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Ripple cryptocurrency is denoted as XRP and was built as a global payments network. It has grown massively and is currently ranked as the 4th largest amongst its cryptocurrency peers.
This is quite an achievement considering the thousands of cryptocurrencies in circulation to date. One of the key strengths of XRP is its underlying technologies.
As a payment solution provider, Ripple has projected itself as a direct competitor to the global financial payment institutions in the money transfer and remittance business.
The global payment systems have always been slow, bureaucratic, and expensive especially cross-border. Ripple saw this opportunity and came in with a promise to do it in a cheaper and faster manner.
To date, Ripple hasn’t been able to dislodge the traditional players however, in comparison with its peers, Ripple is leading in the game.
Like all the other cryptocurrencies, it has a based decentralized concept giving a sense of anonymity and reduced control. By utilizing these characteristics, ripple still believes that as the acceptability of cryptos grows, it will emerge as the money transfer channel of choice. It will be offering Payment settlements, asset exchanges, and remittance solutions.
Price and supply
Since its release in 2012, XRP has seen mixed results in its pricing and value. They have closely followed the crypto currency market trend in price gains.
One thing to note on the Ripple supply curve is the fixed element. In its release, ripple introduced a fixed supply of around 100 billion XRP that it regularly releases into the market.
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Due to this closed nature of its supply, it is not possible to mine the currency like other cryptocurrencies. This concept makes XRP have some element of privatization.
This reduces the element of openness and decentralization. As expected, this means Ripple creators have direct power over the currency supply.
Such power if used wrongly could result in market manipulation. As long as the Ripple creators control the supply, then there is a possibility of market manipulation happening.
This is one of the biggest threats every ripple investor should consider and evaluate. On the price, XRP has recorded significant gains in the last year as indicated in the graph below.
Below is Ripples market valuation curve of the last one year.
Future of Ripple
As highlighted earlier, Ripple has positioned itself as a payment technology network. Payments in general is a growing channel.
This has been confirmed by the tremendous growth in the number of transactions and users doing settlements globally. It is an area that will keep growing into the future as the global commerce landscape expands and more people have become financially included.
For a long time, the global payments sector has been dominated by third parties who operate as intermediaries to facilitate payments. This has made the service both expensive and bureaucratic.
Ripple noted this and is trying to create a faster and cheaper payment ecosystem. This is as an incentive hoping to attract customers.
So far, Ripple has not achieved much success in rolling out an effective and competitive solution. There are still major challenges to overcome including regulatory and technological.
Government has a key interest in money matters and will never allow any transfer channels without doing thorough scrutiny and approvals.
This is one tool that Ripple doesn’t have compared to the traditional payment networks that have been tested and regulated over time.
Blockchain technological assets are still developing so there is still a long journey to overcome in order to make transactions faster and cheaper as envisioned by Ripple.
It will take years if not decades to build a reliable and stable infrastructure that is safe and accessible across the globe. A case scenario is the partnership between Ripple and western union that hasn’t materialized due to the fact that it is still 5 times cheaper to use the traditional western union network as opposed to the ripple tokens.
These factors highlight the opportunities and risks associated with Ripple. I believe that it is founded on a solid technological concept that is valid and relevant.
However, it is still early to call the direction the currency will take. Based on the market so far, there is huge optimism in the crypto market and that is why the price of ripple has kept rising.
As an investor, I would advise a more conservative approach focusing on the short-term market movements. The market is highly volatile recording price movements up to 20% on a single day.
This offers quick profit-taking opportunities that could be well rewarding but also could result in huge losses if gotten incorrectly.
For long-term investors, there is still growth potential in the value of XRP, however, it is advisable to keep up to date with any relevant changes in the technological and financial landscape.
This will assist with making informed decisions on the viability of XRP at any given time.