XRP has proven a safe harbor during this week’s market downturn. Ripple’s strategic partnerships, technological advancements, and community enthusiasm have allowed the cryptocurrency to gain footing in the market, resulting in a stellar 2018 performance.
In the last seven days, the markets have plunged by 18 percent. Yet, XRP has fallen a modest 3.2 percent. Not only that, XRP has outpaced long-standing incumbent Ethereum to claim the number two spot by market capitalization.
What has lead to Ripple’s recent outstanding performance are its tangible use cases in the financial sector.
In contrast to the uncertainty and scalability of blockchain currency, such as Bitcoin, or lack of institutional application, such as Ethereum, Ripple is demonstrating mounting traction.
Ripple is a settlement system and remittance network originally created by Chris Larsen, Jed McCaleb, and Arthur Britto under the company OpenCoin. OpenCoin changed its name to Ripple Labs in September 2013, and Arthur Britto left the company early on.
XRP was originally released in 2012. The platform purportedly enables “secure, instant and nearly free global financial transactions of any size with no chargebacks.”
Ripple Labs released XRP in January 2013, creating 100 billion coins. Of those 100 billion, 80 billion were allocated to the company and 20 billion were split between the two founders.
During the first major round of fundraising, the company was able to secure funds from Google Ventures, Andreessen Horowitz, Jesse Powell–founder and CEO of Kraken, and a host of other investors.
In July 2014, a schism between the two founders spawned Ripple’s open-source competitor, Stellar Lumens, with McCaleb taking the helm of the new protocol.
By September 2016, the company gained enough momentum to raise $55 million from Japan’s leading online retail stock brokerage, SBI Holdings. In the exchange, the company sold 10.5 percent of its stake in Ripple.
Ripple Continues Its Traction
Fast forward to 2018, Ripple has gained considerable momentum with a high-caliber lineup of customers, including American Express, Santander, RBC, IndusInd Bank, and many others. Ripple has substantially more large-scale institutional customers than any other cryptocurrency.
During November 2018, Ripple has maintained its steam. The company announced a key partnership with ASEAN’s fifth largest bank, CIMB Group. In a statement from CIMB’s CEO, Zafrul Aziz:
“We’re seeing banks and financial institutions from across the world lean into blockchain solutions because it enables a more transparent, quicker and lower cost payments experience”
During November another key partnership was established with Japanese bank and financial services company Mitsubishi UFJ Financial Group (MUFG). In a press release , the company said it would use XRP to handle cross-border payments with its subsidiaries in Brazil.
Other proponents at American Express say that Ripple has the potential to replace costly and slow banking systems such as SWIFT and wire transfer.
As of 2015 , the incumbent technology SWIFT links more than 11,000 financial institutions in more than 200 countries and processes over 15 million transactions per day. Ripple could disrupt this entire system.
What Ripple brings to the table is a unique blockchain-based technology. Instead of standard proof-of-work (PoW) consensus, Ripple uses a consensus ledger managed by a network of unpaid volunteer validators.
These validators compare transaction records, and then based on supermajority, determine the order of these transactions and address double-spend issues. Proponents of this system say it is more secure and doesn’t ‘wastes’ electricity like a PoW system.
Not only is the method of consensus unique, but Ripple’s technology is also getting real use. Ripple’s xCurrent is already helping banks settle international transactions. The technology allows for real-time cross-border payments, reducing settlement time from days to seconds. And just last month, Ripple’s introduction of xRapid substantially increased transaction throughput on the platform.
Ripple is continually upgrading these features, with xCurrent 4.0 bringing a slew of additional improvements. These real-world applications and improvements set Ripple apart from other speculative projects.
Another boost to Ripple’s popularity is the recent enthusiasm of the Ripple community. Many of Ripple’s supporters have been emphatic on Twitter, and many former critics have been converted to advocates.
In a community blog post, Ripple enthusiast Eric Dadoun paints a rosy picture for the future of Ripple:
“Those of us in the XRP community should rest assured. There is no need to guess as Ripple, the IMF, banks, and others are no longer being shy about what’s coming. The future is being painted for all of us to see.”
A popular XRP proponent, @XRPanda, had this to say:
While the market is bleeding, hashwar is going on, btc having hashrate, scaling & centralized issue.#Ripple is moving forward, gaining new customer each week, & showing the world how a legit blockchain technology & cryptocurrency can benefit everyone.#XRP #LetsRippleTheWorld pic.twitter.com/0VqyLTnlmS
— 🐼 PandaRippleXRP 🐼 (@RipplePandaXRP) November 21, 2018
And even Ran Neu-Ner, Host of the Crypto Trader Show and former critic, recently renounced his statement that “XRP belongs in the trash,” and has changed his tune with a string of pro-Ripple tweets:
I’ve made a lot of REALLY bad calls in the bear market but none as bad as the day I said that I would throw XRP in the garbage!
— Ran NeuNer (@cryptomanran) November 19, 2018
The optimism goes all the way to the top of the Ripple Labs. On Nov. 12, Ripple’s CEO Brad Garlinghouse told Bloomberg that “Ripple is solving a real problem… and this is driving excitement and enthusiasm.” He believes that as more and more companies enter the space institutional adoption will follow.
Although, Ripple still has its naysayers. According to the TransferWise CEO:
“If every bank in the world was going through the @Ripple network, it would be amazing. Yet how many banks are using Ripple today in production? It’s a very short list”
Furthermore, much of the controversy surrounding Ripple still exists. There are still ongoing debates in the Twitter community over Ripple Lab’s authority over the cryptocurrency, its majority ownership of the Ripple supply, its financial security classification, and its control over upgrades to the Ripple protocol. CryptoSlate will explore the allegations of Ripple’s centralization in an upcoming article this week.
However, with everyone fretting about their investments in Bitcoin and Ethereum, Ripple is quietly gaining traction in the background. This bear market has presented Ripple with an interesting opportunity to jockey for position in the race for institutional acceptance of blockchain technology.
Special thanks to Eric Dadoun (@EDadoun ) for substantially contributing to this article. The author of this article does not hold any XRP.
The post Ripple’s Success: Why XRP Held Fast Amidst the Crypto Market Meltdown appeared first on CryptoSlate .