In the past few months ICOs and crypto prices have been skyrocketing and buzz around them has been increasing. Everywhere you look, online or offline, a lot of people are talking about bitcoin and other cryptocurrencies. And then a big slump happens. Correction happens, over
Everyone is looking for the next coin to invest in but nobody realizes what the meaning of all this is.
So in order to properly invest you must not only understand the concept of investing, candle charts etc but also, understand the technology behind each coin and what it aims to achieve.
For example, everyone is excited about bitcoin but nobody realizes what the point of bitcoin is. They throw in a few thousands, wait a few days and hope that the price will double and they end up losing their money because they invested at a peak, right before a price correction.
But this article is not about bitcoin specifically. This is about the blockchain technologies and what they can bring to our future.
So everything blockchain related started in 2009 with the birth of bitcoin by Satoshi Nakamoto. Bitcoin came around with many promises. One of the key aspects of Bitcoin is that there exists a finite supply of Bitcoins which will be released at a specific pace and no more will be circulated after they ran out.
This, by design, makes the currency to not only resist against inflation, but rather, deflate as time passes by. Bitcoin also promised bankless transactions in a decentralized network where there will not exist a true central authority that will control the currency, but we, the users of bitcoin, will control the currency ourselves by verifying all transactions done by everyone. By removing the central authority a trust problem would ensue, as we all tend to trsut the central authorities (banks) that currently control money to verify the transactions we make. But by adding the verification process to every single one of us, then the trust falls in the network itself and it becomes self sustainable.
Now I am aware that the small description I gave to bitcoin is over-simplified and missing a few key aspects but bitcoin is not the subject of this article, this was just a small introduction.
So Bitcoin came to bring a revolution in the way we handle money by removing banks and all other authorities that would oversee us and we will be our own personal banks.
Well my personal opinion is that in the future of human technology I foresee two possible outcomes.
1. A Revolution of our current monetary systems where FIAT currency dies and we all move to a cryptocurrency (Whether that is Bitcoin or Litecoin or some other coin that has yet to arrive in our lifes)
2. An Evolution of our current technologies and monetary systems with which we adopt the crypto and blockchain based technologies to improve what we currently have. Not only in monetary systems but in real estate, asset management etc etc.
Well Ripple is part of the second point. It came here to help our current banking technologies evolve and adopt new technologies brought in by the blockchain.
Ripple network was brought here to simplify and expedite money transferring problems.
Right now if you go to a bank and request money to be transfered to someone else’s account who is on another bank, at least two working days are needed. IF that bank is abroad? Then even more.
And then, the bank comes and charges you a small fee for this transaction.
Besides banks, exchanges also exist, which will reduce the time to instanteous and charge a higher service fee.
Well this is what Ripple came to solve. Ripple is an evolution to the way money transactions are happening. But before we get in deep we need to discuss the differences between Ripple Protocol and Ripple Tokens.
The Ripple Protocol is the alternative to replace SWIFT transfers for international transfers that were created by Ripple Labs. XRP, on the other hand, is the cryptocurrency that Ripple Labs created and advocate for everyone to use, especially on its Ripple Protocol system. A key point to note is that Ripple Protocol and XRP are not directly related, and the adoption of the Ripple Protocol does not mean that the price of the Ripple Token would definitely increase. Such an example can be seen where American Express utilizes the Ripple Protocol but does not accept XRP.
The reasons to adopt XRP are many. We have ease of use, fast transfer speeds between countries, low cost and great liquidity.
According to Ripple website transfer times are as low as 4 seconds which brings them ahead of all competitors and actually makes it usable for day to day use. Furthermore it highly reduces the cross-country money transfering costs, thus providing a real benefit to its users.
ANother thing that has attracted me as an investor is how many already established organisations have adopted the Ripple Protocol. According to Forbes more than 100 financial institutions have adopted Ripple and many more are coming.
Using all the above information it is fairly clear that XRP has a defined path for the near and far future. This for me makes a coin more viable than others, and given that I am not, nor will I ever be, a daily trader I need to be convinced by the far future of a coin in order to invest in it. Ripple and XRP have me convinced.
Now if you follow my suggestions and also invest in XRP keep in mind that XRP most probably will not reach the high prices of bitcoin. XRP has much more coins in circulation (both total and current) than Bitcoin. Ripple has a current circulation of 38,739,142,811 XRP which means that while the market cap may rise or even skyrocket, the price will not skyrocket as fast due to its high circulating supply. That does not mean it will never reach those high prices, it just means it needs higher market cap to reach them. And as more banks and financial institutions are adopting it, the higher the price will get.
Disclaimer: Diversification is key in this bussiness. Never put all your eggs in one basket. Just pick a couple of baskets that seem the most durable. I am not an investment specialist nor an investment advisor. What was presented above are my personal opinions. Risks always exist when investing your money so never invest money you are not willing to lose.