In its essence, Ripple is a real-time gross settlement system that has attracted the attention of thousands of people all across the globe. It is one of those cryptocurrencies that enter the market with something new to offer and pose a real challenge to established competitors. If you look at a list of cryptocurrencies by market cap you will surely notice that its native coin XRP is the third largest crypto coin in the industry.
The Ripple payment protocol was released in 2012 and it is based on a publicly shared ledger or database. The validation process is based on a consensus which makes the network independent of the mother company. It relies solely on the validators, among which are corporations and even the Massachusetts Institute of Technology.
Did You Know?
The Ripple protocol has been widely adopted by big companies and banks as a settlement infrastructure. It allows for instantaneous, virtually free global transactions which are strictly secured and encrypted, and are not subject to chargebacks. For a long time, its focus has been on the banking field as an innovative and reliable transaction infrastructure.
The native currency of Ripple, the XRP, is not supposed to be mined. 100 billion units of XRP had been created upon the inception of the protocol. Its rules forbid the further creation of new units. On the Ripple network, people are not required to hold XRP units as a way to store value or use it as a medium of exchange.
This, however, is exactly what most people do. They hold ripples. One of the fundamental properties of the currencies has been put into its conception. The XRP has been created with the intention to serve as a bridge currency.
What Is a Bridge Currency?
There are thousands of assets people can trade online under different financial instruments. One of the most popular instruments are the currency pairs where one currency is exchanged for another under a floating or fixed exchange rate. But some currency pairs are rarer than others and are not up for trading on many platforms. XRP has been adjusted so that it can be used as a bridging currency in order to enable the so-called market makers to achieve their trading goals. As such, investors can use a currency to buy ripples and then use those units to buy another currency, thus bridging a pair that otherwise is not available for direct trading. This is also a method to cut down on the currency pairs an investment platform needs to maintain and provide for trading.
Another great feature of the Ripple network is the fact that it does not separate fiat from cryptocurrencies. This is a statement for the goal of the network – to improve transaction speed and make them easier to accomplish. This and a couple more reasons have turned XRP into a desired asset. Given that its price is wildly more accessible than that of Bitcoin, it is only natural that so many people are looking to invest in it.
Ripple Price Prediction – Reasons Behind the Movements
Ever since it was released, the XRP coin had a very low price, one of the most accessible cryptocurrencies in the industry. But the reason for that is not because few people what to invest in it. It is more because of the fact that it has not been conceived as standalone currency but rather as a bridge or moderator for transactions, or as a payment for transaction fees.
Of course, there have been spikes and drops observed. For example, at the beginning of 2018, when the Bitcoin almost broke the $20k per token barrier, XRP marked a record of over $3 per unit. It is just as volatile and yielding to market conditions as any other cryptocurrency. And, of course, you can buy and sell it on a cryptocurrency exchange platform.
Price Per Unit vs Market Cap
The market cap of a cryptocurrency is determined by the number of circulating coins multiplied by the price per unit. Given that the XRP has a supply of maximum 100 billion coins of which nearly 40 billion are in circulation, it is bound to become the industry leader when the full extent of the supply goes into circulation. Of course, that would take some time but people have already turned their sights on the currency as one of the strongest competitors of Bitcoin.
What is good to keep in mind is given the nature of the Ripple and its protocol, the native cryptocurrency is influenced by factors that are mainly different than the ones that influence the price of Bitcoin and Ethereum for example. Many investors use it as a hedging solution because of that difference.
Ripple Price In USD, Benefits, & Driving Factors
At the time this article was written, the price for a single unit of XRP is nearly $0.65 making it one of the cheapest cryptocurrencies in the leading positions by market cap. It is there to stay because of the numerous applications and innovations it introduced.
The platform of Ripple Labs has been widely adopted across the corporate and banking sectors. Each new application, each new adoption of the technology of distributed ledger consensus adds more to the value of the XRP.
In addition to that, Ripple Labs is still considered one of the most innovative start-ups and many expect of it further innovations and even more ingenuity. This has convinced traders that it is worth it to invest and hold ripples. Major changes in the company will also impact the Ripple price whether it is in USD or INR, or some other denomination, it doesn’t matter.
The Story of Success
The main reason why Ripple became so popular is because it was widely incorporated into the banking sector. It has been considered as significantly more practical, not just accessible, asset than the Bitcoin for example, because of that wide industry penetration. Global cryptocurrency community expects its value to stabilize and increase as more organizations adopt the platform for their operational processes. As Bitcoin is viewed mainly as an investment tool for profit, the Ripple token is in constant use and turnover, and the future applications of the currency are yet to expand.
Ripple Coin – Could Functionally Equal Profitability
With the dawn of the cryptocurrencies, online trading and investments have changed drastically. Hundreds of crypto assets have been introduced, virtually same as the next one. That is why their lifespan is often debated.
But when cryptocurrencies and platforms like XRP and Ripple emerge on the scene, people can sense that will bring a significant change. Given the market penetration and application on part of banking institutions and international corporations, the Ripple is here to stay. It will in no way be at risk of fading away like most of the small cryptocurrencies.
Its constant use gives the XRP liquidity, it will not gather dust in your portfolio. This type of liquidity is not something characteristic to most cryptocurrencies. Making the Ripple an attractive investment.
In other words, even though the Ripple is not like Bitcoin and it does not make a lot of sense to trade it for profit, it still has its merits. It stores a significant amount of value as a bridge currency. It also has a high liquidity, unlike most crypto assets. And the industry is sure we haven’t seen all of the possible innovations Ripple Labs can bring us.
That is why the future of Ripple and its price are considered to be bright. This is the best time to become part of it.
Hello, I am Collin Tyusm. I am a Forex blogger. I have created my blog, because I want to help people learn more about Forex & CFD Trading Software and Bots.