Beyond Bitcoin: Why XRP (Ripple) is worth watching?

what is a Cryptocurrency?

Cryptocurrency is a term for various digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Cryptocurrencies are also decentralized. There’s no central authority governing the currency. Once a transaction is on the blockchain you cannot change it. It is difficult to censor cryptocurrency: so long as the system is sufficiently decentralized.

XRP(Ripple)

XRP is a unique type of cryptocurrency with a specific design and purpose. It's often categorized as a payment token, but it has some distinct features that set it apart from other cryptocurrencies. Here's a detailed explanation: 

  XRP as a Payment Token

• Designed for Fast and Efficient Transactions: XRP's primary function is to facilitate quick and low-cost cross-border payments. It aims to be a bridge currency between different fiat currencies.
  
• Focus on Financial Institutions: XRP is particularly geared towards use by banks and financial institutions. Ripple, the company behind XRP, has partnered with numerous financial institutions to integrate XRP into their payment systems.

Key Features of XRP

• Pre-mined Supply: Unlike Bitcoin, which has a limited supply that is gradually mined, all XRP tokens were created at once. This gives Ripple more control over the distribution and supply of XRP.
  
• XRP Ledger (XRPL): XRP operates on its own blockchain, the XRPL. It uses a unique consensus mechanism that doesn't rely on mining, making it more energy-efficient than some other cryptocurrencies.

XRP has helped in driving transactions that represent more than $1 trillion in terms of value exchanged between different parties. The XRP token was created with the sole objective of serving as a digital currency for payments, tailored to be better than Bitcoin with faster transaction speed, enhanced sustainability and higher cost-efficiency. The XRP token takes only 3 to 5 seconds for transaction settlement while BTC needs 500 seconds. The cost of each XRP transaction is around $0.0002 while BTC transactions might cost $0.50. XRP offers better scalability than Bitcoin with the capability to process 1500 transactions per second.

The XRP Ledger is a decentralized blockchain that uses its own digital currency to process and record financial transactions. The XRP Ledger was built over 2011 – early 2012 by Jed McCaleb, Arthur Britto and David Schwartz. At the time of its creation, there were 100 billion XRP. In September 2012, Jed and Arthur, along with Chris Larsen formed Ripple (the company, called OpenCoin Inc. at the time) and decided to gift 80 billion XRP to Ripple in exchange for Ripple developing on the XRP Ledger.

The story of XRP is an interesting one, with roots that go back further than many people realize. Here's a breakdown of the key moments in its history:
Early Days (2004-2012):

• RipplePay: The foundation of what would become XRP was laid by Ryan Fugger in 2004. He developed a system called RipplePay, which aimed to allow individuals to create their own digital money in a decentralized way. This was well before Bitcoin came into existence.
• Jed McCaleb and Chris Larsen: In 2011, Jed McCaleb, known for his work on eDonkey, teamed up with Chris Larsen, a successful entrepreneur, and they presented their project to Fugger.
• OpenCoin: In 2012, Fugger gave them the reins to RipplePay, and McCaleb and Larsen founded a company called OpenCoin based out of San Fransisco, USA. They built upon Fugger's ideas and developed the XRP Ledger (XRPL), a blockchain-like system designed for fast and efficient transactions.

XRP's Creation and Launch (2012-Present):

• XRP Token: In 2012, along with the launch of the XRPL, the digital asset XRP was created. Unlike Bitcoin, which is mined, all 100 billion XRP tokens were created at once.
• OpenCoin to Ripple Labs: In 2013, OpenCoin was renamed Ripple Labs, reflecting the name of the underlying technology.

Regulations:

Centralization: One of the main criticisms of XRP is its perceived centralization. Ripple holds a significant amount of XRP, and the XRPL's consensus mechanism is seen as less decentralized than some other blockchains.
Regulatory Uncertainty: The regulatory status of XRP has been a subject of debate. In some jurisdictions, it's unclear whether XRP is considered a security or a currency, which can create uncertainty for its adoption.

In 2020, the SEC (U.S. Securities and Exchange Commission) sued Ripple, alleging XRP was an unregistered security, while Ripple argues it's a currency like Bitcoin. A court later ruled XRP was not a security for retail sales but found violations in institutional sales. This case is important for the crypto industry as it could set a precedent for how cryptocurrencies are regulated. The lawsuit is ongoing, and its final outcome remains uncertain.

Past Performance:
Below is a highlight of the past returns over different time periods:

Duration	Returns
Past 3 Months-	495.78%
Past 6 Months-	387.33%
Past 1 Year-	495%
Past 5 Year-	1189.76%

XRP as a token has performed exceptionally well in reference to past performance of XRP/USD generating around 500% over the course of last 3 months and since the past one year. Also in the last 5 years the XRP token has given around 1190% returns.

Technical Analysis and Future Growth:

Based on our methods of analysis, XRP is currently in the accumulation zone with projected expectations of around 140% return in the next 3 months. Our time and price analysis is coupled with consolidation range and fibonacci retracement tool.

Sudhanshu,

A Bhilai-based Finance professional who likes intellectual conversations and spending time in nature.