What’s up with XRP? It’s been a tough couple of months for the native token of the Ripple protocol. A looming lawsuit and persistent doubt over inherent value have seen price slide to $0.25 (or even lower, depending on which source you believe).
But is this as bad as it looks?
As I see it, there are a few causes for optimism. First, new announcements from Ripple – such as agreements with Western Union and MoneyGram – should help to alleviate concerns about the infrastructure behind XRP. Second, if we compare where we are today against Bitcoin at the same stage (around $3) then XRP is still in good shape.
And third, even with a few big wins under its belt, Ripple still have an opportunity to bounce back – Bitcoin’s market share is currently well over 80% while XRP sits at less than 1%. XRP could easily take over a substantial slice of the market, especially if it is adopted as a standard by the banking sector.
XRP analysis:
Ripple is gearing up to release their product for banks, the product that was rumored to be called RippleNet. But there’s just one problem: the company is currently being sued for patent infringement by MySpace. The case isn’t looking good for Ripple.
The lawsuit hinges on two patents that are similar in concept but not in detail: a system and method for transmitting currency from a first party to a second party over an Internet-based communication network and an open-source software system and method for inter-cryptocurrency exchange.
How does this affect XRP?
The core idea behind Ripple is that they are building a network – a network of institutions and protocols. These institutions will use their technology to communicate with each other in a way that makes the system faster, more efficient, and more effective. So it’s kind of like EMT (electronic messaging technology) vs. emails – email is an EMT device that uses several protocols.
Ripple’s technology is similar in that they are building a network of institutions that will use XRP as an intermediary means of transferring value. So, how does this make this affect XRP? Well, if the technology is able to be used for other currencies like Bitcoin, then there would be a lot less reason for people to use XRP. The product Ripple is developing – RippleNet – would be much less valuable if other coins were usable within the system.
So why did RippleNet get renamed to xCurrent?
It’s not clear what happened here. But one can speculate that their trademark may have been denied by the U.S. patent office due to the pending lawsuit filed by Myspace and that they didn’t want their new product’s launch jeopardized in any way by the lawsuit or possible delays caused by it. So, because the technology uses XRP in the backend to function – and essentially is a product of Ripple – they renamed it.
Now, that being said, let’s take a look at XRP’s fundamentals.
Ripple’s main goal is to create a payment protocol for banks. This would allow for instant cross-border transactions with minimal fees attached. They are creating this network altogether (the network of institutions using their technology) and have even made advances in building this network through partnerships with Western Union, Moneygram and SEB among others.
There are two things that could help this adoption: the number of partnerships Ripple will have with these institutions and the number of transactions that occur across these institutions. Ripple has stated their intention to reach 1 billion transactions per day – which is a substantial amount and will be difficult to accomplish – but if they manage it, it would mean even more demand for XRP.
What can be done to help XRP?
So, in conclusion, Ripple has been doing well with the announcement of partnerships with Western Union and Moneygram. They have also made an announcement that they have changed the name of their product (RippleNet has been renamed to xCurrent) but there is little explanation as to why. Still, the company has managed to gain partnerships and there are substantial plans for its product both in the future and today. The big question is whether this will be enough; it’s hard to say. But if you do want to follow XRP’s price action I would advise looking at Bitfinex’s USD pair which allows for 24h charting provided by CryptoCompare.com . . .
