Recent months have seen substantial increases in altcoin adoption and market cap, and as of late Ripple has emerged as a solid challenger to Bitcoin’s hegemony in the crypto space. Led by a team of experts from across the business and tech worlds, it has seen growth that is unprecedented among cryptocurrencies. As crypto and blockchain technology rapidly become mainstream, it is reasonable to assume that Ripple is in a position to become a household name. Nevertheless, questions still remain as to the extent to which Ripple can achieve this goal.
During a year that saw many altcoin values rise to stratospheric levels, Ripple was the clear winner in 2017. Between January and December it gained a whopping thirty-seven thousand percent in fiat value, the highest of any crypto by far. Of equal importance, the Ripple team forged partnerships with dozens of banks across the globe, which together transfer trillions of dollars in assets per year. Entering January, mainstream media was covering Ripple almost as much as Bitcoin, and many believed that it would soon become the new flagship cryptocurrency.
Ripple’s unique status in the crypto space, and its designed technology, has served as both an asset and a shortcoming. To the uninitiated, Ripple appears to be just another cryptocurrency, but it is much different. Most notably, it is controlled by a privately held corporation, Ripple Labs, which holds the bulk of the XRP coin. As such, the Ripple team has been quite successful at forging the relationships with financial institutions that are so crucial to its success. The fact that a private company controls the coin has, however, drawn the ire of many crypto purists who assert that it keeps the coin centralized, and under the thumb of a for-profit entity.
To the Ripple team, maintaining this quasi-centralized nature is crucial to its future. It is certainly in their best interest to keep the value of XRP high, and thus there is little danger of the coin being manipulated to the detriment of its holders. In fact, the Ripple code is open source and, like Bitcoin, the number of XRP cannot be changed. To be sure, many holders of Ripple are comfortable with the fact that Ripple Labs will prevent the discord and internal struggles that have plagued other platforms.
It is also worth noting that Ripple Labs has never advocated the use of XRP as a common cryptocurrency. Rather, it plans for the platform to be used as a payment network for banks and other financial institutions. In that regard, there is no doubt that Ripple works extremely well. Most experts agree that its ultra-fast protocol is far superior to current centralized banking systems, such as the Swift Network. It is without question a perfect example of blockchain’s revolutionary potential. Nevertheless, Ripple’s team intends for it to complement, rather than replace, centralized fiat currencies. In fact, Ripple Labs CEO Brad Garlinghouse has stated that he does not expect cryptocurrency to replace fiat any time soon.
Moving forward, Ripple is no doubt in a very strong position, but hurdles still remain. For example, banks could adopt any number of competing cryptos for their purposes. In fact, once implemented, the Lightning Network will make Bitcoin as fast and efficient, if not more so, than Ripple. It is also possible that governments will seek to regulate how banks conduct blockchain transactions, which could easily interfere with Ripple’s goal of becoming the standard platform. In fact, the very crypto revolution is a potential challenge to Ripple’s business plan, as fiat could very well be replaced at some point.
It is also worth noting that Ripple’s fiat market cap has declined substantially since its high in mid-December, and like every other crypto, volatility has been the norm. In fact, twice last year Ripple’s price rose quickly, only to fall back, leaving many investors with heavy losses. Nevertheless, unlike many other platforms, Ripple has an established track record of success beyond its chart price, and is poised for growth well beyond 2018.
It is now safe to consider Ripple at a turning point in the blockchain space. It is on the verge of breaking into the mainstream, and thus will need to demonstrate its usefulness as a unique product in the financial sphere. Success is far from guaranteed, but there is no doubt that it is in a very strong position. Thus, in a sense, Ripple is perhaps best viewed as more than a mere cryptocurrency, but as an example of how blockchain will soon change how the world works.
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