Ripple Wiki ▷ What is XRP? Crypto currency & more!
Our Ripple Guide aims to give you completely unbiased information about the Ripple XRP token so that you can make an accurate assessment of your investment. We also show you how to buy XRP, but as always we advise you to be cautious before investing in a crypto currency and encourage you to do extensive research before investing your money.
- Ripple is an open payment network in which the XRP token is transmitted. The unique advantage of Ripple over many competing crypto currencies is that it tries to work with the current financial system.
- The Ripple network solves problems in the traditional banking system such as slow transaction times (processing of certain payments can take up to five days). Banks also spend $1.6 trillion a year in interbank transaction fees, while Ripple can do this at a fraction of that cost.
- XRP is the most centralized crypto currency. It is not an investment for people who believe in decentralization. 60% of the total token offering is held by Ripple itself, which means Ripple has massive control over the price of XRP. Ripple's control over their network means they also have the ability to freeze transactions and user funds.
- Ripple has an impressive list of partners, including names like American Express, Santander, Standard Chartered, UBS and many more.
- Currently, none of Ripple's partners have committed to use the XRP token. It remains to be seen whether banks and credit card companies will actually use XRP.
- The total maximum XRP offering is 100 billion. This means that in exceptional cases the value of the token will not reach that of Bitcoin . If the token were worth $10 and the total supply of XRP was in circulation, this would result in a market capitalization of $1 trillion for XRP.
What is Ripple anyway?
The Ripple token is also known as XRP and is transferred within the open payment network of Ripple. Ripple's ultimate goal is to create a global network of financial institutions to reduce transaction costs and increase the speed at which money flows around the world. The network will also serve as a liquidity pool for banks.
In addition, Ripple wants to offer a solution to two main problems that plague the current financial networks:
- Extremely high transaction fees in financial networks such as credit cards, bank transfers and e-wallets.
- Improvement of the transaction speed. Currently, banking transactions can take up to five days, while in the Ripple Network they can take up to 3 seconds.
XRP is the fastest, cheapest and most scalable crypto currency available.
Ripple is designed to be used by bank payment providers, companies and stock exchanges to save them money. This is different from crypto currencies like Bitcoin, which were intended for human use.
We process more than 155 trillion dollars a year worldwide and there is no doubt that the current payment infrastructure needs to be updated. Ripple is trying to be the much-needed update to the global payments infrastructure.
Partnerships with traditional companies
The Ripple network has tremendous potential to reduce transaction costs for banks, credit card companies and e-wallet companies, saving them $100 million a year. Ripple offers an undeniable dramatic improvement in transaction speeds of up to 3 seconds compared to the 5 days it can currently take in traditional banking. Unfortunately, two main problems remain:
- Convincing large companies like Santander and American Express to replace the Fiat currency and use the XRP token. If XRP is never adopted, it has no value.
- Bitcoin-News.one has approached the world's largest financial institutions and the difficulty is that financial giants are slow to embrace change; large multinational companies are not required to modernize systems. Why should a board member take the massive risk of driving the introduction of new technology, especially when the status quo allows him to charge the high fees that fund his bonuses? The long-term benefits of technology adaptation for customers seem to be sacrificed to short-term stability and profit margins for companies.
Can these large companies really be so outdated? The answer is yes. For example, have you ever wondered why, when you open a bank account, you are asked several times for the same data as your address? The reason is that banks do not have a central system to keep track of customers and accounts. Instead, current deficiencies in the system are corrected with minor repairs to save costs, even if this only makes the system more cumbersome.
In our highly centralized world, the strong centralization of Ripple may make it more likely to be taken over by large financial firms. As much as we would like to see the introduction of this technology, we at Bitcoin-News.one suspect that the introduction of XRP will take longer than many expect. Ultimately, there is too much money that can be saved by financial institutions to ignore XRP indefinitely. Whether these institutions then pass savings on to the customer or simply increase their profits is another question.
How does Ripple fit into the financial system?
Ripple offers a great opportunity to completely modernise the global transaction infrastructure.
Unlike many other start-ups, Ripple is not only a great idea but also has a very well rated product. You have a working product and a list of over 100 partners in the financial industry. Partners like American Express are well-known names and have a huge global presence. A single acquisition from a partner of this size would likely result in additional partnerships for Ripple.
The RippleNet makes it cheaper and faster for any business that moves large amounts of money across borders. Just about every listed company could benefit from a takeover. This illustrates the size of the market that Ripple is trying to get a piece of.
The Ripple network also acts as a currency exchange between all forms of Fiat. In order for the exchange to work, there must be liquidity and that is the use case for the XRP token. The XRP token is used as an intermediate value that is exchanged between financial institutions in the network. These tokens can then be converted back into the currency desired by the institution. The XRP can either be held or used for other cross-border payments, such as paying a supplier.
Unfortunately, it is unlikely that the average worker will receive much lift from the introduction of Ripple. The infrastructure is geared towards large institutions and we doubt that you personally will be able to make fast and super cheap transactions. However, if the Ripple project is successful, it will completely modernise the processing of cross-border payments.
Is Ripple centralized?
Centralization is defined as:
"the concentration of control of an activity or an undertaking under a single authority."
In the community of crypto-currencies, centralization is generally considered a bad thing. Why? Because with control comes power. As Lord Acton once said: "Power tends to corrupt, and absolute power corrupts absolutely". Can a person or institution that has power be trusted to be fair and not abuse power to serve their own agenda?
There is a maximum of 100 billion XRP in the supply chain, but only 39 billion are in circulation. So Ripple Labs holds the remaining 61 billion XRP. It is safe to say that Ripple, with its massive inventory, has significant control over the XRP token. The biggest fear of cryptography enthusiasts is Ripple's potential to sell all 61 billion of its XRP tokens at once. It could certainly crash the market and hurt everyone who invested in the token.
The difference between maximum supply and circulating supply is the amount of XRP that Ripple Labs holds.
With this, Ripple Labs has taken steps to build trust in the community. They announced in May 2017 that 55 billion XRP would be placed in escrow accounts. This means that investors can now mathematically verify the maximum amount of XRP that can enter the market. We see this increase in certainty as very good for XRP investors.
Would Ripple (XRP) be a good investment?
Only you can make the decision whether to invest in XRP or not. But we can give you our opinion.
- Unlike other crypto currencies, we think Ripple is very well positioned in the work product, use case and partnership categories.
- It is also very positive that the company is already generating real income.
- XRP is designed for collaboration with the current players in the financial system. It is therefore unlikely that many financial institutions will have a real incentive to destroy Ripple.
- Whether the XRP token will actually be widely accepted by financial institutions remains questionable, however.
- The 61 billion XRP tokens still to be released will be integrated into the cycle and thus doubled.
- Ripple is still much more centralized than other crypto currencies. It all depends on individual opinion - whether you think this is a good thing for such a product and what goals can be achieved with it, or what limitations it may have.
Ripple has some important supporters from the non-crypto world like: GoogleVentures, Accenture, Santander InnoVentures, Andreessen Horowitz and more.
The support of large companies such as these will be critical to realizing the Ripple vision and fortunately, these donors have invested financially and are motivated to make the Ripple project a success. We think this is a very good additional investment case.
How do you buy Ripple?
We have compiled this comprehensive guide to buying XRP using a variety of methods and exchanges.
In the crypto-currency area, we at Bitcoin-News.one think that there are few viable projects that can actually challenge the old financial system. Ripple appears to be a legitimate competitor and has the potential to completely modernize cross-border transactions.
Ripple has developed the technology that enables financial institutions to achieve significant cost savings and efficiency gains. This explains the more than 100 partnerships with, for example, American Express and the strategic investment of companies such as Google Ventures. It remains to be seen whether the XRP token will actually be used by the old financial world.
When you invest in XRP, there is no real use case for everyday use. The intended function is aimed at large financial institutions. However, XRP gives crypto currency investors the opportunity to benefit when XRP is adopted as the new global payment infrastructure.