Yesterday, someone transferred 90,000,000 Ripple XRP tokens between two addresses of unknown portfolios, which induce the cryptotope to question the purpose of the move. Transfers of this size usually involve the portfolio of an easily identifiable cryptocurrency exchange, but in this case, both transaction identities are unknown – making the move much more suspicious.
Today it has been announced that XRP has been included in the extremely popular trading platform eToro, a traditional trading system that now supports both the fiat and the cryptocurrency. It is possible that the transfer may be related to eToro which acquires a large amount of XRP for liquidity, even if the quantity seems excessive also for a large exchange.
However, the most impressive aspect of the equation is the incredibly low cost of the transaction: only 0.005 XRP. The total number of XRP tokens transferred is equivalent to more than $ 33 million in value, but has received a commission of almost a third of a cent. Such a fiat currency transfer between traditional banks could easily result in a $ 1 million commission. In fact, converting 90,000,000 XRPs into usable fiat currency will undoubtedly attract additional fees, but the transaction shows the potential that digital assets represent for the future of international remittances.
Disadvantages of XRP
Obviously, XRP is not a proof-or-work blockchain (PoW) and as such it does not require any mining, which is why it attracts almost zero commissions. This means that even if it does not suffer from the high costs related to mining, it also does not benefit from the security and decentralization offered by the PoW networks.
This year saw Ripple aggressively working towards creating partnerships with banks in order to improve international payments, at some point it seems to challenge the decades-old SWIFT standard used by most financial institutions. With the ability to handle 10,000 transactions per second, it certainly looks more attractive than the slow Bitcoin network. However, as long as Ripple Corporation controls more than 51% of the supply of XRP, it will continue to receive criticism from skeptics about its decentralization, one of the key aspects of cryptocurrency.