Ripple (XRP) is the 3rd largest cryptocurrency by market cap, behind Ethereum (ETH) and Bitcoin (BTC) in the top spot. The one assumption unseasoned enthusiasts may have concerns the fact that they believe just because it’s a top coin, with an established team behind, then XRP is an absolute buy.
Market cap and rank alone don’t tell the whole story. One needs to have a better look at the coin in terms of its project, use cases, and future outlook. From that, we get the pros and cons of buying the asset. Here are a few concerning Ripple (XRP)
Ripple (XRP) is a working product ready for mass adoption
The XRP protocol was piloted via the platform’s xRapid solution and results indicated that it indeed is fast and cheap. The payments were settled in less than 3 minutes and saved the transacting parties up to 70% in costs. This coupled with a highly scalable network makes the XRP product ready for global adoption. XRP has been determined to handle up to 1500 transactions per second, faster than its main competitor in the cross-border money transfer. As more tests and pilot results come in, XRP inches closer to gaining global acceptance which will impact positively on its future value.
The number of banks and other financial institutions that are partnering Ripple keeps growing every other day. The team at the company has overseen a huge marketing campaign that sees interest in the coin increasing. These mega-partnerships can only be great for the eventual value of the coin once adoption takes root. What these partnerships mean is that there’s inherent value in the product. even if the banks show reluctance in adopting XRP, their faith in the blockchain technology that powers that token means they endorse it. The impact is to convince more partners to come into crypto, potentially making long-term hodling lucrative. What partners like Santander with its payment app; MoneyGram, Mercury FX among others achieve with XRP would be great news for the investor community.
It’s affordable and stable
The XRP ledger has been in place for a number of years now. Although the company is criticized for making the crypto appear centralized, the stability of the technology and lack of upheavals makes the coin appealing for institutions and enterprises to start using it. In addition, XRP is affordable, priced at below a dollar. Investors who buy now know that the coin has the potential to rise to new heights. This possibility is made even more plausible with expectations that low prices attract institutions that can leverage the low prices and near-zero fees.
Apart from the pros, there are also cons associated with Ripple, which could make buying XRP a huge gamble or at least not worth the investment.
XRP use limited to xRapid!
While the Ripple team has done a great job in landing high profile partnerships, it’s unfortunate that many of them are banks which currently do not use XRP. The token is only used on the xRapid solution to provide on-demand liquidity. So, even though XRP is aggressively marketed by Ripple Labs, the reluctance by mainstream banks to adopt it means short-term value increase won’t be a straightforward thing.
Related to this is the competition Ripple faces from other crypto assets that provide similar functionality. For instance, Stellar (XLM) wants to achieve the same goal as Ripple and has partnered IBM, one of the major tech giants out there. There is also an increasing number of banks looking to have their own cryptocurrency solutions. While these may not derail XRP, it’s a possibility.
Regulatory grey zone
The threat of XRP and Ripple being declared one and the same entity has hung low and heavy on the crypto. It’s this that made the community initiate a drive to have the coin get a unique symbol. Perhaps, the fear that SEC could declare the crypto a security is holding back many would-be investors and partners- hampering genuine efforts at growth.
Ripple control over XRP
Ripple is known to own a huge amount of XRP, about 60% which gives them immense power. With 55 billion XRP of the total 100 billion locked up, you can guess how much hold the company could have over price movements. Selling huge amounts of these holdings to the partners definitely affects prices.
Conclusion: Buying Ripple (XRP) would be a good step, even if one or two of the cons stand out. Future potential to moon means it’s worth being used as an investment.