It wouldn’t be a surprise if you heard the word Bitcoin circulating around at work or home whether it be through media or word of mouth.
Bitcoin’s genesis comes from the 2008 financial crisis as a backlash against institutions and the powers that be with finance. Frustrated with the banks being bailed out instead of the people, a group of programmers develop Bitcoin as an alternative. The identity of the programmers are somewhat mysterious but the credit goes to someone with the alias Satoshi Nakamoto, who could be one person or a group of people.
Odds are you probably heard of the term cryptocurrency thrown around as well. Cryptocurrency is a form of digital money that is transported through the internet. Bitcoin was the first decentralized cryptocurrency.
Bitcoin doesn’t depend on a centralized bank or a government’s fiat supply. The fiat supply is physical money, like US dollars, over which banks and the Federal Reserve have control. Therefore people can send money via person to person globally without using a third party. When there is a third party involved, there will always be fees or interest rates–which is how these parties stay in business.
All these reasons given are why Bitcoin and other cryptocurrencies are going through a process of global acceptance and adoption. Of course the market is volatile for crypto currencies right now since they have only been around for a few years. The only thing is, you’ll regret waiting for them to become mainstream and stable. Taking advantage of the volatility in the market now is key to giant returns.
It gets better!
Bitcoin is not the only cryptocurrency out there. In fact, there are over 1600 cryptocurrencies. The nickname for these other cryptocurrencies are called “alt coins.” Of course not all of them will succeed. Many have become obsolete or will become obsolete in the near future. But it’s some of these “alt coins” that are exciting because of their potential.
XRP
One of these “alt coins” is a sleeping monster called XRP. XRP is a super efficient cryptocurrency developed by the company Ripple. It actually has its origins back in 2004. At that time, Jed McCaleb came up with the idea of Ripple. With the help of the brilliant minds of Arthur Brito and David Schwartz, the basic code for XRP was created. In 2005, they got help from Ryan Fugger that had a system called ‘open coin’ which transformed the project into Ripple. In 2012, the seasoned tech executive Chris Larsen joined as the first CEO of Ripple.
Under his supervision, traction really started in 2013. Ripple set out to recruit as many global banks as they could partner with. In 2015, former vice president of Yahoo!, Brad Garlinghouse, became the new CEO of Ripple. Partnerships ranging from angel investors, payment providers, banks, the International Money Fund (IMF), and digital asset exchanges have been forged. Ripple now has over 200 partners, and chances are you’ve heard of at least some of them. To name a few are American Express, MoneyGram, HSBC, Bank of America, and Google. Bank of America came out recently with a patent to use Ripples inter ledger protocol, which is a good use case for XRP.
So why are so many institutions partnering with Ripple? Well, it just comes down to simple math.
Western Union takes three days to transfer money takes while Ripple only takes three seconds.
XRP is in a league of its own. No other currency, main stream or crpyo offers this level of convenience or keeps up with the pace of today’s business needs. The financial incentives behind adopting this system are too strong to pass up for the leaders in finance. There will be increasing pressure on institutions that haven’t joined Ripple because they will lose their competitive edge.
What do these partnerships with major financial institutions mean in terms of XRP’s value?
Up.
All these institutions are in the testing stages and they haven’t actually gone live with Ripple – yet. But once it does go live, the fireworks will start. Just about 5 trillion dollars a day is transferred between banks internationally. If XRP is used in facilitating those exchanges of trillions of dollars, the market capitalization will include all those trillions and the value of the XRP token will jump to about 120 USD.
Currently, the XRP token is trading at 32 cents. Therefore, the value of XRP would multiply over 350 times its current value. It’s uncertain whether all this will happen over a year or four years, but you certainly don’t want to be on the outside looking in when it does.
There will always be innovation with new startups and their new cryptocurrencies. But as of now, Ripple already has its foot in the door with establishments and holds all the cards when it comes to system adoption.
When discussing the potential of Ripple with my former economics professor, Jared Barton from Channel Islands, he decided to do his own research. Two days later I got an email.
“I am seriously considering asking my spouse if she’d like to put a couple grand in it, just to see,” he said.