HomeRipple as an Upgrade to Banking NetworksRipple price recovery momentumRIPPLE XRP WILL REACH $5 IN 2018Ripple as an Upgrade to Banking Networks
mir khaleq ali22:49Ripple as an Upgrade to Banking Networks,Ripple price recovery momentum,RIPPLE XRP WILL REACH $5 IN 2018
Ripple as an Upgrade to Banking Networks
Easily rocketing into the top ten cryptocurrencies by market cap, Ripple is striking out against the archaic banking networks. The protocol was conceived as a solution for the slow backend that plagues financial institutions across the globe. Their current spot as the number three cryptocurrency has them sitting at a market cap of almost $46 billion dollars. That’s roughly half of Ethereum and only a quarter of Bitcoin. Their increasingly widespread adoption by financial institutions gives them a very strong basis for growth, even with the relatively low per unit price of $1.18.
Unlike the cumbersome blockchain system that drives Bitcoin, Ripple depends on a distributed ledger that verifies transactions through consensus. This removes the need for a mining community and reduces the amount of electricity needed by the network. Instead, trusted validators must confirm the transactions in order to allow its processing. Once a certain amount of these trusted validators have formed a consensus, the transaction goes through.
Traditional banking networks have been around for decades. They existed before the Internet took the world by storm, and their speed shows it. Ripple is actively looking to replace that system, and they have already made great progress. Major financial institutions like Bank of America and Merrill Lynch have already signed on to the Global Payments Steering Group. This group is actively looking to adopt the Ripple payment protocol as their means for conducting transfers between banks.
These massive institutions work with market makers to form a completely distributed exchange, effectively linking all of the disparate companies into one common financial system. Previously, each bank would have a completely internal network system. These systems would rarely work with one another, and caused massive downtime in transfer operations. Often, the transfer would fail entirely for unknown reasons. Using the Ripple payment protocol, these transfers can take place in seconds. Giving users that kind of instant, verified liquidity would go a long way towards making the banking system more efficient.
The Value of a Bridge Currency
The ability to easily convert into the Ripple XRP currency to use the distributed ledger gives the system many advantages. First and foremost, it serves as a universal trading pair for foreign currency exchange. Where previously some of the less common currencies would have to actively find a trading partner, they can now buy directly into the Ripple ecosystem. That currency would then be available in the future when someone is looking to trade in the opposite direction. The two no longer need to be traded at the same time.
Even with major forex trading pairs, Ripple is easily the most cost-efficient option. The process costs a fraction of traditional foreign exchange services, due to the nature of XRP as a bridge currency. The protocol allows rapid conversion between fiat currencies, as hedge funds and larger institutions provide liquidity for the process. This helps not only forex based investment traders but also smaller scale remittances. Foreign workers can now easily convert their remittances back into their native currency. They can also transfer them quickly and safely to their home country through the Ripple network.
Ripple Poised to Explode
We’ve already seen Ripple reach $3.65 per coin in early January. Although the value has dropped back down, XRP is still sitting at almost five times their early December value. Bitcoin still has staying power as the blockchain progenitor and a reliable store of value. Ethereum still stands as the smart contract standard. However, it is Ripple that is seeing absolutely astounding adoption in the most critical industry to cryptocurrency – traditional financial institutions.
Major banks have shown a tremendous willingness to use the Ripple payment protocol for their own internal transfers and dealings with other banks. That alone gives XRP an avenue for major growth. When you also consider their commitment to further developments and solid, working product, there’s no doubt that Ripple will be a strong performer. The cryptocurrency’s low per unit price is particularly appealing to people looking for a major investment.
Their proven track record and historical highs help offset the relatively high market cap. We are still in the very early adoption phase for technologies like the Ripple payment protocol. Those that join in now will reap the rewards when Ripple becomes a universal bridge currency within financial institutions. As the total supply of XRP is fixed, the increased demand for this industrial use will force the price higher. When that happens, those holding XRP will find the currency selling at a high premium.
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Reviewed by mir khaleq ali on 22:49 Rating: 5
