Among the many cryptocurrencies that occupy the limelight, Ripple is one of those that differ with its peculiarities. Ripple XRP is used in the network of payment for all transactions, reducing the time and money associated with cross-border payments. Every transaction through the system is processed in just a few seconds. To make a comparison, Ethereum takes longer than two minutes, Bitcoin about an hour, while the traditional systems can take from three to five days. Considered to be the preferred cryptocurrency of banks, after a sharp fall in January 2018 it seems to be going back on track as the cryptocurrency of the future. But why is it difficult for Ripple to reach the same price level as Bitcoin?
The Currency Ripple (XRP) was born and operates only within the network, and the same system, Ripple. The virtual currency is divisible into six decimal places and the smallest unit is called a drop (1 million drops make up a ripple). Ripple (XRP) has an availability of 99 billion coins, which means that it will never be able to reach the value of Bitcoin, that will have a total of only 21 million coins. For example, if one takes into account the 99 billion coins ripple available, and assumes a price of 100 dollars for a single ripple, this means that the entire market would reach almost 10 trillion dollars. Considering that 20% will remain in the hands of the creators, Ripple would be equivalent to the whole dotcom bubble at the beginning of 2000 ($6.8 trillion).
Somewhat utopian. On the other hand, it is not designed to reach those digits. Perhaps Ripple will never reach these levels, but from the point of view of technology, this represents a solution more avant-garde compared to Bitcoin. You can use Ripple for exchange between US dollars and pounds sterling without having to necessarily pass through a centralised bank. In the same way, via Ripple, it is possible to exchange between different digital currencies. The protocol of Ripple implies having a ledger of decentralised operations exactly as Bitcoin, but this is certified by telephone operators of the network and also by academic institutions such as MIT.
The main difference is that while Bitcoin was born as an anonymous tool whose primary purpose was to escape any monetary authorities, Ripple, although enjoying the blockchain, is a means certificate which is detached from the other. Remarkable is the great interest shown by the bank RAK of the United Arab Emirates about the use of the Ripple system for instant payments via blockchain in India. RAK has set itself the goal of launching services to transfer funds instantly, safely and smoothly to customers of Indiana Axis Bank, already a partner of Ripple, beyond that already used for cross-border services. Several other financial institutions have experimented with distributed accounts, including JPMorgan, UBS, Credit Suisse, Barclays and HSBC.
Will the cryptocurrency’s long-term be able to provide some utility in the real world? Where today there are a wide range of currencies, institutions and persons that have to exchange money using an antiquated system, Ripple provides a universal method that simplifies everything. And the fact that hundreds of financial institutions (including Crédit Agricole and Santander) have begun to use this technology is the main reason for which the value of XRP is squirted to the stars at the end of the past year. One thing is very likely: the success of XRP seems to be inextricably linked to the adoption of Ripple by institutions; it’s increasingly important in its ability as an intermediary in transfers.
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