Ripple: The Road Ahead

(As featured in The Market Mogul- September 29, 2017)

Written by: Thomas Smith

Ripple, the real-time gross settlement system and currency exchange, has had an impressive 2017.  One of the 4 most valuable cryptocurrencies, it has recently enlarged its presence in Asia with the opening of a new office in Singapore; a sign of determination from the company to further expand into the cryptocurrency world.  Its decision to open a new office in India –the world’s largest remittance receiver- only signals further intent of the network’s desire to compete with crypto giants such as bitcoin and Ethereum. Signing to around 100 banks worldwide thus far, its expansion is patent and set to continue. As Navin Gupta, the leader of Ripple operations in the country, states: 


India is the largest recipient of corporate and retail remittances worldwide, totaling close to $71bn…Ripple’s instant, cost-effective blockchain-powered payments can be a transformative component of India’s economy, helping bring the many who have limited access to payments services into the fold.”


Ripple’s Benefits

Ripple’s aims to reduce remittance transaction costs and to speed up the process of transactions (currently advertised at around 4 seconds per transaction) are part of the reasons why it has surged in popularity for investors and cryptocurrency users in 2017. This speed of transaction is in stark contrast to SWIFT, which can take 4-5 days to send transactions, and Bitcoin, which takes approximately two hours. A further reason for its allure is its ability to manage a considerably higher number of transactions simultaneously compared to its rivals, handling in the region of 1,500 transactions per second. Another attractive facet of the new company is its ability to act as a bridge between fiat currencies, and the current usage of Ripple by major firms such as Santander and UBS evidences its popularity within the global economy.

China’s recent ICO ban seems not to have majorly dented the progress of Ripple (despite a recent minor fall of around 4% – a normality given the often cyclical nature of cryptocurrency share prices), and the company recently surpassed Bitcoin Cash to move into 3rd place in the market cap rankings, with a cap of $7.8bn. There is now a distance of $250m dollars between Ripple and Bitcoin Cash in the rankings, symbolling the sharp growth of Ripple. 

It is unlikely, however, that Ripple will overtake the popularity of the renowned Bitcoin. Despite Jamie Dimon’s proclamations that the cryptocurrency is a ‘fraud’ and that ‘someone is eventually going to get killed’, the grandfather of cryptocurrencies is still performing strongly, as shares recently surpassed the $4,250 price mark, The strong rebound of bitcoin in the last week- which increased by $600 in under three days ($0.1923 at time of writing) following a slump after North Korea accused the US of declaring war- highlights its resistance to external factors and popularity with investors. Indeed, analysts predict that bitcoin could plausibly break the $5,000 mark in the near future.


Ripple’s pledges to its investors that it will make its blockchain ‘more secure, efficient and decentralized’ and its decision to commit $55bn XRP in escrow by the end of 2017 will ease investor unease regarding unpredictability and shall assist in its share growth.

Furthermore, that the supply of XRP is finite and it is a deflationary cryptocurrency is a further source of reassurance for shareholders, and the company’s possession of over half of all available XRP tokens means that Ripple will not flood the market by selling their own XRP holdings.  In the first half of 2017, Ripple’s digital currency increased by as much as $4,000, and whilst growth has not been as sharp as in the first two quarters of 2017, the future looks bright indeed for Ripple.

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