To start this post: Should You Invest In Ripple, it is important to know that nothing in this post can or should be considered financial advice or consulting. Simply one person’s opinion on Ripple and the future of digital assets. With that being said, let’s dive into it.
First off, we should mention that there is a distinction between the company Ripple and the token, XRP. Although Ripple is actually the company that supports and advocates for the token XRP, most people just call the token: Ripple. Moving forward, we are going to discuss both interchangeably as in my eyes, they are the same thing.
What is Ripple
Ripple is one of the top market cap crypto asset projects that was started in 2013 by three individuals: Arthur Britto, Jed McCaleb and Chris Larsen. The asset is a transaction focused crypto currency with the potential to disrupt the financial industry. Ripple aims to replace SWIFT which is the current adopted international means of money transfer for most banks around the world.
The original trio that started Ripple have their own past and stories we will not be discussing here. If you want to leave more, check out this post.
Why is Ripple a Top Crypto Asset
Ripple has ripped through the market in record speed. Historically, the asset has held the number 3 spot out of all cryptocurrencys in the market. For a short while in 2018 and 2019, XRP actually over took Ethereum for the number 2 asset in the industry in terms of market cap.
Every digital asset dreams of being in the top ten. Ripple has almost never been out of the top 5 and wil lnot be for the foreseeable future.
The idea of disrupting the international banking market with fee-less international transfers is quite appealing. The company boats 3 main products:
- xRapid – Payment providers use xRapid to source on-demand liquidity
- xCurrent – Banks use xCurrent to process global payments for customers
- XVia – Businesses use xVia to plug into RippleNet to send payments
Each of these products aim to utilize XRP the digital asset in one way or another. The speculation of an international banking market utilizing one cryptocurrency for all international transfers and payments could send any coin to the moon.
Another reason Ripple has surmounted its competition is the vast list of partnerships. Ripple easily has over 200 international banks partnered with their products already. For a current list of all partnerships, dates and other information click here. Ripple currently has over 185 institutions and banks using or testing xCurrent, 20 entities using or testing xRapid and around 10 entities using or testing xVia.
This is momentous for the crypto industry as a whole.
Who is Ripple’s Competition
The main competition for Ripple is Stellar. Stellar is another asset and project focused on disrupting international transfers. Ironically, Stellar began by one of Ripples founding members, Jed McCaleb. There is a story there that no one has time for.
In short what Stellar tried to do was give away all of its tokens during their token sale. This was a scheme to maximize exposure and increase liquidity short-term. The funny thing is there was not a lot of thought and consideration put into this airdrop and many things went amiss. This is not a article on Stellar, so this story will have to continue another time. This of Stellar as the step-child of Ripple.
The only competitor recently announced in 2019, is JPM coin. JP Morgan actually has decided to not only enter the crypto industry, but do so by creating their own token. This token aims to do the same thing that Ripple is trying to do. The difference is that JPM coin is exclusively for JP Morgan customers and clientele. Essentially, JP Morgan created an internally used and accepted digital asset that will be used to settle debts, balance accounts, move money, and credit swap internationally all within their own book of business.
No one knows how this will turn out for JPM, but it is very interesting to see the use-cases for crypto grow and companies start to enter the industry.
What are some Problems with Ripple
Clearly, there are some problems with every digital asset, but what are Ripple’s?
The main problem that has yet to be solved is that the main company behind the adoration of XRP, still holds a majority of the total supply of the token. This is looked down upon in the crypto industry as more assets are supposed to promote a decentralized and fair consensus protocol. With Ripple holding most of the coins, there has been speculation that they could dump a large portion of assets on the the market at any time.
Jed McCaleb tried to do just that when he left the company Ripple for Stellar. In light of this, a judge actually ruled in favor of the company, Ripple, and restricted Jed’s ability to dump his percentage of the total supply on the market.
Other than the problem of most of the funds being with the parent company themselves, there is another problem of consensus. Ideally, projects come to consensus through proof of work or proof of stake protocols. In contrast, the very banks and institutions that utilize the products of Ripple actually verify the network. This means that in order to use the products for fee-less transfers, the entities actually have to become a node on the network.
In other words, the banks and institutions that the crypto community wants to remove from the financial system, are back in control.
So, what is our conclusion on Ripple?
Ripple is a Good Investment
In conclusion, we can speculate that Ripple is a good investment. Here is why:
Ripple is basically a hedge against the decentralized crypto scene. It is not a traditional currency and it is not a platform based crypto asset, it is different. It is an institution and bank focused digital asset. If you believe in diversifying your portfolio and you have invested in Bitcoin and Ethereum already, then Ripple would be your next investment vehicle.
Additionally, here are a few more drivers for your investment conscious:
- Ripple has too many partnerships to ignore
- Binance and other notable exchanges have begun to offer XRP has a base trading pair which is huge for liquidity
- Coinbase now offers XRP to fiat pairs
- Ripple has an amazing ROI since inception
- Ripple has held in the top 5, year or year, which is notable at a minimum
As always do you own research and learn about Bitcoin, Ethereum, ripple and some of the other top assets before investing. Make an educated decisions for yourself which digital asset suits you, if any. At the end of the day, if you can’t explain what Ripple is to your mom then you probably should not invest. Knowledge is power.