I previously wrote about how some vocal consumer traders of XRP are calling it a “cripple” coin as it seems to be “going nowhere” (of which I expelled, here), but let’s just recap how we are getting “to the moon”:
XRP becomes dominant settlement currency, new corporates stockpile it for cheap/fast payments.— David Schwartz (@JoelKatz) December 9, 2017
Yes, it’s the uptake of XRP to being the ‘dominant’ settlement currency. Nothing else matters -nothing. So, when can we expect to “get to the moon”? For this, we need to have a basic understanding of what Ripple Labs strategy is, but first of all, we need to have a general understanding of Ripple Labs, their blockchain, XRP and how this all melts together to get us where we all want it to go.
What problem is Ripple Labs solving?
Firstly, note how I start with the problem Ripple Labs are solving? Now, try and show me real-life problem solving many of these other blockchains and crypto currencies deal with? Yep, thought so! But, we’ll discuss hype vs, usefulness in another article, at another time!
Problem 1. International money payment transfers are a pain. Even from a consumer point of view, if you’ve ever sent money internationally via a bank transfer (or needing to receive), delays can be days or nearly a week sometimes!
Problem 2. Foreign currency exchange is expensive. Charges get passed back and forth between banks with the end-user (consumer) bearing the brunt of the cost.
Slow turn around times at a costly rate? Yep, that sounds like a great problem to solve.
Where does Ripple Labs blockchain come in to this?
Ripple’s blockchain can be summed up with these two analogies:
Firstly, the speed. A great way to compare current, archaic process to Ripples solutions is like comparing mail delivery versus a P2P instant messenger, i.e., the archaic way needs to go via 1 or more third parties (the postal service), which then needs to move between one location to another, literally at a snails pace in comparison to Ripple’s next to instantaneous transfer of information via the blockchain.
Secondly, there’s the cost. Cost associated with actually creating the transactions and movement of money. Banks have their own procedures and process, usually, quite different to others. And while there can and will be overlaps, it’s like 2 different languages trying to talk to each other.
Whereas, Ripple’s blockchain, when integrated in to bank A and bank B’s processes, this means the translation of money isn’t needed – everyone is talking the same language.
Where does XRP come in to this?
So, while Ripple’s blockchain speeds the process up considerably, there’s one more problem to solve – Bank A in American and bank B in the UK needing to have nostro accounts with each others currency… a simple headache between two countries, but then placed in to the global currency market? This causes vasts amounts of money to be sucked up in to holding all these other currencies.
That’s where XRP comes in. It further improves the speed of money transfer internationally, but it also improves the liquidity of each bank as they no longer need nostro accounts full of foreign currency, thus, free cash up to be utilised elsewhere in the country.
How it all comes together – a timeline
Look, the long and short of it is, we cannot (as outsiders), put a date on this, but one thing is for sure; it’s not a bunch of consumer speculators that’s going to cause a major break-out – it will be the gradual (or expedited) speed of which banks, other financial institutions and large corporations take up XRP.
But hold your horses! First of all, Ripple need to keep the throttle down with bank adoption of the blockchain. Remember, banks (and other fin. institutions) are like cruise ships, to make a turn, it’s a slow and laborious task and that’s just from an internal integration point of view – this isn’t even touching on the point of how each bank has to uphold the legal requirements set on them from their respective country… and we all know how governmental bureaucracy can slow things down!
However, I’m sure that those that have already joined the Ripple blockchain and those that do so in the future, I’m more than confident that their next stage, once confidence is built that everything is working as should be the case, XRP will quite rightly be the next step.
Watch Ripple news announcements closely – look at how many are on-board with them (that we know of outside of NDAs) and you can see that all signs are positive and we’ve moving in the direction of the moon. So, next time you hear a disgruntled XRP trader, remind them of how Ripple is different and actually has a user case for its price increase, where as, how can anyone substantiate the insane Bitcoin rise?
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