Is Ripple a Good Investment?

We all are aware of cryptocurrencies and their emergence since the 2008 subprime crisis. There are so many different kinds of cryptocurrencies that came to life since the introduction of Bitcoin. Now, we even have an Ethereum platform that enables you to build applications using blockchain technology. Beyond a point it may seem like nothing can top the invention of Ethereum until we come across Ripple. What makes Ripple any different from other crypto inventions? Let us find out is Ripple a good investment or not. 

What is Ripple?

Ripple is a blockchain-based digital payment system with its own currency, the XPR tokens. XPR facilitates FX conversion between several currencies in a timely manner. Jed McCaleb and Chris Larsen launched the company in 2012.

Ripple began as a peer-to-peer network that promoted itself through social media. Yet, the network had failed to achieve its goal beyond a certain point. The well-known crypto coin XPR, created by Ripple, was also launched in 2012, with the founders donating about 80 billion XPR.

How does Ripple work?

Unlike Bitcoin, which uses a Proof-of-Work (PoW) network, and Nxt, which uses a Proof-of-Stake (PoS) network, Ripple uses a consensus protocol to ensure that the accounts and transaction histories recorded in the system are valid. As a result, the consensus ensures network integrity and prevents double-spending in the system.

If a person tries to initiate a single transaction on numerous gateways but sends the same amount of $500 utilizing the gateway system, his first transaction will be rejected. The dispersed nodes will choose the first transaction and send a quick confirmation within five seconds.

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Advantages & Disadvantages of Ripple Investment

Ripple Investment Advantages Ripple Investment Disadvantages
More Than a Cryptocurrency No New Ripples
Cheap Investment Concentrated Stake in Few Hands
Affiliations & CBDCs Strong Peer Competition
Recovery from SEC fiasco SEC Case is Work-in-Progress

Ripple Investment Advantages

  • More than just a digital money

Ripple isn’t just another cryptocurrency that’s readily available. Ripple is a cryptocurrency and blockchain technology that is unlike any other. It is a functioning business. Ripple Labs employs about 500 full-time staff, including public relations managers and marketing experts that promote their blockchain-based platform to investors, banks, and even new consumers.

  • Cheap Investment

Ripple is presently selling around $0.57 per coin, which is a bargain in comparison to its prior high of $3.10 in 2018. The lower valuation also means that for a few hundred dollars, you may get a significant investment in Ripple. Numerous analysts have given Ripple a optimistic prognosis, which has boosted investor confidence. Ripple is the fourth-largest cryptocurrency in the world, with a market capitalization of $60 billion.

  • Affiliations & CBDCs 

Many financial institutions have partnered with Ripple because they prefer the platform’s superior blockchain technology to Bitcoin. By implementing Ripple’s Ripple Payment Protocol, a real-time gross settlement method for currency exchange, a German bank called Fidor became a key financial partner with Ripple in 2014.

In the subsequent years, Ripple has become partners with the likes of MoneyGram, American Express, Santander, etc. which are large institutions. In early 2021, Ripple also announced that they are trying to create a CBDC(central bank digital currency) private ledger based on the technology that is used by XRP Public Ledger. This could be more reliable and cost-effective to carry transactions in the future. 

  • Recovering from the SEC fiasco

The SEC sued Ripple in 2020, alleging that the company illegally traded XPR tokens worth $1.3 billion. The SEC contends that the company marketed securities instead of crypto coins. Yet, the SEC case against Ripple, which mostly sells crypto tokens, is quite weak, and as a result, there is unshakeable optimism that Ripple will win the lawsuit against the SEC. Even the Ripple values, which had plummeted to new lows as a result of the SEC debacle, have subsequently recovered.

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Ripple Investment Disadvantages

  • No New Ripples

Bitcoin has a limit of 21 million coins, whereas Ethereum allows for unlimited mining. However, all production processes will inevitably slow down in the future. Yet, in the instance of Ripple, XRP tokens were already in circulation following the pre-mining procedure.

  • Stake Concentrated in a Few Hands

Ripple Chairman Chris Larsen holds over 75% of the whole XRP cryptocurrency, while Ripple CEO Brad Garlinghouse owns a large fraction. Even the company’s board of directors owns Ripple tokens. Because to the concentration of XRP holdings in a few hands, the price may remain inflated above usual levels.

  • Strong Peer Competition

SWIFT is one of the largest payment networks among international participants, and it has been putting Ripple under pressure. Almost 11,000 financial institutions prefer SWIFT to Ripple as a payment method. As a result, it may take some time for the company to persuade banking players to embrace its platform, which provides a speedier and more reliable payment option than its competitors.

  • The SEC case is still being worked on.

Ripple may have recovered from the SEC’s brief shock, but the ongoing lawsuit could pose yet another hurdle on the way to success for the cryptocurrency. To exert pressure on Ripple, the SEC may utilize unfair tactics. In the Ripples case, the SEC had previously broken certain federal standards by obtaining material from overseas. As a result, Ripple has yet to win its court case against the SEC.

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Final Note: Is Ripple a Good Investment?

Ripple is a one-of-a-kind cross-border payment system that is unlike any of the mainstream cryptocurrencies. Ripple’s blockchain technology has been adopted by approximately 200 financial institutions in 2019. RippleNet is a network of over 300 provider networks that leverages advanced blockchain technology in 40 countries across six continents. Ripple is a excellent investment for your portfolio because of its expanding popularity, tremendous technological innovation, and low risk profile.

Frequently Asked Questions: Is Ripple a Good Investment?

Can XRP Price reach $10?

Yeah, the XRP price per token might approach $10 in the medium term.

How is Ripple different from Bitcoin?

Bitcoin is a digital currency, whereas Ripple is a payment system.

How much will XRP be worth in 2025?

In the medium term, XRP might reach $10 per token, or perhaps higher.

Do any banks use XRP?

The XRP tokens have not been used by any American banks.

Who has a majority stake in Ripple?

Chris Larsen, the chairman of Ripple, owns the majority of the company, followed by CEO Brad Garlinghouse.

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