send Money Globally”. Also unlike Bitcoin which doesn’t have any owner, Ripple is owned and controlled by Ripple Inc.
ISSUES WITH OUR CURRENT PAYMENT SYSTEMS
While we are living in the age of blockchain and decentralization our payment systems are very old school. The main issues with our current payment systems are –
Currently, it takes about 3 to 5 working days to settle an international wire transfer. This is because an international fund transfer goes through several intermediate banks before reaching the final bank.
This method of international fund transfer is not only slow but also very unreliable. Because this type of fund transfer doesn’t provide you with enough tracking information. Also, the transfers are more likely to fail.
Using intermediaries will force the transferred amount to be exchanged to the native currency of the country of operation of the bank.
So if there are multiple intermediate banks and financial institutions involved then the transferred amount will be exchanged multiple times. This makes the whole international fund transfer very expensive.
NOT UP TO STANDARD
Our current payment systems are not really global and not up to the standard. That is why we are facing so many problems.
WHAT MAKES RIPPLE BETTER
And this can only be solved by introducing a global payment solution that is not bound by a single country. Currently, it looks like Ripple is the most promising solution.
WIDE VARIETY OF SERVICES
Ripple provides a variety of service – from on-demand liquidity sourcing to processing payments in real-time. Ripple has divided their services into three main categories.
- xCurrent – Which is meant for banks to settle instant global payments for their customers. A handful of banks are already using this service.
- xRapid – Which enables payment providers to source on demand liquidity.
- xVia – Which allows businesses and corporates to plug into the RippleNet and send/receive payments.
The Ripple project was launched keeping one thing in mind – we need a global payment solution. So compared to other global payment systems Ripple thousand times faster (if not more).
While a simple wire transfer can take up to 5 days to settle, Ripple settles cross-border payments within 4 seconds on an average. This is mainly because Ripple uses their own consensus-based transaction verification method.
Using RippleNet also dramatically reduces the costs, both for the banks and payment providers and for the customers. Ripple transactions just take a few cents to go through.
Plus using XRP as a buffer currency Ripple negotiates the best exchange price for a currency pair.
Ripple was launched back in 2012, just a year after Bitcoin. During this 5 year period Ripple never faced a single major issue and closed 35 million ledger entries.
Unlike many other cryptocurrency protocols, Ripple is not run by a decentralized group of developers. Instead, it has Ripple Inc. behind it which has employed world-class blockchain engineers.
Apart from these Ripple is also eco-friendly as it is consensus-based and doesn’t use PoW. By now we all know how energy-hungry PoW based cryptocurrencies are.
RIPPLE CROSSED $1 MARK FOR THE FIRST TIME
In our Ripple 2018 analysis article, I talked about how it was possible for Ripple to reach $1 mark within the first quarter of 2018. But it seems I was a bit off with my calculations.
Ripple has already crossed the $1 mark on 21st December. For the first time since its inception, XRP reached $1.
Although since then the market has gone up and down several times, XRP still continues to float around $1.
While all of the cryptocurrencies are eating dust at the moment, XRP continues to grow. For example, Bitcoin which was as high as $17000 is now only trading for $13000 on an average.
In an article I penned a couple of days back I talked about the probable reasons behind Ripple’s current price surge. In my opinion, there is not one but several reasons that contributed to this price surge.
Some of the promising reasons include worldwide trials, Ripple’s acceptance by several banks and payment providers, Michael Arrington’s all XRP hedge fund, speculation regarding Coinbase etc.
Currently, Ripple has a market capitalization of $38 billion placing it in the 4th place. It is just $2 billion shy to replace Bitcoin Cash and achieving the third spot in terms of market cap.
FUTURE OF RIPPLE AND FINAL THOUGHTS
I try to be extremely neutral in my articles and closely analyze each and every cryptocurrency. But from the very beginning, I was very optimistic about Ripple because of its underlying technology and its purpose.
In my opinion, the only cryptocurrencies that will survive in the long term are the ones which have real purposes.
And as Ripple has an extremely important goal that can potentially revolutionize our life, I believe Ripple will continue to grow. 2018 may very well be the year of Ripple and XRP.
I expect Ripple to reach at least $2 by the end of the 1st quarter. Now only time will tell whether my predictions are correct.