- Forget Bitcoin. It is time for Ripple now! - December 31, 2017
- Completing a successful transaction: Part 3 International Trade - April 11, 2017
- Negotiating And Planning To Win: Part 2 International Trade - April 5, 2017
- Launching A Profitable Transaction: Part 1 International Trade - March 28, 2017
It seems that everyone knows about Bitcoin today. So popular, in fact, that some are mortgaging their homes to buy the cryptocurrency. But wait, let me tell you something! As you are reading this, there are one cryptocurrency which climbed more than 50% on 29 Dec 2017 and has overtaken Ethereum and becoming the world’s second-largest cryptocurrency by market capitalization (market cap). The cryptocurrency is called “Ripple.”
What is Ripple?
Ripple currency, technically called “XRP tokens,” is all created and backed by a company Ripple Labs, a global money transaction business.
Ripple is different than other digital coins in that it cannot be mined. Strictly speaking, Ripple is not a digital coins, but a token. Coins like bitcoin trade on their own value, whereas tokens tend to be tied to something else, in XRP tokens case, they are essentially backed by traditional currencies. This makes ripple more centralized than other cryptocurrencies.
What is the real value of Ripple as compared to other cryptocurrencies?
While bitcoin and most other cryptocurrencies exist for the simple purpose of existing as digital money, XRP tokens was developed as a payments network for banks. It can take days to do this. As Ripple Labs CEO Brad Garlinghouse (who has held senior executive positions at AOL and Yahoo! between 2003 and 2012) puts it, the fastest way to transfer money from the U.S. to London is to get on plane and fly it over there.
XRP tokens allow funds to be promptly transferred between banks that have agreed to use this service. A transaction can happen at astonishing speed. XRP has a four-second settlement time, versus more than two minutes for ethereum and over an hour for bitcoin.
While bitcoin and most other cryptocurrencies exist for the simple purpose of existing as digital money, XRP tokens was developed as a payments network for banks.
For your information, SWIFT facilitates most of the international payment transfers currently. Whenever we make any cross-border transaction, we need to provide the SWIFT code of the branch of the bank. Ripple is collaborating with many banks to incorporate its blockchain technology. It’s hard to say how soon or whether Ripple will be able to take SWIFT down or not. However, it can indeed break the monopoly of SWIFT over the international fund transfer.
After some analysis, I believe that we are at the tipping point for XRP. Recently, Ripple had licensed its blockchain technology to over 100 banks. Last month, American Express came on board. Due to the fact that XRP, like Bitcoin, is deflationary in nature with a fixed amount ever going to be in circulation, as more of its inherent value increases, the price per unit will also increase. We are at the start of a snowball effect, once all 100 of these banking partners come online, and the network is proven to be superior, many more banks will begin clamoring to sign up.
It is believe that Asia accounts for at least a third of all Ripple trading volume, with the main adopters coming from Japan, South Korea and China via Hong Kong. It is just a matter of time before the “Ripple” effect will spread to the western part of the world.
Finally, before I invest, as a general rule of thumb, I would tell myself whether that particular investment will fulfill my four criteria:
1.) Is there any fundamental value?
2.) Is there any competitive advantages that set the company apart from other competitors?
3.) Is the team behind it a strong one?
4.) It is the right time to buy?
My answer to all the fours questions above is YES!
DISCLAMER: Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.