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In 2009, Bitcoin was the only cryptocurrency on the market, but the landscape of this sector has changed dramatically over the past decade. Thousands of other cryptocurrencies have since been introduced and one of them is XRP, also known as Ripple, named after its parent company. I
It has become the third largest cryptocurrency on the market in terms of market capitalization. For one reason or another, XRP has generated a lot of interest and is increasingly being incorporated into banking systems. Therefore, it is only natural for people to wonder whether it is a good investment or not.
The key to finding the answer to this question is to take a close look at Ripple (XRP) and its various aspects.
An introduction to XRP
First, you need to know exactly what XRP is. Just like another altcoin Ether (founded by Ethereum), people confuse XRP with its parent company, namely Ripple. In the case of this cryptocurrency, Ripple is the network, which was developed by Ripple Labs, as an open source protocol.
Although now it is possible spend XRP in more than 180 countries around the world, it was not created for this purpose. The main reason for developing this token was to use it to facilitate cross-border currency transfers via the Ripple network.
Is it a good investment?
Ripple (XRP) is considered a great investment because it has enormous growth potential. Because it has low prices, it can be a profitable investment opportunity and is increasingly adopted by multinational banks due to its use via the Ripple network for fast, low-cost currency transfers.
How does it work?
Settlement systems that exist today for transactions, such as PayPal and SWIFT, generally use US dollars as the currency for conversion.
Consequently, it carries a high cost and also takes time. The purpose of XRP is to serve as a broker that can settle transactions almost instantly and at a fraction of the cost. The token can do this through a liquidity network called RippleNet which uses XRP. It was developed primarily to eliminate costly and time-consuming transactions. The network’s currency token is XRP.
How is it different from others?
There are a number of factors that do Ripple (XRP) different from other cryptocurrencies on the market. Some of them are:
- It does not have a blockchain
Compared to Bitcoin and other cryptocurrencies on the market, XRP doesn’t work on a blockchain. To verify transactions on the network, people must use Ripple’s technology, known as the Ripple Protocol Consensus Algorithm (RPCA). It works the same way as a blockchain in the way there has to be a consensus on the network for transaction verification. For this purpose, a consent protocol is used.
Another feature that sets Ripple (XRP) apart from others cryptocurrencies such as Bitcoin it is the fact that it is not extracted. While this cryptography also has a limited offer like the pioneer crypto, it is not created through the actions of the miners. Instead, Ripple, the parent company, is responsible for the issue. When it launched in 2013, 100 billion coins of the currency were created. But today only half of these coins are in circulation. Ripple periodically releases the coin from the escrow.
Since Ripple does not operate on a blockchain, this cryptography is centralized. For example, with Bitcoin, the whole goal is to get rid of intermediaries and third parties. However, when it comes to Ripple, it is fully controlled by its parent company and its services are sold to numerous banks, which cannot be done in the case of Bitcoin.
XRP’s pricing history
Since it launched in 2013, there have been some crazy fluctuations in the price of XRP. Until 2017, the price of the cryptocurrency had barely managed to reach $ 0.01. However, in March and April 2017, Ripple’s price suddenly started to rise.
At the end of April, the Ripple price it had hit $ 0.05 and didn’t seem to stop. It had reached $ 0.25 in May. Over the next two months, it reversed for a while, but by the end of 2017 and the beginning of 2018 it had skyrocketed again, just like the prices of other cryptocurrencies during this period. In the infamous cryptocurrency rally around this time, Ripple’s price reached $ 3.84 in January 2018.
However, it once again lost more than half its value within two weeks. It had dropped to $ 0.30 in early 2019 and has not broken the $ 0.50 mark so far. As for future price predictions, analysts have different views on Ripple.
According to some, if Ripple continues on this path to gain wider adoption, there is a possibility that its price may end up reaching $ 200 – $ 300 by the end of 2030. Other predictions have been $ 5, $. 17 and $ 20, but there is no definite way to predict how things will go.
Invest in XRP
Making an investment in Ripple (XRP) could undoubtedly be a wise move because its technology allows for extremely cheap and instant financial transactions.
In addition, it also has great scalability, as it is capable of processing more than 1,500 transactions per second. This makes it at least a thousand times faster than the leading cryptocurrency, Bitcoin. Thanks to these characteristics, Ripple has managed to obtain the support and support of numerous financial institutions and multinational banks. These include names like Bank of America, Santander, and JP Morgan.
In fact, in June 2019, Ripple also signed a strategic agreement with MoneyGram, the global money transfer giant.
These deals indicate that Ripple will be successful in the future and investing in Ripple means that you are not only investing in the currency, but also in the company itself. If the business continues to perform well and grow, encryption will follow suit.
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