While altcoins, in general, grew in popularity in 2017, few experienced as much growth as XRP did (around a 4,000% growth rate). This upward movement continued throughout 2017 and peaked in January 2018 when the price of XRP reached a record high of $3.64. In 2018, the value of XRP dipped, which often happens when a cryptocurrency undergoes rapid growth. In June, XRP experienced a 35% loss.
Ripple is Resilient
Despite downward trends through much of 2018, the coin remains popular. Thus, its ability to rebound is stronger than you would expect from a lesser known altcoin. Right now, XRP averages a daily trading volume of $269 million, which makes it the third largest cryptocurrency behind Bitcoin and Ethereum.
Cryptocurrencies have a reputation for volatility, but increasingly they also have a reputation for resilience. Major coins like XRP gain new uses regularly, and this increased utility will fuel the continued growth of Ripple as a company. Every time Ripple demonstrates a new application or advantage, investors will take notice and prices of XRP will spike.
Expanding Customer Base
Successful cryptocurrencies manage to keep investors interested and incentivized, which is a difficult task. This is why many altcoins lack endurance. However, XRP has managed to stay relevant better than most. Recently, Ripple has made an active effort to expand its influence in Southeast Asia, while also continuing to reinforce its dominance in Japan. Ripple secured a deal with Mitsubishi UFJ Financial Group, the largest bank in Japan.
Indonesia, Singapore, and the Philippines are also some of the hottest cryptocurrency markets. The more business initiatives Ripple can drum up in these countries, the easier it will be to ensure a large trading volume.
Meanwhile, Western Union and MoneyGram have both started to accept XRP as a valid currency for international transactions. This has helped legitimize XRP as a payment option, which in turn will help to expand Ripple’s customer base. The recent launch of mobile XRP by Santander Bank will have a similar effect. Both of these developments will make XRP easier for people to use as a payment option, and will, therefore, make it more profitable for people to use.
The partnership with Santander Bank is especially important. The bank, headquartered in Boston, services over 100 million people. This will help keep Ripple relevant since there are very few major banks that have cryptocurrency payment apps.
In March, Ripple revealed that they had a new partnership with Hyperledger, a project intended to support the development of blockchain-based distributed ledgers. XRP is a coin that depends on the real-life application to sustain its popularity. This partnership will make it much easier for Ripple to continue to find new and innovative blockchain applications and help to gradually boost the price of the XRP coin.
Advantages of the Ripple Platform
One of the benefits that the XRP coin has is its efficiency as a payment method. The platform is peer-to-peer and compatible with many different currency exchanges and many different forms of money transfer. Together, this means that making money transactions with the XRP coin is fast and reliable. XRP can be exchanged for US dollars, Yen, Bitcoin, and many more, which makes it versatile both as a payment option and as a go-between for other fiat and digital currencies.
Utility for Banks
One of the best aspects of the Ripple platform is that it can accommodate high traffic. The network is able to perform many transactions at once without sacrificing speed. Several major financial institutions have integrated the Ripple protocol into their systems, including Bank of America and American Express. More and more banks are choosing to implement Ripple over Bitcoin because Bitcoin cannot handle so much traffic as quickly as Ripple can. What takes Bitcoin minutes to do, the Ripple platform can do in seconds. And with physical currencies, transactions can take even longer. Some wire transfers take a week to complete.
The utility that XRP provides for banks will help make sure the Ripple platform stays relevant. The more banks that adopt the technology, the better XRP will fare in the endurance game over Bitcoin and Ethereum.
One thing that separates XRP from Bitcoin is that it uses a consensus protocol as opposed to a proof-of-work system. The consensus protocol verifies account balances within the network and through a majority vote determines the hierarchy of the transactions. The whole process takes about five seconds. This is a huge advantage because this allows users to remain anonymous while also allowing the network to easily identify and weed out suspicious users.
Useful to Bitcoin Users
The XRP coin can actually work alongside Bitcoin. Bitcoin users can use XRP to make transactions with people who use currencies other than Bitcoin. Because the transaction times are faster, it is usually easier to convert Bitcoin into XRP and use the coins as an intermediate. This, in turn, makes Bitcoin more useful as a payment system than it otherwise would be.
Even though XRP had a slow start in 2018, the price of the coin has already started to improve. The network is not only popular but extremely well-built, so it is difficult to imagine XRP being one of those cryptocurrencies that unexpectedly fizzles out. Rather, the Ripple network has the attention of investors all around the globe and has already started to leave a mark in the media and popular culture.