What is Ripple? This has been the most prominent name within the cryptocurrency space. In short, Ripple is a payment protocol that facilitates fast, frictionless cross-border payments with minimal fees. This payment protocol also hosts its native asset, XRP, which acts as the chief medium for transferring value over the network. XRP, rebranded in late 2018, formerly known as Ripple.
In the words of Ripple, Inc RippleNet is the most advanced blockchain technology for global payments—making it easy for financial institutions to reach a trusted, growing network of 300+ providers across 40+ countries and Six continents.”
RippleNet works by potentially hosting multiple potential assets of value. The network hosts an On-Demand Liquidity mechanism, which allows the transfer of values and exchanges across the world.
Bitcoin is a Blockchain-based currency using mining (proof-of-work), and while Ripple remains as a Cryptocurrency token which uses an iterative consensus ledger and validating servers network along with XRP.
XRP is the native token of the Ripple network. Initially, the Ripple protocol was created in 2004, with the intention of revolutionizing interbank transactions. But XRP appeared later, around 2013, when Ripple Labs started its activity, and the team took Jed McCaleb on board as its leader, later bringing in new investors.
The XRP asset was then conceived as having multiple use cases within the network. The immediate use case for XRP is to serve as a vehicle for carrying transactions, by representing any type of asset. XRP was envisioned with a total supply of 100 billion units, which are indivisible, unlike Bitcoin.
Ripple has issued multiple challenges to the leading position of Bitcoin. The involvement of Jed McCaleb was what brought Ripple into the world of cryptocurrencies. From that point onward, the competition between Ripple and Bitcoin intensified. This was the time that the narrative of Ripple and its protocol ‘making Bitcoin obsolete’ started to appear and be repeated. But Ripple’s asset was still hovering at sub-penny prices, while Bitcoin had already made its forays into four-digit territory.
By the time 2017 rolled in, Ripple was ready to make its biggest attack. The aim to displace Bitcoin, both in terms of market capitalization and usage, became central and drew in many true believers. Around that time, Bitcoin was also going through a mining boom, which showed how costly its production was. Ripple positioned itself with a system that did not require that much electricity, while promising to be more scalable.
The years in development, in addition to big promises and an overall bull market, pulled out the XRP market price from its sub-penny positions, and into a growth boom unseen before. True believers were ready to even abandon Bitcoin for the chance of owning an asset that aimed to make Bitcoin obsolete.
Around 2017, Ripple was known as “the coin for the banking industry,” and ironically took to the task of creating “the bankers’ coin”. This paradox for Ripple went against the Bitcoin ethos, which was about independence and offering people an alternative to banking.
There is no certain way to say which asset will be a better investment. Bitcoin has a vast trading network with spot markets and futures, while Ripple’s XRP trades in much smaller batches.
There has been a narrative that in case of success, and if Ripple is adopted as the de facto standard of interbank payments, XRP may displace Bitcoin in terms of market capitalization, with an exorbitant price per unit of $589.
Ripple has been a deft communicator, under the guidance of its CEO, Brad Garlinghouse. The company boosts its presence with bank partnerships. Ripple has also expressed readiness to move onto a new form of fundraising, by performing an initial public offering. Thus, Ripple would tap on financing both from the crypto world, and from the world of traditional finance.