Pros and Cons of Investing in Ripple, Will It Be a Millionaire Maker?
Before investing in Ripple, it’s vital that you understand what it is that you’re getting into. Ripple is not just another form of currency, like Litecoin or Bitcoin, but a new kind of payment protocol intended to streamline international and cross-border payments around the world.
The pros of investing in Ripple
It can revolutionise international banking
Cross-border banking is a slow and cumbersome business, with payments often taking up to a week to clear the current system, and some transactions going missing along the way. Ripple’s blockchain technology and payment protocols propose to make such transactions secure, instantaneous, and traceable.
While only a handful of financial institutions currently use Ripple’s protocols, over 100 have agreed to test their system with a view to implementing.
Currently trading at $3.00 per coin, XRP is an affordable entry point for those investors who are intimidated by the huge prices of Ethereum and Bitcoin.
The cons of investing in Ripple
Allocation of altcoins
Unlike Ethereum and Bitcoin, all of Ripple’s XRP coinage is premined, meaning that no more coins will be released to the market. This has resulted in its developers owning a substantial percentage of them (Ripple chairman, Chris Larsen, currently holds almost a third of all XRP), which is a concern, as it runs counter to the idea of decentralisation which is core to the cryptocurrency philosophy.
Ripple’s biggest rival is SWIFT, currently the largest international payment network and the preferred choice of some 11,000 financial institutions. Ripple will need to convince the notoriously Luddite banking sector that its payment protocols offer a better, quicker, and safer solution than SWIFT.
Will Ripple be a millionaire-maker?
In a sense, it already is – XRP has a market cap of $124 billion at the time of writing and, as we have discussed, this continues to rise as the application of its payment protocols becomes more widely adopted.
Being a finite resource, the value of Ripple is likely to increase further, as scarcity tends to promote growth in price, but it means that you might need to get in at the ground floor with a substantial investment if you hope to see a significant return.
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