Despite so much turbulence in the markets Ripple has returned 4.8% vs Bitcoin’s 2.64% in the last 24 hours or Ethereum’s -.75%. Ripple is proving itself to be able to withstand strong headwinds after nearly hitting the $5 mark last year. Of course $.70 is a far cry from its all time high but considering the market as of lately this is impressive. I think despite the concerns over XRP’s future in terms of it being associated with large and central banking clients, there is value in it being a hedge. This is one of the reasons I invested in Ripple as I feel with increasing government scrutiny, regulation, threats, bad news etc.. that this would all cause Ripple to return much better in the long-term. However as I’ve said in past posts, there appears to be the very real fear and possibility that Ripple may just dump XRP if the banks tell or pay them to. In fact I even e-mailed them with detailed concerns from another blog and they had no comment other than asking me to check their news, blog and website so at this point I feel it is very plausible. Ripple’s affiliation with banks and government will either help it right to the top or it could weight down Ripple. Besides that I feel Ripple is a fairly good currency but does suffer from a few other flaws that I won’t get into here.
This is huge news for Ripple but apparently at the time of writing Ripple has tumbled more than 5% to .957 USD (under a dollar now). To be honest I do hold Ripple but I believe my analysis to be unbiased.
The news is huge that Ripple will help Saudi Arabia settle foreign currency transactions and shows Ripple has proven itself in the large scale banking and even central banking industry. It looks like other gulf countries including the UAE (United Arab Emirates) are going to be involved as well which could be really huge for Ripple. One thing that many have said though is that none of these banking organizations involved are really interested in XRP. They are using Ripple’s network but these transactions are not being funded or traded in XRP itself.
Some industry analysts have speculated that Ripple’s relationship with big banks is so strong that it may have strong incentive in the future to literally kill/dissolve XRP.
Despite this my outlook on Ripple is strong with the reservations about it mainly being a tool for large banks. Don’t get me wrong, the technology works well for transactions in terms of being low-fee, fast not having to sync the blockchain, very secure (aside from no first party wallets….) but can we trust this company to protect our interests and those of its large banking clients?
I think this is why Ripple has been volatile itself, from an investment standpoint it sounds great but also bad because Ripple is kind of a crypto-rebel by essentially being the tool that cryptocurrency was meant to fight or free us from (the tool of big banks and now Saudi Arabia’s central bank.).
To look at it from the other perspective though this could mean a huge rise for Ripple in valuation but it could also mean the opposite. Ripple has carved out an incredible niche but at the same time risks alienating its main users and investors. The question is what will Ripple as a private and centralized blockchain do?
I do agree the author of the quoted article above could very well have it right for the end game. It’s a shame because Ripple solves a number of key issues while also introducing security and trust issues at the same time. Ripple works well but will it literally sell us users and investors out to central banks in the future?
I’ve attempted to play the lotto and will seek Ripple’s comment on these concerns but regardless of assurances only time will tell where things head.
One aspect of cryptocurrencies that some users aren’t aware of is that decentralized blockchain based currencies are in their own ways their own worst enemy. The blockchain is the problem, as currencies like Bitcoin and Ethereum keep getting slower due to their limited transactions per second, and the blockchain gets large this has started the end game. The end game is clearly spelled out in Ethereum’s current white paper and it’s that essentially the blockchain will get so large no small players (individuals) will be able to participate. This is because all transactions are stored in the blockchain ledger, and the more transactions the larger it gets. Eventually the blockchains will grow to several terabytes and require more memory. This will mean that only big corporate, government and banking players will have the resources to control these so-called decentralized currencies. It is really inevitable unless a mechanism is adopted for off-loading this storage to trusted third parties.
I may not be a huge Microsoft fan but I think Ankur Patel has stated what many in the cryptocurrency already understand to be correct.
Patel said that blockchains that increase network capacity through on-chain scaling, which involves raising the blocksize, will eventually experience degraded centralization and will not be able to function on a “world-scale.”
This is something that Stellar Lumens and Ripple essentially do. They are a centralized blockchain that are generally faster than the competitors but are centralized and literally supported by big corporate players and banks. These have pros and cons. As an investment they are an excellent hedge against threatened regulations that people fear for the decentralized currencies and they also provide real value and work very well.
Is this all bad? It’s hard to say because public blockchains can be attacked literally with DDOS/SPAM/bad blocks and this has happened with all the major currencies. On top of that you are still giving up trust to unknown people and the value and stability of these currencies are at risk for other reasons such as hardfork cash grabs like Bitcoin Cash and the Bitcoin Gold Group.
The future is bright for crypto but these uncertainties need to be accounted for and sorted out. It may be that the future is going to involve a combination of foundations and semi-decentralized currencies.