XRP Pump and the Future of Ripple

Last week XRP made headlines by increasing 60% in one day. This came as a shock to most in the community and many are wondering if this pump could propel the market back into a bullish trend. Currently, it is unlikely to occur, nevertheless 2019 appears to be a very bright year for Ripple and XRP.

The company Ripple has formed more partnerships than any other cryptocurrency project in the space. They also have a promising roadmap of what they want to accomplish throughout 2019. Essentially, XRP is a bridge between banks to accelerate international fiat currency payments. Currently, an XRP transaction takes about 4 seconds. This is much faster than bitcoin which can sometimes take up to 45 minutes. Up until now, banks have been using a technology called Xcurrent to complete their international XRP transactions. However, Ripple plans to release a new cryptocurrency product called Xrapid which will accelerate XRP transaction speeds even more. Ripple has hinted at releasing this product in the next month or so. The anticipated launch of Xrapid may have been the reason XRP pumped 60% last Friday. The implementation of Xrapid is expected to increase the usage and adoption of XRP for global payment transfers.

Another expected addition to XRP is a smart contract platform known as Codius. This platform was one of the first smart contract platforms in the cryptocurrency space. It was set aside for a few years, but recently it has been revived by the developers of XRP. Codius will allow developers to write decentralized applications and smart contracts on XRP’s blockchain. There is no official word of when this platform will launch, as it is still beta technology. Many fans of XRP expect Codius to dominate other Dapp platforms because it is expected to be the fastest platform due to XRP’s high transaction capabilities. Although major platforms such EOS and Ethereum are very popular smart contract platforms, they are currently unable to effectively scale. Although XRP is not as decentralized as other cryptocurrencies, it will be interesting to see if Ripple’s Codius will be a competitor to other smart contract platforms.

Ripple has also launched Xring which will allow people to invest in XRP-centric startups built on the XRP ledger. Xring ‘aims to give entrepreneurs in the blockchain space a better start in business – as long as they boost the XRP ecosystem.’ According to an article from Coindesk,

‘Ripple has appointed Ethan Beard, ex-director of the Facebook Developer Network, as senior vice president to head up the Xpring startup incubator and Ripple’s developer program.” Beard further commented,

“Blockchain and digital assets have the ability to solve important problems and XRP – with it’s speed, scalability and demonstrated real-world use case – is a great tool for startups and entrepreneurs to build businesses around.”

In addition to Codius and Xring, Cobalt is another 2019 update expected for XRP. It is anticipated that Cobalt will decrease transaction times from 4 to 1 second. On the XRP network, it currently takes about 4-8  seconds for a transaction to execute (1500 per second). Cobalt is expected to propel XRP further into the spotlight by enabling the currency to scale to +100k transactions per second. Transaction speeds this fast eliminate the potential for fluctuations in the price for each transaction.

Ripple intends to make XRP even faster than Xrapid by combining xVia, xRapid and xCurrent into one technology called Convergence. XRP will then flow through all three of these technologies. According to Jim Chauncey-Kelly, the Director of Talents Acquisition at Ripple,

“Technically, xVia is not a network solution but rather an API solution that allows for communication during cross border settlement with XRP at center stage.”

Although Convergence is not currently active, its promise of nearly-instantaneous transaction speeds has significantly contributed to the excitement around XRP.

Additionally, Brad Garlinghouse, CEO of Ripple, said that ‘dozens of banks will be using XRP in 2019.’ In an article from CNBC Garlinghouse commented,

“I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool, ‘Garlinghouse told CNBC in an interview at the Money 20/20 Europe fintech conference in Amsterdam, Netherland, “You know, by the end of next year, I would certainly hope that we would see you know in the order of… dozens.”

Furthermore, one of the most exciting events for Ripple is their 2019 plan to distribute 2 billion XRP tokens into the Indian economy. Since Ripple owns about 60% of all XRP, they have the ability to distribute a large amount of tokens. Ripple intends to distribute them to every citizen. Ripple Vice President, Asheesh Birla, commented  earlier in July,

“The company (Ripple) envisions surpassing the adoption rate of bitcoin to ensure XRP becomes the dominant cryptocurrency in the region (India). We looked early on at India, and we looked at two billion people – a huge market. And we decided, how do you get two billion people onto Ripple? Do we give the currency away to every Indian, that’s like two billion – just give it away?”

At XRP’s all-time high of about 3 dollars, this amount equalled around $6 – 7 billion. Due to the difficulties of distributing 2 billion XRP to every citizen, Ripple has partnered with major banks and telecom companies in India. Birla further commented,

“That was one idea. But then we realized that if you get the top three banks in India onto Ripple, you get 80 percent of the market share. And then we looked at – where’s the future? And so we realized in the next five years, one billion people will become banked in India, but they’ll be banked through their phone. So then we started targeting mobile phone providers and telcos. And so now, I think that in our pipeline we have probably 50 percent of the market in India, either integrated onto Ripple or in the deal, in the sort of pipeline to be signed to India.”

If 2 billion XRP tokens are distributed into the Indian economy along with the upgrades of XRapid, XRP’s liquidity could increase drastically which would most likely lead to a significant price increase. The majority of banks currently use a international payment system known as Swift. This technology only has value if major financial institutions use it. Ripple and XRP are expected to replace Swift as a global payment method due to their higher speeds and efficiencies.

Ripple has dominated the cryptocurrency banking sector through their numerous partnerships and extra cash on hand. However, there will be other cryptocurrencies in the banking sector who will thrive and grow. The most significant competitor to XRP is Stellar. Interestedly enough, Stellar is a fork of XRP. Additionally, Jed McCaleb, the co-founder of Stellar, also co-founded Ripple and served as the CTO of the company.

From an investing outlook, XRP looks to have a very bright future. This is primarily due to its immediate use case. Although cryptocurrencies and blockchain technology will create trillions of dollars of value, they will most likely not be able to effectively scale until 2020 at the earliest. 2020 is when the crypto space expects major scaling solutions to be implemented. These upgrades include sharding for Ethereum and lightning network for bitcoin. It appears that XRP may be the most active cryptocurrency in 2019 because it can already scale effectively. XRP sacrifices decentralization in order to achieve such high transaction speeds, nevertheless its global use case is already firmly established within the banking sector.

This means that short term, XRP will probably be very active in 2019, one year before Bitcoin and Ethereum’s improvements. XRP fans have debated the possibility of XRP being propelled into the #1 market cap position. This situation is highly unlikely, but fans of XRP argue that if XRP was listed on Coinbase during its January peak, it may have overtaken bitcoin for the #1 position. Some have speculated that Brian Armstrong of Coinbase may have personal conflicts with Ripple CEO Brad Garlinghouse. For Gemini Exchange and the Winklevoss Twins, it is public knowledge that they own a significant amount of both bitcoin and Ethereum. Therefore, it is not in their best interest to list XRP and give it momentum to knock off Ethereum from the #2 position or even bitcoin at #1. This is scenario highly unlikely.

Above all, if XRP is the only cryptocurrency with a true use case along with massive Asian adoption in 2019, it may be worth much more than its current valuation. However, XRP increased 60% last week, therefore it may be better to wait for a better buying opportunity. (Not Financial Advice)

Disclaimer: I am not a financial advisor, this is not financial advice. Please do your own research and make objective decisions. This article is intended to educate readers on the possible future upgrades of XRP. Disclosure: the author of the article owns cryptocurrency.