Coin Spotlight - RIPPLE

Without a doubt, Ripple has been one of the most talked about coins of late 2017 up to now. With an eye-watering increase in value from less than a cent at the start of 2017 to $3.83 as at today, it is another of the many coins one wishes they had of known about earlier. Biting at the heels of Bitcoin in terms of total market cap, the crypto world is wondering when this rise in value will stop or indeed, is the coin still undervalued? So before we get too excited about its price, lets talk a little about Ripple (XRP)

Ripple Background

Ripple can trace it’s roots all the way back to 2004 to a decentralized payment protocol called Ripplepay in which transactions were verified by consensus and were much faster than bitcoin and more energy efficient. Over the years, and with changes in management the company eventually became Ripple Labs with the protocol evolving to being able to provide instant and direct transfer of money (in any currency format) between two parties. This is maintained on a centralized ‘Common Ledger’ and the virtual currency (XRP) is used to allow financial institutions to transfer money.

Since 2013, the protocol has been adopted by an increasing number of financial intuitions, giving it some real-world utility/credibility and is perhaps the single biggest reason to explain the sudden price rise. As Ripple targets these mainstream institutions, it has created an interbank group for global payments based on distributed technology known as Global Payments Steering Group with members such as Merrill Lynch, Mitsubishi, Royal Bank of Canada and Westpac Banking Corp. Currently, Ripple has 150 banks incorporating it’s Global Settlement Network. According to Stefan Thomas, Chief Operating Officer at Ripple, “Ripple is an enterprise solution cryptocurrency and it was designed for banks from day one” (Ripple and XRP are More Stable Than You Think)

Use Case

As briefly discussed above, the real-world application for Ripple is to speed up currency transactions between financial intuitions and reduce fees. This means that when you make a funds transfer from your bank account to another account, it will no longer take 1 to 3 business days, but will be instant. For instance, in 2016, NAB and Westpac joined the Global Payment network looking to implement the SWIFT settlement engine. The fruits of this implementation can now evident with instant payments on offer at NAB.

Advantages

• Currency conversion between any currency i.e. BTC to USD, LTC to AUD
• Payment Speed – Payments are settled in seconds compared to other Crypto Currencies which can take minutes and compared to banks which can take up to 3 to 5 days
• Scalability – Can scale up to 50,000 transactions per second:
• Adoption – Maybe the biggest advantage is the fact that it has been adopted by so many institutions and therefore the support and future of the technology is sound

Disadvantages

• Supply of currency – 100bn XRP with 60% still owned by Ripple. 20% of XRP kept by founders. If released to market, will dilute value of currency
• Founder Jed McCaleb left Ripple to create own version of Ripple called Stellar
• Centralized technology – going against the decentralized ethos of the crypto community. All of the control is maintained by Ripple meaning it is no different to any other large financial institutional
• The fact that Ripple works closely with banks may promote bias towards its technology whilst hindering adoption for other crypto technologies

Summary

Recently the price of all Cryptos including Ripple has dropped in price. Certainly the bull rush that we saw with Ripple was a speculative bubble and whether we will see this prices again remains to be seen. One thing for sure, Ripple is now one of the top Cryptos and most people have now heard of it!

You can buy it through most exchanges and rumour has it that it will be added to coinspot shortly.