Ripple, one of the most talked about and recently hyped cryptocurrency has gained major highs in December 2017 when suddenly crashing down in the beginning of January 2018. Ripple can be defined as a real time gross settlement system (RTGS), currency exchange and remittance network. It is very different from the market leader called Bitcoin. It is not based on computing proof of work but instead on a shared public database which uses servers that can belong to anyone from individuals to banks. Therefore Ripple also called XRP enables rapid transfer of money directly between two parties. This includes a transfer of any asset from fiat currencies, gold and even airline miles. Fees are much lower and therefore Ripple is a solution to the high transaction costs of banks.
Ripple co-founder Chris Larsen, who became a billionaire in the beginning of January 2018 said Ripple sets out to solve the problem of cross-border international payments.
“The problem in the world today is that the world’s value networks…they don’t inter-operate,” Larsen said. “It’s literally faster to FedEx money to Europe than it is to send it through your bank. In today’s wired world, that is unacceptable.”
Larsen was right in the fact that cross-border payment is a growing issue, as statistics have shown trillions of dollars being stuck in the world.
Chris Larsen was the fifth richest person in the world for a few days thanks to the rapid growth of Ripple which hit an all-time high of $3.84 just recently. This was because of 5.19 billion XRP being in his name. This made him jump to $59.9 billion on paper, which was way more than Mark Zuckerberg.
Critics have denounced the volatile nature of cryptocurrency, but that has not stopped certain investors in riding the cryptocurrency wave.
Ripple has joined hands with major financial companies such as American Express, Santander, and MoneyGram which shows it has major potential. However, since its still not been embraced by banks this cryptocurrency will remain volatile in nature.
“Definitely the ripple ecosystem is definitely going to have to get a lot bigger to justify where XRP is right now,” said Michael Graham, an analyst at Canaccord Genuity who has covered internet stocks since the late 1990s said. With XRP only being used by Cuallix for US- Mexico transactions, it is not sufficient.
Ripple has since fallen by half and is currently priced at $1.389 at time of writing.