Ripple (XRP)
Description: Cross border transactions between banks and payment providers
Slogan: “Enterprise blockchain solutions for global payments”
Potential Market Size: $155 trillion/year cross border transactions (McKinsey Global Payments Industry Study)
Primary Focus: Ripple has had huge success lately given its focus on satisfying and providing cross-border payment services for big banks, who have driven up the price of Ripple. It currently has 100+ customers and has the most enterprise traction of the four coins. One big risk is the 55 billiion XRP put into an escrow out of a max 100 billion XRP. Once these escrows expire, there is always the risk of the company flooding the market with XRP. That being said, while Ripple is much further ahead than the other 3 coins, I fear that banks will license Ripple’s blockchain that is centrally governed without intended usage of their token.
Architecture: Built on Ripple (payment protocol)
Market Cap: ~$77B
Request Network (REQ)
Description: A decentralized network for payment requests
Slogan: “The Future of Commerce”
Potential Market Size: $1,825 trillion/year on the SWIFT network that Request Network can capture on its platform (Extrapolated using daily historicals from U.S. Dept. of Treasury)
Primary Focus: Request Network, also known as “Paypal 2.0” is a Y-Combinator-backed project created by the founders of Moneytis. Request Network has the biggest opportunity of the four. They are building out the infrastructure for payments and accounting/auditing between both businesses and consumers. Request will be more secure (blockchain tech), intelligent (smart contracts and IoT) and universal (supports all currencies both Fiat and cryptocurrencies) than Paypal. A key differentiator of Request is its usage of “token burning” during transactions, which intrinsically increases the value of the remaining REQ coins. In addition, Request is heavily focused on reputation management and helping accountants and auditors easily review transactions at extremely low costs. My concern here is that they are the earliest stage project of the four and also the most ambitious project, soon to be released on Mainnet. That being said, their team has executed ahead of planned timelines and I believe they seem to have the right expertise to get the job done.
Architecture: Built on Ethereum
Market Cap: ~$480M (Market cap is ~1/194 the size of Paypal at current valuation)
Paypal Market Cap for comparison: ~$97B
OmiseGo (OMG)
Description: Advanced e-wallet and payment platform
Slogan: “Unbank the Banked with Ethereum.”
Potential Market Size: N/A (market not clearly defined)
Primary Focus: Many people around the world can’t get a credit card or pay for items online because geographically there are no banks around or their credit score is too low to receive financial services. OmiseGo looks to change that by enabling everyone in especially in developing countries to create an e-wallet that enables this underserved population the ability to cash in and cash out without a bank account at low costs. They have an enormous presence in Asia, and their vision is to look like the bank of the future. My concerns here are adoption outside of the Asian countries given the difficulty of scaling across geographies as well as a tough name to pronounce resulting in the necessity for a potential re-branding, but a very solid project with a fair amount of adoption nevertheless.
Architecture: Built on Ethereum
Market Cap: ~$2.5B
Stellar (XLM)
Description: Cross border currency transfers between developing countries
Slogan: “Move Money Across Borders Quickly, Reliably, And For Fractions Of A Penny”
Potential Market Size: N/A (market not clearly defined)
Primary Focus: Stellar competes directly with Ripple at different ends of the market. Stellar is a great project focused on providing low-cost financial services for lower classed individuals, whereas Ripple is focused on profit generation and founded by ex-bankers. Stellar differentiates itself through solutions targeted around micropayments, mobile banking and services for the underbanked (similar to OmiseGo). The thing I like about Stellar is that structurally it is set-up as a non-profit and something established for the people to easily exchange money between one another. I think the market is large enough to support multiple competitors, but it is important to note that they compete with Ripple in cross-border transactions and OmiseGo in services to the underbanked.
Architecture: Built on Stellar (payment network)
Market Cap: ~$11.7B
######Disclaimer and Final Words:
I am a holder of all four coins, but from a returns standpoint, I am most bullish on Request Network given it has the largest market size, smallest market cap and an incredible team. But from a risk standpoint, Ripple is the lowest risk coin to hold given its widespread adoption and use across numerous banks that are displayed on their website. Honorable mention for both Stellar and OmiseGo, which are superb projects that will still succeed. Remember that the financial market is extremely deep with trillions of dollars in transactions moved every day, so there is ample room for all four of these coins to find their niche whether it is in a certain region of the world or in certain product types (i.e. micropayments). All in all, you can’t go wrong holding a portfolio of these four coins because each one of these cryptocurrencies are going to kill it in 2018!
Sources: