Making it an incredibly enticing utility to invest in within the coming years.
While many investors are quick to loathe the recent dip in crypto prices across the board, Ripple price could easily be seen as one of the most disappointing. Specifically, as many of the other top cryptos have been seen to bounce back, XRP has been firmly hovering around its pre-April boom prices. Where many cryptos came out of the bearish market of 2020, and saw a marked uptick in prices around April and May of this year. While many seemed to maintain these new heights, Ripple prices seemed to plummet, and then stay put. Which could suggest that XRPs new-found market liquidity has other plans. Specifically, as many investors are not deterred by the seemingly stagnant prices, as Ripple begins to flex its technologically powered fingers across the globe as more big names invest in the global cross-border payment remittance system.
A Growing Network
Perhaps one of the most exciting aspects of using XRP remittance protocol as a global payment system is that of how the Ripple network reaches consensus. The network uses a decentralized consensus mechanism, similar to that of other cryptocurrencies, however, the systems achieve consensus at a fraction of the energy costs of that of other cryptocurrency networks. By using a consensus mechanism that relies on the votes of multiple secure servers within the Ripple network. As many votes on the validity of any given transactions, they are not required to run complicated mathematical algorithms in order to validate transactions. Which means that energy demands are much lower within the Ripple network, yet transactions are just as secure.
With most cryptocurrencies firmly under the glare of the eco-sustainability microscope, Ripple easily takes the lead when it comes to interest in a more sustainable sector. First quarter sales this year showed a 97% growth in XRP sales as confidence grows in the token’s remittance platform. While the infrastructure for the network itself has been around just as long as XRP has, this renewed interest and recent flurry of investment comes at a time when many businesses have moved online, following the pandemic of 2020. Which means more cross-border transactions, which is exactly where the Ripple payment protocol steps in to help.
The payment protocol, dubbed “ODL”, for On-Demand Liquidity, brings crypto technology to centralized banking structures, helping to speed-up cross-border transactions as well as reduce fees that would normally be associated with overseas transactions. The protocol also establishes these benefits with a fraction of the energy demands that are seen in other popular crypto validation protocols as well, making the XRP protocol hugely favorable to centralized services.
Traditionally, banks would either need to hold pre-funded accounts for overseas transactions, or go through a series of microtransactions within their own banking network in order to convert native fiat currency into its cross-border cousin. For example, simply transacting from USD to GBP can take weeks to achieve and incur fees that will sometimes top that of what is being sent. Which has many traditional users desperately searching for a better system.
With the Ripple remittance system, any currency in the world can instantly get liquidation within the XRP token system, which can then be sent and once again seamlessly converted into whichever currency is needed as the receiving deposit. While many cryptocurrencies are capable of providing exactly this service, Ripple is the only token to date that works seamlessly within pre-existing centralized banking systems. Something that has the interest of over 70 of the world’s biggest financial giants.
Supporting the Future of Finance
The protocol currently supports the currencies of 25 countries, to include places like Europe, SE Asia, Scandinavia, and parts of Africa. The newest addition to the token’s liquidity has Ripple Labs eyeing up many other countries to add into their list of provider states. The company has also partnered with a number of other historical cross-border remittance programs like MoneyGram, creating a more global network with speeds that triumph over those seen with more traditional remittance systems.
More than that, it also supports Ripples’ case as being seen and sold as a utility— something the company has been trying to prove since 2018 when the U.S. Security Exchange Commission (SEC) brought charges against the company for selling unregistered securities, labelling them as such. The years-long court case is looking to reach a conclusion sometime in 2022, but it has done little to deter investors in the ever-growing ODL system.