Many digital currency investors are hunting for the next big altcoin, hoping to find a new Bitcoin for the right price. Ripple (XRP) is the best contender.
The coin is currently the most underrated currency in the top 4 crypto market currencies. Well, this is a very good reason why you should invest in XRP. This means that this currency has made a significant progress to be used in the real world, but it still has remained cheap.
5 Key Reasons You Should Invest in Ripple
1. Ripple’s expansion
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The core team that created Ripple is larger than life, each of them acts very real, without regard for their newfound fame in crypto. Ripple, which originated as a start-up, is famous for its high proportion of technical experts, architects, cryptographers, and developers.
The company is spreading its wing across continents such as China, Singapore, and India in order to facilitate instant global money transfers.
2. Ripple is a best friend to banks
Key Reasons You Should Invest in Ripple
Many devoted Bitcoin believers assert that the world’s first digital currency has the power to rebuild our financial system in mere years. And there is a chance of the banking system disappearing. However, the reality is different.
There is no doubt that digital currency is here to stay. But we are more likely to see it incorporated into our everyday financial lives through large players in the financial world: big banks. Dozens of banks have already adopted Ripple. This makes Ripple the first digital currency to be adopted by mainstream financial institutions. It’s only picking up momentum.
Why do banks want Ripple?
Currently, the bank saves $3.76 per payment if a bank is using Ripple. That is a cumulative saving of $564,000 a year. Ripple’s value proposition to banking clients is cheaper rates and faster transfer times for international payments.
Moreover, Ripple can exchange to fiat currency so that clients can send money across borders and with individuals using different banks.
3. Performance Versus Competition
Key Reasons You Should Invest in Ripple
Moving on to the third reason among they Key Reasons You Should Invest in Ripple, Ripple decentralization plays a big role.
According to the Ripple Product Manager Warren Paul Anderson, blockchains can choose two out of three architectural pillars: Security, Scalability, or Decentralization. They can’t have all three out of the starting gate. He explained that Ripple had emphasized security and scalability over decentralization, on the way to explaining XRP’s decentralization plain in greater depth.
He also stated that:
“By the end of 2018, Ripple will be fully decentralized; more decentralized than Bitcoin… We’ve hired some of the best minds in the business.”
Before XRP decentralization in 2018, let’s discuss speed and scalability which set XRP apart from competitors.
Speed
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Here, speed means how long it takes to settle transaction of cryptocurrencies. Usually, in the crypto-currency networks, the settlement happens when the transaction reversal nears zero. This happens usually for Bitcoin, it usually encompasses six confirmations which takes an hour or more.
For Ethereum, it encompasses fifteen confirmations and takes two or three minutes. But XRP, using the Ripple Consensus Algorithm, does it in under four seconds.
Scalability
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Scalability is key for a payments system that must support transactions on a global scale. Particularly, there are two separate categories of scalability:
On-chain and off-chain
On-chain refers to transactions directly on the crypto ledger, whether it be Bitcoin’s network, Ethereum, or the XRP Ledger. Off-chain or “off-ledger” refers to transactions that occur outside the ledger, which summarized as one transaction and communicated to the native ledger at a later time. XRP’s on-chain clocks in at 1,500 transactions per second (TPS), far surpassing Ethereum’s 15 TPS, or Bitcoin’s pre-Segwit 6 TPS. Note that after Segwit, Bitcoin was able to process 16 TPS & would have jumped to 32 after Segwit 2X.7.
While all three crypto-currencies boast phenomenal off-chain speeds, they are horizontally scaled which means more computing power is added. The transactions per second tend to increase in direct proportion. XRP’s off-chain speed has been clocked in initial tests at over 70,000 TPS, which far exceeds even centralized databases such as Visa.
So, off-chain speeds as evidence that Bitcoin or Ethereum is capable of handling global transaction levels. The native network speed remains continue to serve as an ultimate back-stop for throughput of each system; so far, neither can approach the speed of the XRP Ledger.
4. Benefits of xRapid
The fourth out of Key Reasons You Should Invest in Ripple, is the fact that Ripple is a pioneer in the use of cryptocurrency to transfer value for mainstream financial companies. They are realizing this through xRapid, which is their software that automatically uses XRP to augment banks’ liquidity when transferring value across borders.
It should help banks cut costs between 42 per cent to 60 per cent. xRapid is being used in production currently by one first-adopter organization; Cuallix. Cuallix is using XRP to transfer value from the United States to Mexico.
5. Global payment on massive scale
Key Reasons You Should Invest in Ripple
Quadrillions of dollars move across borders every year. The current levels of value that SWIFT handles are around $5 trillion per day, or 1.25 quadrillion dollars per year. Ripple’s Consensus Ledger can process 1,000 transactions per second and settles an international payment in three seconds on average.
This means there will be a substantial and measurable increase in the velocity of money, and it’s highly likely that a similar effect will occur with regards to the number of transactions. Ripple’s technology takes the existing system of money transfer and reduces the cost to near-zero and the processing time to near-instant. The conclusion is that we can take the current international payment volume levels and multiply by a factor to arrive at the true size of this market.