RIPPLE: a good investment idea?
What is RIPPLE Cryptocurrency (XRP)?
Ripple (XRP) is a real-time gross settlement (RTGS) system, a foreign exchange market, and a remittance network. The Ripple protocol (also called “Ripple Transaction Protocol” (RTXP)) is built on a distributed and open source Internet protocol.
More clearly: Ripple aims to enable secure, instant, almost free financial transactions of any size without chargebacks. Ripple already works with many banks (UBS, Santander, UniCrédit, etc.) which exchange millions of euros every day from bank to bank. The Ripple solution would allow banks to make these transfers almost free of charge and instantly.
Good to know: the Ripple network supports any cash currency, cryptocurrency, commodity or any other units of value (such as air miles or mobile minutes). Enough to cover transactions in all sectors.
Is RIPPLE a good investment?
In the short term, Ripple Tokens (XRP) are not a bad investment. It has good trading volumes. It is on a lot of cryptocurrency purchasing and trading platforms. And its slightly lower than average volatility can contribute to the stability of a diversified cryptocurrency portfolio.
However, it is important to know how XRP owners can expect to benefit from Ripple's long-term bullish trajectory.
Indeed, XRP investors face two dilemmas:
1st dilemma: RIPPLE's greater purpose is to do business with banks and other financial institutions. "Use our blockchain technology," they explain "and we will help you transfer any currency to any other institution faster and cheaper.
On paper, everything looks good, right? The problem is that all these banking transactions have nothing to do with RIPPLE. Institutions and banks do not need XRP for their transactions. They all go from fiat to fiat.
In reality, Ripple will "tokenize" currencies and completely bypass the need to use the XRP token in the first place.
As a result, XRP owners could be left behind.
2nd dilemma: Ripple is not a public company. So there are no Ripple shares to buy. Could it break into the banking industry? Could it generate dividends? Maybe. But again, this has nothing to do with XRP.
It is important to remember that XRP tokens are not required for bank to bank transactions. Ripple also does not allow owners to share in the company's profits. To do this, investors will have to wait for an initial public offering.
Technology vs. Governments
Ripple clearly challenges the affairs of traditional financial institutions that are deeply rooted in a world controlled by governments and supranational institutions, such as the International Monetary Fund, the World Bank and the Bank for International Settlements. If XRP is perceived as a direct threat to their interests, what would it take for them to ban all financial institutions under their thumb from using the token Answer: much less than it would take to ban decentralized cryptocurrencies whose users are not under their control! In fact, it is safe to say that banning decentralized cryptocurrencies would be almost impossible. But Ripple is anything but decentralized.
Ripple investors may soon understand this for themselves. They will begin to realize that the introduction of a new currency is not just a matter of technological superiority; it is also a political battle! And politics is a completely different field. Consider the facts:
Fact no.1: Of course, RippleNet is technologically superior to SWIFT. But banks and governments have no interest in Ripple, while they do have a stake in SWIFT.
Fact no.2: banks and regulators want that level of control. That is how they can finally sanction nations like Iran. All they have to do is close SWIFT countries, and bang! Its currency and its economy are melting. Clearly, SWIFT is more than just a transfer application for banks. It is also a geopolitical control tool.
Fact no.3: Is RippleNet ready to be used in the same way? Maybe. But the most likely scenario is this: international bankers and regulators wake up one morning and say: "Hey, why the hell do we need RippleNet, all we have to do is co-opt, we use the same blockchain technology. We embrace Ripple and XRP and goodbye to everyone behind them."
This is not really a good outlook for Ripple's long-term future!