2017 was an incredible year for many cryptocurrencies, including Bitcoin. Among them, Ripple deserves a special mention. December 2017 saw Ripple reach a new and unbelievable high. It increased from a value of $0.27 in the beginning of December to about $2.85 by the end of the month.

2018 has also dawned great for the cryptocoin as it has grown past $3 for the first time in its history. While there were visible drops in the past few months, Ripple is not that badly hit like other cryptocurrencies. Here is a closer look at why the value of Ripple has a potential to increase and whether it is a good idea to buy Ripple or not.

Ripple overview

Launched in the year 2012, Ripple founders aimed at making transactions with cryptocurrency easier for businesses and banks. Its scalable asset backed by a reliable digital technology is traded as XRP. Founded by Ripple Labs, there is a fixed number of XRP tokens right from its inception. The tokens counting about 55 billion are stored by the founding company.

Ripple helps solve the hurdles present in payments across the globe today. It has the capability of connecting the hitherto disjointed blockchain and ledgers.

What makes Ripple Unique?

Here are a few features that make Ripple differ from its competitors:

  • Quicker transactions: The well-established Ripple Labs uses innovative technology to enable faster transactions that are finalized in just a few seconds. In contrast, the conventional banking system takes days to enable a transaction. When compared to Bitcoin transactions, which are roughly seven per second, XRP can make faster transactions (over 1,000 per second) and has the scalability that is required to meet demands of customers.
  • Centralized: In contrast to many cryptocurrencies that operate in a way that is entirely different from the traditional fiat currency transaction, Ripple acts in facilitating them. However centralization allows for more market moderation too.
  • Strong support: It is backed by reputed financial organizations such as Westpac, Santander, American Express and more.
  • Cheaper transactions: The transaction charges (about $0.0004) are very low when compared to the conventional banking system.
  • Secure currency: The XRP ledger is maintained meticulously to make it unaffected and resilient to failure.

Deal with American Express

Backed by technology, fintech, and finance experts, Ripple has a strong presence in the industry. It focuses on widening its customer base and partnerships to maintain a competitive edge in the cryptocurrency ecosystem.

With more than 75 customers who are commercially deploying and more than 100 part of its roster, Ripple capitalizes on its partnerships to increase its popularity.  Its connection with American Express is one such strategic merger that has made it a popular financial tool instead of a new form of technology that is hard to come to grips with.

In 2018, Ripple has come out with new partnerships. It has linked with banking majors such as Zip Remit, InstaReM, IndusInd, Itau Unibanco and Beetech to enable faster and cheaper international transactions. With the partnerships, Ripple strives to make it easy for a customer to send or receive money from any part of the world.

Is Ripple preferred over Bitcoin now?

Although Bitcoin’s market cap is bigger and stronger than Ripple’s, the recent growth of the altcoin should be considered. The explosive growth of Ripple in 2017 makes it a promising investment to consider for venture investors.

There are certain drawbacks to consider too. For instance, you cannot mine XRP like you do with Bitcoin. All the tokens, the number of which is about 100 billion, are fully controlled by Ripple creators. This can create problems related to inflation. If the makers decided to release all the tokens rapidly in say about 4 or 5 years, the supply will increase more than its demand. So here comes the opposite side of centralization.

However, considering the speed of Ripple transactions, other cryptocurrencies, including Ethereum and Bitcoin, still have a long way to go. Though, Ripple has been challenged by tight competition no less than the leaders, and the closest rival is Stellar so far. This proves the fact that with more than 1,000 different cryptocurrencies being in existence now, the possibility of a single cryptocurrency gaining supremacy is minimal.

How volatile is it?

In the present scenario, cryptocurrencies are being purchased on mere speculation. The media hype coupled with conflicting reactions from governments of different countries make the coins attractive.

The technology behind the cryptocurrencies is also making the public believe more in the concept. Ripple is one such cryptocurrency which is a bit different from the rest in the level of centralization and its financial institution partnerships.

With some of the major players in financial industry, being part of customer base of Ripple and its low transaction fees, it holds a definite appeal and value. The factors like absence of mining, Ripple team retaining about 50% of the entire supply of tokens and XRP not being a decentralized form of currency have made it a less volatile asset when compared to other cryptocurrencies.

Conclusion

When you consider all the cryptocurrencies that ruled the roost in 2017, Ripple was the one to register an increase of 4,000% in a span of 6 months.

With international banks and financial institutions entering Ripple network day by day, the popularity of the platform increases, which may play a dominant role in influencing the value of XRP in the future. Ripple Labs also take steps to improve its technology by making it simpler and stronger, thus favouring the growth of their customer base and user acceptance.

Though the above mentioned reasons might contribute to the price of Ripple going up in the coming months, in fact there is no ironclad guarantee that it will happen. The market for cryptocurrency is rapidly expanding as new ICOs emerge and offer more advanced solutions for digital finances. So, would it be safe to assume that no other token can overtake Ripple? Probably, not.