Ripple, the real CryptoCurrency?
First off, are you sitting down? I’m about to blow your mind. Ready? Did you know that Ripple was actually the first cryptocurrency!? The protocol behind it was actually created in 2004, 5 years before Bitcoin was launched. Okay, maybe that isn’t “the cure for cancer”, “the location of Ark of the Covenant”, or the answer to “what is actually a completed pass in the NFL”. But, when I saw that, it definitely surprised and excited me.
The first installment of Ripple, called Ripplepay, was developed by Ryan Fugger a Web Developer. Fugger had the idea of creating a decentralized monetary system that would allow people and communities to create their own money. Later, Opencoin took the concepts that Fugger developed and used them to develop what we know today as the Ripple network.
In September of 2013, Opencoin Inc changed its name to Ripple Labs Inc. Since then Ripple Labs has been partnering with companies such as: ZipZap (a Western Union Competitor), Accenture, American Express, just to name a few. There have also been numerous testing phases with various banks around the world to see if Ripple could provide cheaper, faster, transferring and settling of funds. All phases have shown very promising results.
A large Japanese Bank Consortium along with a few of the largest banks in South Korea are testing the Ripple Network with possible full scale adoption in the near future. This could be just the start of Ripple adoption.
In a nutshell, what Ripple is trying to do from what I have read, is take on SWIFT which is the way banks around the world currently communicate and move money. As it was put in some research I have read. Currently, for banks to move money worldwide they have to hold 10 Trillion+ dollars in reserves and as we all know, transfers can take 3 days or more to occur. With the Ripple network, transfers will happen instantly and do not require large reserve funds to be held.
Here is a scenario, say someone in Japan wants to send a large amount of money to someone in the USA. With the Ripple network, the funds would immediately be converted from Yen to Ripple then immediately converted from Ripple to USD at the receivers end. Ripple can currently process 1500 transactions a second and each transaction takes about 4 secs to complete. That is on par and rivaling what Visa can do. Not to mention that it is much cheaper and costs a fraction of the electricity to perform.
First I must mention I do have an investment position in Ripple. RippleLabs may currently be focused on large financial institutions, it will not be long before it is benefiting individuals worldwide. The pushback you always hear about Bitcoin is that it is so volatile therefore it cannot not be used as an actual “currency” but more so as a “store of value”. One reason for this is that there will only ever be 21 million Bitcoins in existence. Ripple on the other hand has a 100 Billion max cap and currently about 39 Billion in circulation.
That would lead to the assumption that the price would be much more stable and with fact that the network can process transactions in quantity and speed that rivals Visa. All signs point in favor of this being the crypto we actually use in day to day transactions.