Ripple price falls but XRP makes a splash with mainstream finance firms

Wednesday, January 31, 2018
By Paul Martin

RIPPLE endured a night to forget after losing 17 percent of its value before a sluggish recovery kicked in. Ripple has however been boosted by a number of firms now piloting the use of the cryptocurrency, also known as XRP, for money transfers, increasing the likelihood of its adoption by major financial institutions.

Wed, Jan 31, 2018

XRP dropped from $1.26 to $1.05 during a frantic night of selling after markets were seemingly spooked by the week’s string of regulatory threats and cyber attacks.

Ripple is now on the road to recovery with the price at $1.15, reducing the percentage loss to nine percent from 17.

The cryptocoin’s market cap (total value of coins in circulation) stands now above $44 billion, however this price has fallen a long way from the $96 billion market cap on January 8, when Ripple’s price hit its $4 high.

However, if the short story around Ripple is of price volatility, the long story concerns increasing popularity with mainstream finance firms working in the money transfer space.

XRP made headlines earlier this month when remittance giant MoneyGram came knocking. That news has now been followed by news that Mercury FX and telecom provider IDT have also signed up.

Ripple’s movements towards mainstream adoption has sent a signal to early investors that there is a long-term plan for XRP if and when the speculative bubble bursts.

Investors believe that ripple has a number of advantages under the bonnet that give it a critical advantage over competing currencies when it comes to environmental implications, transaction speeds and cost.

A Ripple spokesman told last month that XRP was designed with the ambition of removing the flaws of other digital assets, like bitcoin or ethereum.

On its closest rivals, the he said: “In addition to being slow and costly to use in transactions – taking anywhere from an hour and $30 to settle – these digital assets also use an incredible amount of energy because they are mined.

“XRP, on the other hand, is designed to settle quickly – in seconds; inexpensively – at fractions of a penny; with minimal energy consumption.

“This is because XRP transactions are validated through a process called consensus, versus proof of work – mining, which bitcoin and Ethereum rely on.

“As a result, XRP doesn’t consume much more energy than a regular server. XRP is the only digital asset out there that does, as far as I’m aware.”

However, critics of Ripple are quick to point out the cryptocurrency firm actually owns some 61 percent of the issued XRPs, making it very difficult to form a working value of something, over half of which sits in a pot, unused and un-tested.

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