With the advent of cryptocurrencies, the concept of money has changed considerably over a short period of time. Ripple, otherwise known as XRP, is a unique cryptocurrency. Like other cryptocurrencies, ripple relies on decentralization of control. Unlike most other cryptocurrencies like bitcoin, Ripple is based on hash-tree instead of blockchains. Also, unlike most other blockchain-based cryptocurrencies, Ripple can not be mined.
History of Ripple
Jed McCaleb is credited for the introduction of Ripple. Along with Arthur Britto and David Schwa,
he started with the idea of Ripple in the year 2011 and launched it in 2012. He had a huge success launching this cryptocurrency. Ripple met with larger than expected demands. More than a hundred banks committed to use Ripple.
Over the years, Ripple has increased in value despite multiple lawsuits against it. Its price peaked in the year 2018. At that time, ripple reached the peak valuation of dollar 3.65 per token. On April 1, 2021, ripple had lost some of its value, with the price of that time being 1.59 US dollars per token. However, this price has decreased further in 2022. As of now, in the year 2022, Ripple is valued at 0.68 US dollars per token.
Application of Ripple
Not only as a form of cryptocurrency, but Ripple exists as software also. Individual users and financial institutions can exchange assets using the Ripple software. Ripple offers very low commissions for currency exchange. There are a lot of currencies that cannot be converted to each other. So, banks rely on placing US dollars as a mediator to exchange one currency for another. This results in currency conversion for two times over a single transaction. So, this process is inefficient and expensive because of double currency exchange commission. When using ripple software, the ripple cryptocurrency can be used as a mediator itself. Also, it avoids the problem of double commission. Because of the efficient design of ripple infrastructure, the transaction times are much faster on average compared to that of bitcoin. Ripple also uses Xcurrent as a messaging system designed for financial transactions. This is a much more modern and efficient messaging system than old ones like Swift.
Ripple can be bought on an exchange. It can be perceived as trading traditional money to obtain a cryptocurrency. Ripple token prices are usually listed in US dollars when buying at an exchange. Like equity exchange, if the ripple price increases, you can profit by selling it at a higher price. But be aware that you might incur some loss if the price of Ripple falls. You can trade Ripple via spread bet and CFD account as well. This works by not taking real ownership of the cryptocurrency. Rather, it is a position whose value will correlate to Ripple’s price variation.
The advantage of trading via a spread bet and a CFD account is that you do not need to pay the full value of the cryptocurrency. You would need to pay if you owned it. This gives you financial freedom with a relative safety net over a highly volatile cryptocurrency market.
Factors that affect the price of Ripple
The Cryptocurrency market is currently volatile as it is a pretty new concept. People are not fully comfortable with decentralized control over the currency. Also, its existence as a digital object, instead of physical notes of traditional currencies, makes people conservative. So, crypto currency price varies a lot in accordance with the demand and regulations in different countries. Here are a few factors you should be aware of that can affect the price of a cryptocurrency like Ripple.
- Technology- One advantage of Ripple lies in its technological infrastructure, independent of its existence as a cryptocurrency. This gives Ripple an advantage where banks are interested in using ripple technology to exchange traditional money.
- Media- Public opinion over traditional and social media can greatly affect ripple prices.
- Regulation- Depending on government regulations on cryptocurrencies, ripple prices can vary. A cryptocurrency-friendly law can shoot its price upwards, whereas a ban can make its price crash.
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