Ripple (XRP) price predictions are extremely difficult to make, due to the unpredictable nature of the cryptocurrency niche. But this embryonic altcoin has already established itself as one of the top cryptocurrency solutions, with many believing that its value will escalate rapidly in the near future.
Ripple effect
Those who have made positive Ripple (XRP) price predictions have already been rewarded, as the cryptocurrency has increased massively in value over the last few weeks. Reaching a peak in excess of $3, the potential of Ripple seems to be absolutely massive, yet its slide since then has also underlined its volatility, and that of cryptocurrencies in general.
Ripple markets itself as using blockchain technology to build the payment system of the future, and has targeted the financial system in the developed world in particular. The market capitalization of Ripple has already increased by an incredible 70 percent in a short period of time, ensuring that Chris Larsen, Ripple’s cofounder, has become staggeringly wealthy.
Difficult prospect
Yet Ripple (XRP) price predictions remain fraught with difficulty. It is easy to think that Ripple will just massively increase in value, as this was previously the case with Bitcoin, but this is not necessarily the case. Ripple works fundamentally different to Bitcoin, not being reliant on a network of miners running code in order to validate transactions.
All 100 billion units of Ripple have already been released back in 2012, with it founders keeping 20 billion and distributing the rest to the company. Ripple has since methodically distributed tokens to clients of the company, but still holds around 50 billion in an escrow account.
Additionally, Ripple takes a completely different approach to Bitcoin by utilizing a novel consensus algorithm in order to validate transactions, requiring computers to identify themselves and obtain permission to participate in the network of the currency. Bitcoin simply allows any computer to join its mining process, and this can be considered more democratic and libertarian in nature.
What the difference ultimately boils down to is a larger measure of control over the inner workings of Ripple, leading many observers of the cryptocurrency niche to suggest that it is not truly decentralized. But the payment solution is not actually intended to be a direct rival to Bitcoin, and is instead intended to be something of a bridge currency that will be attractive to financial institutions.
Upward direction
If the founders of the altcoin can achieve this then Ripple (XRP) price predictions will definitely head in an upward direction. It is hoped that Ripple can be utilized in order to settle cross-border payments faster and more cheaply than is the case at present. Although Bitcoin can be used for this purpose, Ripple is able to deliver 1,000 transactions every second, which blows Bitcoin and Ethereum out of the water.
Furthermore, transaction fees associated with Ripple are much lower than Bitcoin, and it is these factors which some believe will lead to the value of Ripple increasing exponentially in the next few years. The company already claims that one hundred financial institutions are utilizing its technology, with sixty one banks in Japan and two in South Korea having formed a coalition to launch a new Ripple pilot.
This is interesting news considering the antipathy towards Bitcoin in East Asia. Both China and South Korea have passed legislation in recent months targeting the market-leading cryptocurrency, whereas it seems that the attitude towards Ripple is far more convivial.
Key tweet
Last week, Brad Garlinghouse, the company’s CEO, tweeted that banks and payment providers are “indeed planning to use (XRP) in a serious way,” although there are still doubts whether or not this will really be achieved. Widespread adoption of the currency may not ever occur, and this has been reflected in $100 billion of market capitalization being wiped from Ripple in the last few days.
It is this sort of activity, and the general volatility of the cryptocurrency niche, which makes Ripple (XRP) price predictions so difficult. There is no doubt that Ripple has declined significantly in recent trading, yet many remain optimistic about the potential of the currency to play a significant role in cross-border payments.
Moneygram is set to test the water with Ripple by utilizing the crypto platform to see to see if it can be used to move funds in a faster and more efficient way than is the case traditionally. If this test is successful, it seems certain that Ripple will begin to at least play a role in the mainstream currency market. This would be extremely bullish for the value of the cryptocurrency, and could lead to a bitcoin-like valuation in the coming years.
Financial backing
With major players in the financial world having already signed up to Ripple, there is no doubt that this cryptocurrency has huge potential. UBS and Santander are already utilizing Ripple’s products in order to enable payments, and big names such as these in the banking industry endorsing Ripple will undoubtedly make people sit up and pay attention.
Elsewhere, American Express has also launched an instant blockchain-based payment system using Ripple, indicating that the cryptocurrency is making some significant allies in the financial world.
Whether that is enough for Ripple (XRP) price predictions to be bullish is debatable. The fact is that the cryptocurrency doesn’t possess the characteristics which has led to Bitcoin becoming such an overwhelming success story. However, it does seem that the ethos of Ripple is particularly well-founded, and that this has been recognized by some big names in the financial world.
This does suggest that Ripple is here to stay, and that its $2 value may look extremely miniscule at some point in the future.
