Of all the crypto currencies that have attracted legions of small investors and supporters in 2018, it is Ripple XRP that has stood out. There are now countless Youtube channels that have come out in support of XRP, despite the value of the coin falling from an all time high of $3.39 down to $0.25 between January and September of 2018 when it finally began to rally.
If you don’t know about XRP already, chances are you don’t really understand crypto currencies much at all and you are now trying to research the field before jumping on the bandwagon. If so, then don’t worry as over 99% of the world’s population doesn’t have much of a clue either and that includes most small investors. So what is XRP and is it a safe investment?
Ripple is a real-time gross settlement system, currency exchange and remittance network. Based on a shared public ledger, it allows for payments, exchanges and remittance in a distributed process. The ledger employs the decentralized native crypto currency known as XRP, which has one of the highest market caps of any digital currency.
Did we lose you there? That sort of language makes most reasonable people suddenly become fascinated with their own fingernails while pursing their lips and nodding slowly. Don’t worry, as we will be avoiding these sorts of unfathomable terms for the remainder of this article.
A famous comic once described crypto currency as “Everything you don’t understand about money combined with everything you don’t understand about computers” and that just about sums it up as far as most healthy and balanced individuals are concerned.
Some crypto currencies can be ‘mined’. This involves high-powered computers performing calculations that take a long time and a huge amount of electrical energy. Often, the current price of the coin is actually less than the cost of mining it. When this situation is reached, the miners stop mining and wait for better days.
XRP cannot be mined. When it was launched in 2012, 100 billion units were basically just made up by Ripple. Some were offered for sale and some were kept by the company. The initial value of XRP was about $0.0002 per coin. Needless to say, those who spent even a relatively small amount of money on XRP back then are now already very rich or are soon expecting to be. However, it isn’t worth anything until you actually sell it. As a company, Ripple is awash with cash. The value of the coins they kept back runs to many billions of dollars. Of course, if they decided to cash in the whole lot at once, the price of the asset would crash long before they sold the last of it off.
Ripple has spent the last few years cosying up to the big banks and financial institutions. It has set itself up as the establishment currency and wants to offer XRP (and its xRapid system) as a replacement for the aging SWIFT money transfer process that the banks have relied upon for decades. Transferring money with XRP should be an instant process, with virtually no fees incurred.
SWIFT is slow and expensive. XRP is fast and cheap. it looks increasingly likely that the banks are going to play ball, although don’t expect this to all take place without a fight. This is a trillion dollar industry and vested interests will surely try to block the move at every term. Any mass switch is likely to take time and no doubt plenty of lawyers and accountants are going to get even richer.
Hopefully you now have a slightly better understanding of what XRP basically is, but is it a safe investment? The answer to that is emphatically…
…and that goes for all digital assets. How can they be safe, when their value is based on just thin air and what people want to pay for them? There are plenty of crypto currency investors who don’t even believe in the concept. They are more than willing to gamble though, as the potential jackpot is so high. If you don’t like gambling then don’t enter the crypto market, as it is basically another huge online casino.
Let’s take a look at some of the things XRP has going in it’s favor, in comparison to other coins.
1. It looks like it’s actually going to have a purpose.
Ripple appear to have a clear objective, with XRP. They want it to be used by the major banks as a digital asset, to make money transfers faster and cheaper. The vast majority of coins don’t seem to have any point, whatsoever.
2. The team at Ripple actually seem to get some work done, during their day.
The company has already created partnerships with over 100 banks and more or being added every week. Barely a day passes without another positive story about Ripple, although it has been frustrating for investors that good news throughout 2018 has not led to the price of the coin going up really yet. We have no idea how the staff at most coins fill their day and they appear to be making virtually no progress with building their businesses. Perhaps these people just play Angry Birds during office hours and just wait for the next bull run? The crypto industry is so crazy that this may be all they need to do to become rich, anyway.
3. Their staff actually have careers.
Everybody in senior positions at the company has significant experience with one or more blue-chip companies and in important roles. These are sharp-elbowed go-getters while many other coins were launched by groups of friends who had previously just found ways to make money online. Their typical backgrounds are affiliate marketing, day traders, or pro gamers. Others are just straight out of college. Very few know how to even approach large companies, let alone negotiate with them. This is definitely not the case, with Ripple’s personnel.
4. Ripple is being embraced by ‘the great and the good’.
Bill Clinton is certainly a figure that polarizes opinions, but it was certainly a coup to get the former US president to give a keynote address at their 2018 Swell conference. Others in attendance will include Eva Kaila ( Chair of the European Parliament’s Science and Technology Options Assessment body), Mohsen Alzahrani (Head of Innovation, Saudi Arabian Monetary Authority), Ben Lawsky (Former Superintendent of Financial Services for New York, Chief of Staff for Governor Andrew Cuomo, Co-chair of Governor Cuomo’s Cyber Security Task Force, Assistant United States Attorney for the Southern District of New York, and Chief Counsel to Senator Charles Schumer) and Ross Leckow (Deputy General Counsel, IMF). Whether you regard these individuals as being some of the world’s best minds, or just swamp-residing globalists, the fact that they are taking Ripple seriously means that the company has become a major player.
5. It’s probably the only coin you know anything about, other than Bitcoin.
There are now over 2000 different crypto currencies, the least established of which have circulating supplies of under $500. The vast majority of these assets are likely to go to zero, when it all shakes down. A few coins seem likely to become household names, over the coming months though. By the final week of September 2018, XRP had a market cap of over $20 billion. If your investment proves to be worthless, which it may of course, you will at least be in good company with regards to fellow investors who want a shoulder to cry on.
Hopefully this gives you a slightly better idea of what Ripple XRP is about. We are not financial advisers and we have made clear in this piece that anyone buying the coin is taking a punt. Do not invest more than you can afford to write-off and always remain aware that you really could lose it all at any time.
You can buy XRP and store it online using sites like Binance and BitPanda. It is true that these exchanges could be hacked and your holdings stolen, but storing the coins on your own device (an option) arguably leaves you far more vulnerable to attack. Most major exchanges have now beefed up their security and successful attacks are very rare. When they do occur, the exchanges tend to make good any customer losses out of their own pockets anyway although don’t just assume that this will always be the case.
Good luck and prepare yourself for a wild ride!