Updated: Oct 19, 2020
There are 7000+ Cryptocurrencies out there, with more added daily. So what is XRP and why should I keep my eye on it?
This may be the greatest technology of our century! Keep reading to find out more.
XRP is a digital currency designed to solve the "Cross Border Transaction" problem for everyone.
When I was a teenager my parents and I moved to Karratha, a regional mining town in the North West of Australia . During my time living there, I met some Sea Farers. These lovely people spend two thirds of their life working on large iron ore or LNG ships and these particular men would send money back to their families in the Phillipines.
The thing that shocked me most was that they spent 30% of their annual income on fees. That took my breath away. These men and women, who risk their lives on the sea, have 30% of their income eaten away to international transaction fees. That's after income tax too.
What a tragedy!
Why do banks charge so much on fees?
The current model of sending cross border transactions is called the "Correspondent Banking" model. It relies on Nostro (our money in your account) and Vostro (your money in our account) accounts.
Millions of dollars of capital, is left dormant in the Nostro and Vostro accounts, meaning it cannot be used except for transactions.
When a customer makes a transaction it goes through multiple banks and each bank takes a cut of the money.
It can take around 3 days to go through. In most cases it is quicker to put the money in a suitcase and hop on a plane.
You can see how it works here. It is built on trust, and the sender has to carry the expense.
In recent years Australia has adopted the Pay ID method of transfer. This has improved things for us here, but cross border transactions is still a huge issue for the world. It is a $6.4 Quadrillion problem that Ripple (the company) seeks to solve with XRP (the digital asset).
XRP is a cryptocurrency token that has the potential to drastically change the financial world.
Banking is a huge industry that impacts us all.
Ripple (the company) is not trying to defeat the bank, but to work alongside it, using the XRP token that was created by Arthur Britto, David Schwartz and Ryan Fugger.
So why is XRP the best choice for fixing this problem?
XRP is fast, using almost no energy, and can scale to the same amount of transactions as VISA. It is "Trustless" meaning that the sender doesn't need to trust the recipient for the transaction to go through safely.
That is game changing.
Ripple: XRP 57,000 times more environmentally friendly than Bitcoin and Ethereum.
Ripple's website has some great graphics explaining the technology and use case, such as these.
XRP has never missed a transaction, compared to the SWIFT banking system which has a 5% failure rate. Bitcoin has also had issues closing transactions. Bitcoin Cash has had 51% attacks meaning that the same coin can be spent twice.
XRP however, has powered on, without issue. Backed by an excellent team who seeks to turn Ripple into the global reserve currency.
Global Reserve Currency? Are you kidding me?!
But isn't the global reserve currency the US Dollar right now?
Yes, yes it is.
Ripple has the ambitious goal to solve the Cross Border transaction problem by becoming the Global Reserve Currency.
XRP is perfectly positioned to serve as a world reserve currency. It can be held in significant quantities to provide liquidity for foreign exchange reserves, international transactions and investments, and all other uses throughout a global economy. Click here to read the Medium article
XRP has a total supply of 99 billion coins. Which means as the price increases, this will be sufficient liquidity to work as a global reserve currency. But guess what, it gets better! Each transaction only takes seconds which means that the coins can be used multiple times per minute to help transfer funds across borders.
Here is a photo of the CEO of Ripple Brad Garlinghouse at an event where he pitch Ripple and XRP to Christine Lagarde the Director of the International Monetary Fund (IMF). The IMF helps countries when they are in trouble financially.
I don't know about you, but I feel like I just stumbled across the next Amazon. This is game changing for the world.
It will help the poor because they will pay less on fees, it will help the rich because they can increase their margins. It will help anyone who needs to send money overseas, which in the age of globalisation is almost everyone.
What does this mean for Investors?
Disclaimer: I am not a financial advisor, this blog is a way for me to document my journey of researching different blockchain projects. Don't invest solely on what I say, do your own research, and invest at your own risk.
In terms of investing, we are at a unique period of history, where Ripple is live in 55 countries and yet the coin is only at $0.35 AUD at the time of writing.
This game changing technology is only $0.35 a coin, compared to Bitcoin which at the time of writing is at $15,978 per coin. (I will write more on this in the coming weeks.)
All I want to say is that I believe that XRP will make a good long term addition to a diversified portfolio of assets. It may take 5 years, but the amount of work that Ripple is putting into solving this global problem is astounding, and if you want to beat the bank interest rate of less that 2% per year, I feel this is worth doing more research on.
It is not a get rich quick scheme, it may take months, it may take years. But if you believe it is solving a problem for the world it should benefit your investment portfolio long term.
Why do I care?
I am passionate about Ripple and the XRP token because I think it is good for the world.
I care, because I want good things to happen to this precious blue and green ball that we live on.
Plus, I believe it will help my Sea Farer friends who sacrifice it all to care for their families. I wish that people taught me this stuff in high school and that's why I sit here after a long day at work writing this article. Because I want you to at least have the choice to know about it.
Don't fall for the scams out there. Do your own research and take control of your financial future.
Go well my friend, contact me if you have any questions or want to know more.
Disclaimer: Some of these links are affiliate links meaning that money spent on them will support this blog so that I can bring you more content.
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