Price: $0.41492508
+ 2.89%
Volume(24h): $185,992,693
Market Cap: $41,752,740,500
A blockchain platform that connects banks, payment providers and corporates. The open payment network of Ripple, which runs the XRP cryptocurrency, allows a wide range of cross-border payments to exchange almost instantly and at a negligible service fee. The P2P basics makes it suitable and reliable for both business and other currency transfers, like remittances. A growing number of banks show interest in Ripple’s distributed networks technology, as it helps lenders process payments faster and achieve greater efficiencies.

Latest Hight: $5,193.69

XRP Markets

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Ripple Makes Global Payments Fast, Cheap and Easy


• Area to disrupt: Cross-border money transfers

• Competition: Stellar, SWIFT

• Founded by: Ripple Labs

• Based in: San Francisco, California

• Total supply: 100 billion


XRP logo



XRP Price - More Than 38 000% Gains for 2017

Ripple’s XRP token is a pre-mined coin with a total of 100 billion units created in 2013. The creators retained 20 billion XRP.

When XRP hit the exchanges for the first time, in August 2013, it was trading for less than one cent. Most of the time for the next three and a half years – until late March 2017 – XRP was changing hands for less than one cent. It had occasional spikes in December 2013 and December 2014 when the price reached USD 0.06 and USD 0.028, respectively, but as a whole, there wasn’t too much action going on.

Ripple’s XRP token is a pre-mined coin with a total of 100 billion units created in 2013. The creators retained 20 billion XRP.

XRP saw a significant surge in April and the first half of May 2017, following Ethereum’s rise, and moved from USD 0.01 on March 30 to USD 0.42 on May 17.


Ripple physical tokens

There was a correction shortly after that and for the next six months, XRP was trading between USD 0.16 and USD 0.32.

In December 2017, XRP went bananas and surged from USD 0.22 to USD 3.80 on January 4, 2018, becoming one the most profitable investments for 2017 in the whole crypto market.

From January 1, 2017, to January 1, 2018, XRP increased its value more than 380 times.

As of June 1, this is still Ripple’s all-time high.

At the end of May 2018, XRP was trading at around USD 0.60. With over 39 billion XRP in circulation and a market capitalization of nearly USD 23 billion, Ripple is taking the number three spot of all cryptocurrencies.



Ripple’s Goal Is to Change Traditional Banking


It is extremely important to remember that Ripple involves three things:

1. Ripple Protocol a.k.a. Ripple Transaction Protocol

2. XRP - the native currency of the Ripple Network

3. Ripple Labs - the company that created Ripple Protocol

Ripple logo


First, let’s see what problem does the Ripple Protocol solve?

Ripple’s system aims to connect banks around the world to allow for payment systems with secure, instant and nearly free transactions. Basically, its goal is to change the traditional banking infrastructure. How will they do that?

Through the Ripple Protocol. It enables the instant and direct transfer of money between two parties. If we open Ripple’s website we will see that the protocol is described as a "basic infrastructure technology for interbank transactions – a neutral utility for financial institutions and systems”.

Ripple is facing a massively growing adoption by banks and payment networks as a settlement infrastructure technology. Its users include UniCredit, UBS Santander, BankDhofar.

We said that XRP is placed third by market capitalization in the crypto world, but in this regard, it is important to highlight some specifics of Ripple:

• Unlike Bitcoin and Litecoin – Ripple is not continuously mined, and new coins are not being created. On the contrary, the total supply is actually reduced because XRP is used to pay for transactions and then it is not recovered.

• While new supply is not being created, a large piece of the total supply (60%) is kept out of circulation and is being injected little by little.



The Ripple Protocol Doesn’t Need XRP to Be Adopted


Ripple or the Ripple settlement system is quite different from the other major cryptocurrencies out there.

In large – because it is not actually a cryptocurrency. Ripple's design focus is as a currency exchange and a distributed real-time gross settlement system (RTGS), as opposed to emphasizing XRP as an alternative currency.

So, Ripple’s prime objective is to serve large money movers such as banks with quick and trustworthy settlements – analysts claim that settlements through the Ripple protocol are significantly faster and 30% cheaper than traditional inter-bank settlements.

However, the system has its own native cryptocurrency – Ripples (XRP), and while the application of the Ripple settlement system is not depended on the use of XRP – there are certain benefits to doing so.


Two men sent transactions on smart devices


Once again, users of the Ripple network are not required to use XRP as a store of value or a medium of exchange.

Instead – any assets can be used on the settlement network, provided they can be represented as debt obligations.

When a non-XRP payment is made between two users that trust each other, the balance of the mutual credit line is adjusted, subject to limits set by each user. In order to send assets between users that have not directly established a trust relationship, the system tries to find a connection between the two users such that each link of the path is between two users that do have a trust relationship. All balances along the path are then adjusted simultaneously and automatically. This mechanism of making payments through a network of trusted associates is named "rippling".


However, even if the users of the Ripple protocol are not required to use XRP, and only minimal amounts are necessary to facilitate any transaction – there are significant benefits to using XRP on the Ripple Network instead of any other asset or currency.

The most prominent one is the transfer of funds which requires an exchange of currencies.

As ordinary users we are used to this process going smoothly and don’t experience any difficulties in making wire-transfers in foreign currencies – the banks simply apply the daily exchange rates and make the updates to the balances.

However – there is a complex mechanism in the works, in the backgrounds – in order for our bank – Bank A to make a transfer to the receiving bank – Bank B, in its native currency – Bank A, needs to have access to X amount of Bank B currency.

This is normally handled through a nostro account – held in another bank, to which Bank B currency is native.

Now imagine, Bank A has to make daily transfers to Bank B, C, D…. Z, in their respective native currencies – daily. The cost of holding nostro accounts in banks around the world can be reduced dramatically – if replaced by holding a single XRP account – which is accepted in all banks, part of the system.



Is XRP Worth Investing? Something to Consider


For this conclusion overview we will focus on Ripple as the native cryptocurrency of the Ripple real time settlement system - XRP.

While the Ripple system has its current applications and is already gaining momentum with some of the largest money movers in the world – we must separate the Ripple system (what the banks are currently implementing) and the cryptocurrency XRP.

The primary use case for XRP is as native currency between the clients of the Ripple settlement system – basically to simplify exchanges between different fiat currencies.

In a way – it is the second stage of adoption of the Ripple settlement system. Once the banks are sold on the Ripple system, it is easier to see them adopting the native currency of the system – as a way of further transfer optimization.

coins and diagram


However, The Question Remains - What The Value of This Asset Should Be?

For even if the Ripple product is great, and the use case for a native cryptocurrency is valid, the value growth potential is unclear.

The Ripple coin is currently valued at over USD 60 billion (if we take all XRP in existence) – even without a major adoption among Ripple clients.

This is an incredibly high valuation for a token, that is not adopted by its primary target customer yet.

Furthermore, the fact that the leadership of the project is focused on a relatively small number of big money movers rather than mass adoption, ultimately means that the product will be molded in order to fit their needs.

The needs of the banks in relation to settlement systems is for them to run fast and predictably, even if adopted, this will be used by its primary customers as an operating commodity, not an investment asset.


Hence We, Can Make The Logical Conclusion That:

If the project is not successful, and the Ripple settlement system remains at its first stage of adoption – the token will lose its primary use case and hence most of its value.

If the project is indeed successful and the large money movers adopt XRP as the primary mean to do so, their interest will be to have zero volatility against fiat – which will be the case.

Zero volatility means zero growth expectation. Hence, past a certain moment of the project development, XRP will be limited to zero appreciation vs fiat.

The question is – when that moment will come. But do consider – XRP is already valued at over USD 60 billion.


Description text: Lyubo Zhechev
(The views and opinions expressed by the contributor in this text should not be considered financial advice, neither treated as expression of Coins.Online’s view.
Cryptocurrency trading and investing is risky and market participants are advised to always conduct a thorough research.)