Ripple (XRP) To Steal The Show In 2018
Ripple (XRP) has grabbed the headline for all the good reasons last week. While other cryptocurrencies were affected by a general slump in the industry, Ripple has continued its impressive bull run.
Its recent surge can be attributed to the new partnerships with traditional finance who are keen to use the crypto’s technology to reduce transaction cost and time.
Ripple has become a crypto coin of interest to traditional financial institutions across the world, with their recent partnership with the American Express in the U.S. and partnerships with several banks in South Korea and Japan a testament to that.
Ripple has a record four-second transaction settlement time, much lower than what bitcoin about an hour) or Ethereum (two minutes) can muster. This is the reason why banks have begun testing this potential with the hope of utilizing them in real-time payments, especially in cross-border payments.
The ripple network works in a slightly different way from other blockchains. Ripple is a private company with their protocol managed in that manner. It doesn’t operate with an open source like the others, but it is still considered in the cryptocurrency list since it utilizes the distributed ledger technology.
The main aim of Ripple is to take over the current swift system of transactions between banks. International money transfer usually takes between two and five business days and costs about $25. Ripple aims to conduct these type of transactions within seconds and at a significantly lower price.
As a means of payment for a transfer, every transaction that is made using the Ripple network takes up a small amount of XRP tokens. Those tokens utilized will disappear after that and will never be used again. This implies that the entire economics of the Ripple coins are super deflationary, thus with time, the supply will go down while the price will increase.
To avert this, Ripple has begun the project with a huge amount of tokens (100 Billion tokens). Even though the team has recently locked up more than 50% of their tokens in a long-term escrow account, there are roughly 39 billion XRP coins currently in circulation.
Even though the currency is sold cheaply ($2.29), the total market supply should be considered. Ultimately, the value of the cryptocurrency would be determined by the banks. As more financial institutions begin to use Ripple as a payment gateway, then more XRPs will be needed to fund their transactions.