Should You Invest In Ripple Coin?

Ripple (XRP) is a cryptocurrency with a purpose distinct from other cryptocurrencies. XRP was created to migrate financial transactions to the RipplePay system for faster, cheaper verification. XRP is not a traditional cryptocurrency, as it was mined all at once by the parent company, with the majority of the cryptocurrency held by them. XRP is also not an open blockchain, as it is a relatively closed blockchain where users have to create trust lines with other organisations to get access.

The average price of XRP is expected to increase by 30.22% and reach $0.750032 by August 31, 2024. Crypto analysts have also predicted that the maximum price of XRP will be $7.54 by 2030. However, investing in XRP is still a gamble due to the pending legal actions against it with the SEC.

XRP's unique properties

XRP, the digital currency of Ripple, has unique properties that set it apart from other cryptocurrencies. Here are some of its key features:

Low Fees

XRP transactions incur a standard fee of 0.00001 XRP, which is significantly lower than the fees charged by banks for processing international transactions. As of June 2024, this equates to approximately 0.47 USD.

Fast Transactions

Unlike banks, which can take days to confirm a transaction, and Bitcoin, which can take hours, Ripple transactions are confirmed in just three to five seconds. This makes it ideal for cross-border transactions.

Reputable Financial Institutions

Ripple has gained the trust of prominent financial institutions, including Bank of America, Santander, and the Canadian Imperial Bank of Commerce. These institutions utilise Ripple's RipplePay system for real-time international payments and bill settlements.

Alternative to SWIFT

Ripple serves as an alternative network to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which is the current standard for international payments. Ripple facilitates swift cross-border transactions between financial institutions, offering quick currency exchange and payment settlement services using various fiat currencies and cryptocurrencies.

Unique Node List

XRP has its own ledger for recording transactions, but unlike other cryptocurrencies, only selected trusted participants, collectively known as a unique node list, are allowed to validate transactions. This adds an extra layer of security to the network.

Frequent Ledger Updates

Ripple's validators update their crypto ledgers every three to five seconds, allowing for rapid validation of transactions. This is a much faster interval than that of alternative cryptocurrencies.

The regulatory landscape

The U.S. Securities And Exchange Commission (SEC) filed a lawsuit against Ripple in December 2020, alleging that the company failed to register XRP as a security in compliance with federal law, resulting in illegal gains of $1.38 billion from investors. This lawsuit is still unresolved as of June 2024, creating regulatory uncertainty for investors.

Ripple's network versatility and low transaction fees make it a promising payment system for the future. However, investing in XRP remains a gamble due to the pending legal actions with the SEC. Cryptocurrencies, including XRP, are typically highly volatile investments. Therefore, conducting thorough research and making quick investment decisions are crucial for profiting from crypto investments.

The pros and cons of investing in XRP

Pros

• XRP is affordable, with low transaction costs.
• Ripple solves problems and creates opportunities, particularly for large financial institutions.
• Ripple has a large market cap, indicating strong investor confidence.
• XRP is a fully-fledged company with over 500 full-time employees.
• Ripple has strong partnerships and investors, including American Express, Santander, and MoneyGram.
• XRP is recovering from the SEC case, with growing optimism that the case is weak.
• XRP is 100% decentralised and not under the direction of any bank or centralised authority.
• XRP has proven to be a resilient cryptocurrency, maintaining its position among the top 10 cryptocurrencies by market capitalisation since 2012.
• XRP transfers are fast, taking less than 5 seconds for cross-border transactions.
• XRP is easily accessible on most major exchanges.

Cons

• There will be no more new Ripple, as all XRP coins are pre-mined and already in circulation.
• Ripple owns a massive share of XRP, with the potential for the price to be overinflated.
• It's not decentralised, going against the principles of decentralisation and economic autonomy.
• The SEC case is still ongoing, creating uncertainty for investors.
• The success of XRP and Ripple isn't necessarily intertwined, as many of Ripple's partners are looking for blockchain solutions rather than XRP usage.

The future of XRP

Recent Performance

XRP has demonstrated a consistent upward trend in recent months, indicating sustained bullish sentiment among investors. This momentum suggests that XRP may continue to perform well in the near future, attracting more attention and potentially increasing in value.

Regulatory Win

Ripple Labs secured a significant regulatory victory with a favourable ruling in their lawsuit with the U.S. Securities and Exchange Commission (SEC). This ruling provides clarity on the usage of On-Demand Liquidity (ODL) and is expected to boost Ripple's expansion.

Market Sentiment

The crypto market is experiencing a strong bullish recovery, and XRP has been a beneficiary of this trend. With a market capitalization of $33.502 billion, XRP is currently the fourth-largest altcoin. Positive market sentiment could push XRP's price higher in the near term.

Technical Analysis

On the four-hour chart, XRP exhibits bearish tendencies, with a falling 50-day moving average. In contrast, the 200-day moving average has been rising since late August 2024, indicating long-term strength. On the daily and weekly charts, XRP appears bullish, with rising moving averages that could support future price movements.

Price Predictions

• Short-Term (2024-2025): XRP is expected to reach a maximum of $1 in 2024 and could claim a high of $1.36 in 2025, potentially setting a new all-time high.
• Mid-Term (2026-2029): XRP's price is projected to scale higher, with a potential range of $1.00 to $1.98 in 2026 and $1.25 to $3.99 in 2029.
• Long-Term (2030 and Beyond): In the long run, XRP's price could reach even greater heights, with predictions ranging from $2.86 to $4.89 by 2030 and $5.41 to $6.35 by 2035.

Expert Opinions

Crypto analysts and industry experts have varying opinions on XRP's future:

• Crypto analyst Egrag Crypto predicts a bold trajectory for XRP, with targets at $1.2, $1.6, $7.5, $13, and potentially up to $2,500 by 2029.
• Crypto Rover forecasts a parabolic breakout for XRP in the first quarter of 2024, with the price slightly exceeding $1.
• Digital Coin Price expresses strong optimism, anticipating a significant rise to $1.81 by the end of 2026 and $3.62 by January 2030.
• GOV Capital holds a bullish outlook, predicting a price of $1.1353002910377 in one year and $4.781 in five years.
• Wallet Investor takes a bearish view, expecting XRP to drop to $0.376 by January 2025.

In summary, the future of XRP appears bright, with positive market sentiment, regulatory wins, and bullish price predictions. However, it is important to remember that the cryptocurrency market is highly volatile and subject to regulatory uncertainties. Investors should always conduct thorough research and consult financial advisors before making any investment decisions.

XRP's network consensus mechanism

XRP Ledger is a universal payment system that enables users to transfer funds across national boundaries seamlessly. It is a peer-to-peer payment network that allows for peer-to-peer transaction settlements across a decentralised network of computers.

The XRP Ledger uses a consensus protocol to quickly verify whether transactions have been successfully processed. Any user can download Ripple's validation software to confirm transactions. Ripple also keeps node lists that users can choose from, allowing them to select participants least likely to defraud them during verification. These trusted validators are typically well-known banks or international financial institutions.

Ripple's consensus mechanism, known as the Ripple Protocol Consensus Algorithm (RPCA), ensures that all network participants agree on the validity and order of transactions. The consensus algorithm achieves agreement without relying on a central authority, preventing any single entity from controlling the network or manipulating transactions.

Validators play a crucial role in ensuring the integrity and security of the Ripple network by validating transactions and maintaining the accuracy of the decentralised ledger. They achieve this through a process known as the Ripple Consensus Algorithm (RCA). The RCA allows validators to collectively agree on the state of the network, ensuring that all transactions are valid and preventing any fraudulent activity.

The RPCA operates on the principle of 'one-entity-one-vote', where each validator has an equal influence in the decision-making process. This ensures that no single entity can control the network or manipulate transactions. To maintain network integrity, the RPCA employs a unique mechanism known as the 'Byzantine fault-tolerant agreement'. This mechanism allows the network to reach consensus even in the presence of faulty or malicious validators. Through a process of iterative rounds of voting, the algorithm converges on a final decision, ensuring the network's integrity and security.

In the RPCA, each server on the network independently compiles a candidate set of transactions that are not included in any previous ledger. These candidate sets are then shared with the server's Unique Node List (UNL), a trusted subset of the network that each server queries to determine the validity of transactions. The servers then vote on the accuracy of the transactions, passing through several rounds of agreement to ensure a majority consensus. If a transaction receives a minimum threshold of 'yes' votes, it is included in the next ledger.

This consensus mechanism allows the XRP Ledger to quickly reach network-wide agreement without the need for a central coordinating entity. It prevents double-spending and safeguards the network's integrity.

Frequently asked questions