The Case For XRP

November 6, 2019

I’m an avid enthusiast & supporter of cryptocurrency and the underlying blockchain technology it runs on, and I’d like to share with you the case for XRP; my favoured digital asset.

I keep a portion of my wealth within my cryptocurrency portfolio, and for good reason. I’m anticipating explosive growth for a number of digital assets in the not-too-distant future. More on that in another post though, for this article we will be focusing on the case for XRP.

What is XRP?

XRP is a disruptive digital technology, created by the team at Ripple – a US based fintech firm who aim to reshape the global financial system. XRP is a digital asset capable of settling cross border payments in a matter of seconds with extremely low fees. It looks to play a huge role in reshaping the current international monetary system – replacing the current SWIFT system with a cheaper, faster & more efficient option.

It is a deflationary cryptocurrency asset limited to 100 billion units.

If you don’t know what SWIFT is, how international payments currently work, or how XRP can completely reshape the system, I’m about to explain.

What’s SWIFT?

SWIFT ‘Society for Worldwide Interbank Financial Telecommunication’ is the current system used by banks worldwide to settle international payments. The SWIFT system is slow & expensive, taking 3-5 days on average to settle an international transfer. Fees will be taken every step of the way, by your bank, and by handling banks.

The SWIFT system has been in use for years, originally introduced in 1970. Immediately this rings alarm bells… we are still using the same tech introduced 50 years ago?

How Ripple’s XRP is Fixing this Problem

Ripple’s main aim is to reshape the international transfer system by bringing in a bridge currency that allows for cheap, instantaneous international transfers without the need for a middle man. The bridge that allows them to achieve this is their digital asset – XRP.

The XRP token allows for fast, low cost transactions between currencies. The XRP technology allows banks, institutions & individuals to instantly transfer one currency into another, and send money anywhere in the world.

International transfers are running on old technology and an outdated system. Ripple’s XRP looks to completely revamp that system to provide seamless settlements across borders.

Here’s an example:

If you are based in the UK and want to send £1,000 to your friend in Mexico, converted into Mexican pesos, a bank would traditionally use the SWIFT system. This transfer would take 3-5 days to complete, and your fees could run high.

If you did this very same international transfer using a bank that uses Ripple’s On Demand Liquidity, the transaction could be settled in 3-4 seconds at a fraction of the cost of SWIFT (40-60% savings).

On Demand Liquidity

Throughout 2017 & 2018, the Ripple team were working on a number of projects, but this year they dropped multiple projects to focus on their core: On Demand Liquidity.

Ripple’s ‘On Demand Liquidity’ refers to the use of XRP as a bridge currency, putting the XRP digital asset right at the front of Ripple’s entire operation.

So what we have here is a digital asset that can bridge two currencies in three seconds, providing seamless, instant international transfers and outdating the current SWIFT monetary system.

Is it All Just a Dream?

By this point you’ll understand the core use and goals off Ripple and the XRP token, but you may be thinking that Ripple’s goal to reshape the financial system is farfetched, but they’ve been making huge moves, and could have achieved far more than you might be aware of.

Ripple have partnered with over 200 banks & financial institutions, and are constantly in talks setting up partnerships and spreading adoption of the XRP technology. Some of the most notable partnerships so far include the central bank of Saudi Arabia, MoneyGram, Finastra, Western Union, Santander, SBI holdings, Bank of Thailand, Royal Bank of Canada, Barclays and PNC bank.

You can clearly see from that list that Ripple’s XRP is really being adopted, by big names in the financial world. It is not just a dream by a crypto dev team, Ripple is making serious moves with some of the biggest banks and financial institutions in the world.

Utility First

Ripple’s XRP is a utility token with a strong & valid use case. While the value of XRP ($0.30 at time of writing) may be low right now compared to other digital assets like Bitcoin ($9,250), and Ethereum ($180), it is utility that will win in the long run.

This utility, and the adoption being achieved by the Ripple team, makes XRP a strong investment opportunity for myself.

XRP as an Investment

So, how is XRP good as an investment?

The obvious first sign is the utility that XRP brings to the real world. When you compare this side by side to proof of work coins like Bitcoin & Litecoin, it blows them out the water with the technology & use case. This puts XRP ahead of many other tokens over the longer term.

One of the major things that make XRP a great investment is the sheer level of adoption that Ripple have achieved for their digital asset. While many crypto teams have achieved very little over the past few years, Ripple is ever pushing for adoption and building new partnerships with banks & high-status financial firms. This adoption shows that Ripple is here to stay.

Ripple dropped many of their projects to focus solely on ‘On Demand Liquidity’, their international remittance system running on XRP. This puts XRP at the limelight of all their efforts.

The Need For a Rise

Not only would investors of the cryptocurrency like price to increase for obviously reasons, there is a genuine need for a rise in price for the XRP digital asset.

One of the leading creators of the XRP token, David Schwartz explains:

In these tweets, David Schwartz states that a lower cost XRP token makes for more expensive transactions. On top of this, the volatility produced by a large transaction taking on the XRP ledger place would be enough to move the market; making regular use of the XRP asset at a low price unsafe.

Financial institutions & banks will be moving millions, billions if not trillions of dollars internationally using XRP when it is fully onboarded globally, and carrying out these transactions while XRP price is sub $1 would be impossible. There are only 100 Billion XRP tokens ever to exist, so you can see where this is going…

Every year over 1.25 Quadrillion dollar’s worth of international payments are settled through the SWIFT network, with hundreds of trillions sent internationally through other sources.

If Ripple’s XRP at $1 was used to settle even one eighth of SWIFT’s international payments, assuming banks & finance firms held all XRP in existence, there still wouldn’t even be enough XRP to handle the annual volume. This just goes to show how important a price rise for XRP will be, it is inevitable to the success of XRP. With the huge partner in the financial world who are adopting & testing XRP, it seems only a matter of time before the daily XRP transaction volume exceeds the current cost & quantity of XRP – forcing an inevitable rise in price.

XRP is in its infancy stage right now – the price sits at $0.30 at time of writing. The highest price XRP has seen is just over $3, and that came through with absolutely no fundamental backing – imagine the possibilities as Ripple build adoption for their digital asset.

To Conclude

So there we go, the case for XRP.  There is SO much more to be told but I don’t want to make this article unbearably long. I will continue to bring coverage on XRP – In my opinion the most promising digital asset of current times.

For now, I recommend you take what you have learned here & develop on it by doing your own research. At the end of the day, no one should be making personal financial decisions but yourself. The XRP digital asset has a very bright future, and it would be a shame for you to miss out.

With XRP price currently sitting around the $0.30 mark, the risk is tiny, and the potential gain is absolutely insane. A price rise even back to previous all-time highs provides a 1100% ROI, and that includes no additional growth.

As always, do your own research and invest safe. Only buy your XRP from a trusted exchange and only store your digital assets in a hardware wallet.

Until next time!

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