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XRP – Ripple

My thoughts around the rise (and potential fall) of XRP. Jan 4th 2018

  • “Ripple’s gonna triple” – Einstein 1940… (maybe)
  • “RIP(ple)” – Tupac Shakur 1993… (potentially… he had a lot of songs)

Everywhere you look, people are excited about cryptocurrencies and for good reason. Traders are making 10s, 100s, 1000s % profit on the back of these meteoric rises in the last few months. I thought I would join the cast of thousands and put down my thoughts.

Full disclosure: I own some positions in XRP on my eToro account

What is the difference between XRP (the cryptocurrency Ripples) and Ripple (the company)?

XRP is the native currency of the Ripple network that only exists within the Ripple system. It can be divisible to 6 decimal places – so 0.000001

100 Billion (with a B) were created at the inception, so there are a few floating around. Ripple the company has about 50-60% of these in escrow at the moment. Escrow means a financial instrument held by a third party on behalf of the other two parties in a transaction.

Ripple the company, is the creator and a developer of the Ripple payment protocol and exchange network.

Now to add to the confusion – Ripple (the payment protocol) is a centralized real-time gross settlement system (RTGS – essential a funds transfer system), currency exchange and remittance network by the company Ripple. Easy to follow, right?

Banks don’t actually need to use XRP to utilise Ripple protocol – but Ripple have developed it in such a way that it greatly reduces time and cost if you do.

What do I think of XRP/Ripple/Ripple payment system?

I love cryptocurrencies – I think they are the future… do I think the cryptos out now are the ones that we are going to use 2-3-4 years down the track…? Not so much. People are not using cryptocurrencies for what they actually are… a currency. It makes the news when someone buys a beer with bitcoin. People are not using it as a currency. Maybe Bitcoin but pretty sure they are still doing massive amounts of Black Market stuff with that.

“XRP exists natively within the Ripple protocol as a counterparty-free currency, as Bitcoin does on the Blockchain. Because XRP is an asset, as opposed to a redeemable balance, it does not require that users trust any specific financial institution to trade or exchange it. All other currencies on Ripple do require some amount of trust, as they each have an issuer, from whom that currency can be redeemed (this includes BTC on the Ripple network).”

Ripple Protocol

Also note that things like Bitcoin use the blockchain, whilst XRP uses their own payment protocol. As I mentioned above – you don’t need XRP to use the Ripple protocol, it certainly does have greater benefits if you do, but it’s not necessary.

I know i have invested about 15% (as of 04 Jan 2018) of my portfolio in cryptos but I highly doubt they will still be there come March/April 2018… unless they quintuple in value. My trading style is more geared to stocks.

I believe two things are going to happen to XRP over the coming months.

  1. Its way over due for a massive correction (30-45% correction)
  2. It’ll be added to Coinbase and the price will jump exponentially (similar to Bitcoin Cash). XRP is too big for Coinbase to ignore now and at a price of $3 (currently) its way more accessible to the people. Coinbase needs XRP to continue its growth and XRP need Coinbase to sustain its rise.

These things might happen sequentially – XRP might join Coinbase, jump up in price, then plummet back down. They might not happy at all – I’m not a professional nor do I claim to be.

More than likely I’ll close my XRP positions (or at least half) after when/if it gets announced on Coinbase – take the profit and invest elsewhere. I’m not going to be investing any new positions in XRP and that’s just my personal view.

Is it sustainable?

I don’t believe something with this type of volatility and sudden surge in price is sustainable and has the longevity to last at this current rate – happy to be proven wrong though.

So whilst there is still some life in the old girl for now, i don’t think this particular one in this particular environment, will last.

What do you think?

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