What Drove Ripple To Such A Success In 2017?

What Drove Ripple To Such A Success In 2017?

While bitcoin was literally everywhere last year, it was Ripple that fascinated the crypto community. It quickly surpassed other digital currencies mainly because Ripple managed to secure solid partnerships with major financial institutions.

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While bitcoin was literally everywhere last year, it was Ripple that fascinated the crypto community. It quickly surpassed other digital currencies mainly because Ripple managed to secure solid partnerships with major financial institutions.

Of course, Ripple’s actions faced fierce criticism from several renowned personalities. Erik Vorhees, CEO of ShapeShift, stated that the idea of cryptocurrencies is to escape mediators such as banks. According to him, Ripple’s partnerships tend to destroy the most valued feature of digital money – decentralization. He further added that the use of cryptos in banking is not innovative at all.

But what is Ripple, anyway? It is a San Francisco-based startup, founded five years ago. Since it is developing mainly instruments meant for financial payments. The coin the participants use during transactions in the Ripple network is the XRP. Bank of Tokyo-Mitsubishi UFJ, Mizhuho, Credit Agricole and Nordic bank SEB all use its network in some way, as announced by the company itself in October 2017.

Furthermore, Santander and American Express FX International Payments are using the Ripple network for trans-Atlantic money transfers between the United Kingdom and the USA. Other companies taking advantage of Ripple’s systems are several South Korean and Japanese banks. As Nikkei reports, if these pilots meet customers’ demands banks would begin sending money through XRP.

Canaccord Genuity’s analyst, Michael Graham admits the potential of the networks but also implies that Ripple must progress on a daily basis if they want to justify XRP’s price.

Last year, bitcoin faced a 1,500% growth but Ripple’s value skyrocketed by 35.000% at the same time. Thanks to its surge Ripple became the second largest currency by total market capitalization, pushing Ethereum to third place. Software engineer, Dan Ciotoli believes that many people invest in XRP because they think they buy stock shares but ironically this is far from the truth. Moreover, he questions XRP’s use in banking.

On the contrary, Ripple recently made a statement that the top 3 global money transfer companies had expressed their desire to join the Ripple ecosystem. Like most of the altcoins on the market, Ripple delivers faster transactions than bitcoin, which was the first blockchain-built cryptocurrency. The bitcoin network requires one hour to settle a transaction, the ethereum above two minutes and XRP transactions happen in just 4 seconds if what’s written on the Ripple website is true.

However, all of the mentioned distributed ledger technologies are way faster than traditional methods. But do you need cryptos in order to get your transfers on time? No, you don’t. Fintech startup TransferWise already provides faster transaction services than the conventional ones. In addition, they are cheaper compared to bitcoin’s transaction fees, for instance.

Ripple’s CEO, Brad Garlinghouse believes that tokens’ utility defines their value. Once a certain cryptocurrency becomes a regular payment method it will gain stability and fluctuations would no longer occur so often.

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