Ripple (XRP) is a cryptocurrency with a lot of potential that most people ignore because it generates little news.
The idea behind Ripple is the same as that behind several of its competitors; including Ethereum, NEO, and Waves – to create a faster, cheaper, more transparent, more secure, and more reliable system for transmission of funds. To that the end the team behind Ripple has developed several blockchain-based solutions; including the XRP cryptocurrency, the xCurrent global payment processing app for banks, the xRapid solution for payment processors, and the xVia payment transmission solution for businesses.
All of these solutions operate on the RippleNet ecosystem, which the Ripple team claims is the most advanced scalable blockchain technology available today. Scalable means that it can be built and expanded fast.
Major Banks are Using Ripple
Some major banks and large corporations are experimenting with Ripple and participating in the RippleNet project.
The major participants in that project include; American Express, The Royal Bank of Canada (RBC), Santander, UBS, BBVA, Westpac, Standard Chartered, and Mizhuo. Unfortunately, it is not clear what the banks and companies are doing beyond playing around with the Ripple technology.
Although the technology is quite impressive Ripple Net can supposedly provide real-time global payments across 27 countries. The hope of that is to tap into the extremely lucrative international remittance market which was worth $582 billion in 2015 according to the World Bank. Immigrants in developed like the United States and Canada sent $582 billion to friends and relatives back home in 2015.
Another huge market that Ripple is designed to capitalize upon is cross-border payments made by businesses. Guam Jain the global head of digitization at Standard Chartered estimated the value of that market at $155 trillion a year.
The Problem and Opportunity with Ripple
As you can see the potential value of Ripple is huge, the XRP altcoin might gain a lot of value – if banks really start using it.
The problem is that only a handful of banks are taking part in the experiment, and no major U.S. bank is participating in the Ripple Net project. Nor are banks in many other countries including China, France, and India. To make matters worse American Express seems to be the only credit card company participating in Ripple Net.
Another group that definitely refuses to believe the hype about Ripple is investors. On November 22, 2017, an XRP altcoin had a Coin Price of 23.5¢, and a Market capitalization of around $9.25 million, CoinMarketcap reported. In contrast, a unit of Ethereum or ETH was trading at $365.46 on the same day.
Ethereum also had a Market Capitalization of a little over $35 billion on November 22, 2017. Ethereum had a circulating supply of around 95.89 million coins on the same day.
The Potential Value at Ripple
This might make Ripple out to be one of the best potential values on the cryptocurrency market today because it had a Circulating Supply of 38.622 million coins on November 22, 2017.
There is a lot of room for growth in Ripple because the total supply of XRP on November 22 was 99.993 million coins. That means the value of Ripple’s Market Cap can theoretically increase to $23.948 million if the entire Total Supply is released into the market.
That’s still a big if and the value of Ripple would not be that great even if the entire Total Supply were available on the market. This probably would not happen because miners would simply mine more of the 100 billion Total Supply and drive down the price even further.
The opportunity here is that there is a vast amount of potential growth out there for Ripple. The problem is that growth is not yet occurring.
An Interesting Opportunity with Ripple
There is one other interesting opportunity with Ripple it has a Maximum Supply of 100 billion. Meaning there is a limit to the potential number of coins and a possibility of scarcity – which can drive up value. Another advantage to that is having a hard limit can diminish the possibility of inflation and help the coins retain long-term value.
There is no Maximum supply or limit to the amount of Ethereum that can be produced. That means there will never be a scarcity of Ether, which can seriously limit the price if demand increases miners will simply mine more which can lead to inflation. The drawback to that is there is no guarantee that the maximum supply of Ripple will ever be reached.
The big opportunity here is obvious, Ripple is an altcoin that is being studied for possible use by banks and large corporations. It is cheap, and there are potential limits to the supply that can increase value.
The major problem is that neither the cryptocurrency community nor banks seem to be accepting Ripple or using it. That means it might remain nothing but an interesting experiment or a technology that will be cannibalized for its algorithms and used elsewhere.
Too Much Ripple
The big Maximum Supply of Ripple presents another obvious drawback; the price can fall incredibly low. That can happen because there would be too much Ripple on the Market.
The price of an XRP altcoin is already very low at 23.39¢ it can fall far lower if more Ripple enters the market. If the Circulating of Ripple were to double the price might fall to 11.98¢ an XRP. If the Circulating Supply of Ripple were to triple the price might fall as low as 7.8¢ or lower.
A true nightmare would be Ripple values fall to below 1¢ for an XRP. This is possible because there is no low a currency cannot fall to if inflation sets in. That is unlikely with a cryptocurrency because most investors would pull their money out before it happened, but it is possible.
Where and How to Buy Ripple
A major drawback with altcoins like Ripple is that you sometimes have to go out of your way to buy them. You will not be able to purchase XRP through wallets like Coinbase, but it is available on major exchanges like Bitstamp and Kraken – which do accept MasterCard and Visa credit and debit card payments.
Other exchanges that sell Ripple to individuals include; Gatehub, Coinone, btcxIndia, Coincheck, Korbit, Qryptos, bitbank, Bitsane, Bitso, BTC Markets, LiteBit, Bitcoin Co. Lt., and Bitcoin.co.id. A list of exchanges sells Ripple is available at the cryptocurrency’s official website.
Read the instructions at the websites carefully when shopping for Ripple because not all of these exchanges will work with American or Canadian customers. Some of them may also refuse to accept certain kinds of payment such as bank transfers from the United States or Canada.
Ripple cannot be Mined
A major drawback to Ripple that might be an opportunity is that the cryptocurrency cannot be mined. That means you cannot buy it from companies like Genesis, but also that miners cannot flood the market with vast amounts of additional coins and drive down prices.
This means that the only Ripple on the market is that released by the creators. This makes Ripple more like an initial cryptocurrency offering (ICO) than a widely used altcoin.
Therefore a really good way to think of Ripple is an ICO, rather than as a widely-used cryptocurrency. It also makes Ripple a purely speculative investment rather than coin you would use as a hedge against inflation. You would only buy Ripple because you think it is planning to grow in value in the future.
Persons waiting for Ripple to grow in value might be sadly disappointed because its rate of growth is pretty limited right now. Ripple gained 2.33% in value on November 22, 2017. That means the value of a Ripple coin grew by around .00056 cents on that day.
Those waiting Ripple to appreciate in value might have to wait a very long time. Persons who need a cryptocurrency that pays off faster would be far better served by Bitcoin or Ethereum. Any real payday from this cryptocurrency is still a long way off.
Most investors would be well-advised to stay away from Ripple unless major banks or corporations actually start using it. Until then it is a speculative altcoin of very dubious value.
Another Drawback to Ripple
A final shortcoming to Ripple – is that there appear to be few places that accept Ripple places. I was unable to locate any Ripple debit cards on November 22, 2017, through a Google search.
There are some online merchants that accept Ripple payment but no retailers accept the coin. This website has a list of merchants that it claims accepts XRP payments. Unfortunately, the list does not appear to be very accurate or up to date, the website states it has not been edited since June 1. To make matters worse this list does not say what year it was updated in.
Even though Ripple is a very interesting cryptocurrency it is not very useful. Investors looking for a good return; and persons in search of a versatile payment solution, would be well-advised to look elsewhere. There are other more widely accepted cryptocurrencies, such as Ethereum, that have far greater potential.
Despite that Ripple is an altcoin to watch because of the corporate and big bank interest in it. The best strategy would be to monitor it and buy only if there is real evidence the currency is about to widely used.
The only way that Ripple can become a major cryptocurrency is for big banks, large corporations, or governments to start using it. If that never happens, Ripple will remain nothing but a very interesting experiment.