Ripple and The XRP Effect

In recent times, the company Ripple and its crypto-token XRP have been spread far and wide across the monstrous void that is the internet. Via social media sites, YouTube videos, blogs, news headlines, and more XRP as almost become a household name. As a result of this widespread growth in popularity, masses of people have become obsessed with “Ripple” and want to know “how to purchase XRP” and “what the price of XRP amount to by year’s end”. With so much being said and so many people interested it is highly beneficial to inform the general public on what Ripple actually is and the precise function of XRP.

To begin with, Ripple is a global company based in San Francisco that creates software solutions to provide near-instant cross-border transaction payment and settlement services at a fraction of the cost of traditional services. To do this, ripple utilizes blockchain technology and the digital asset XRP. Essentially, Ripple helps companies move money around the world at lightning speed while being highly cost-effective.

Your first thought probably is, “what on earth makes this so exciting and perhaps even profitable?”. Here it is…. For the past approximately 40 years, the entire global financial marketplace has relied on one company to facilitate all trade services to almost every country and every bank in the world. SWIFT (Society for Worldwide Interbank Financial Telecommunications) is that company. The problem is SWIFT quite slow and very costly. To sum up, SWIFT is Slow and costly to the customer and slow and costly to the banks. Their solution was developed in the seventies and for the most part remained in the seventies in terms of technology, speed, and cost.

The SWIFT method typically takes three to five days to facilitate a transaction and is based on financial organizations, having funds at both the sending and receiving ends of each transaction. For example, if one had a friend in Brazil and wanted to send $1000 to them today, not only would it take three or more days to “settle” the transaction in Brazil but it would also require a hefty service fee for doing so. On top of that, for every transaction sent, it would need to be covered at both ends with the $1000. So, in the SWIFT system, it actually takes $2000 tied up for three to five days to transfer $1000. For the hundreds of individuals transferring millions of dollars, it would literally cost tens of thousands of dollars in fees just to facilitate.

Enter the Ripple economy. Utilizing blockchain technology Ripple Labs have developed a suite of products that will allow the transfer of funds on a global scale almost instantly. Not only are the Ripple solutions extremely fast, but the deeper organizations dive into the Ripple product, the greater the cost savings for both the individual customers as well as the financial organizations providing the services; Giving an incentive for mass adoption. At its most productive level, the Ripple product set can save over sixty percent of traditional transaction fees which have been estimated to cost 1.5 Trillion dollars globally for the last fiscal financial year.

Now, how exactly does XRP fit into things? As aforementioned XRP is in the form of a cryptocurrency, however, that is not entirely accurate. In the broad spectrum of the crypto-market, most view XRP as one of over a thousand “cryptocurrencies”. Especially since XRP, Bitcoin, Ethereum, Litecoin, EOS, IOTA, Tron are all coins listed in the top twenty of best-performing coins of which XRP which is currently the third most valued. As opposed to being called a cryptocurrency, CEO, and Co-founder of Ripple Labs, Brad Garlinghouse describes XRP as a ‘digital asset’. By definition, a currency simply is a medium of exchange. While all the coins mentioned here do hold value, it has proven increasingly challenging at this point to be a means of exchanging value, after all, who wants to spend their crypto today when it could be worth ten times more tomorrow?

XRP is the exclusive asset which Ripple utilizes in its xRapid product to send and settle currencies on a global scale. When a financial organization utilizes Ripple’s xRapid product with XRP implemented it provides the fastest, most secure (using blockchain technology), and cost-effective means of moving funds from country to country.

Still wondering what makes Ripple so exciting? Here we go! The global currency transfer market is reported to be over seven trillion United States Dollars a day. That’s a 7, followed by twelve zeros! 7,000,000,000,000. There are less than forty billion XRP “coins” currently in circulation and a total of only one hundred billion in existence. Currently, XRP is trading at less than one USD. If Ripple is successful in capturing the cross-border market, the price of XRP would increase significantly.

While not utmostly the most reliable way of determining the value of Ripple (XRP); The straight math of seven trillion divided by one hundred billion gives XRP an individual price of $70 USD. Suffice to say that is worth getting a little excited about! When you take into consideration all the XRP owners hoarding the asset as a store of value and the fact that a small percentage of XRP is lost with every transaction as well as the one sent to digital oblivion by the occasional accident, the actual number of XRP available would be considerably less than a hundred billion.

One should also realize that with the advent of most technologies when something is made easy to adopt, it becomes used more. When Ripple is successful, the seven trillion dollar market will more than likely grow exponentially, as more people and organizations take advantage of the ability to move funds cheaply and easily around the world for any number of reasons. With XRP, the possibilities are quite literally endless. Do not be swayed by the price of XRP in the next two, three, or even six months, HODL and don’t waiver. Moreover, do be hopeful and have faith in the power of Ripple and The XRP effect.

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