Ripple’s XRP may be grinding lower at the time of writing. However, this digital asset has shown great potential to the extent that experts and analysts in the market see it becoming the king of cryptocurrencies by displacing Bitcoin (BTC). The digital asset is issued by the San Francisco-based blockchain company, Ripple. The company has for a while now been referred to as the “banker’s delight.”
Bankers across the globe have grown a liking and a preference for XRP. Ripple’s blockchain system provides an alternative to the traditional money transfer system, SWIFT. The banks are growing weary of SWIFT due to the high cost of international transfers coupled with the long time taken to process and complete transactions. What XRP offers the commercial banks and other payment institutions is the ability to send money across the border almost instantly and at a minimal cost as possible. These two factors save the banks money while the blockchain technology increases the transparency hence increasing customer trust.
While Bitcoin was the first cryptocurrency to be introduced, it has been faced with various challenges that have hindered it from competing with fiat systems like SWIFT. For instance, Bitcoin (BTC) takes about 10 minutes to process a block of transactions. Moreover, the transactions fees are not only high but also unstable; a feature that keeps banks and payment institutions at bay.
Bitcoin has been improved over the year to solve some of the above issues. However, for a large digital asset, it is not easy to carry out upgrades due to the large community. Upgrades in the protocol have always resulted in hard forks that rarely solve the challenges facing BTC. Therefore, the biggest question is, can Ripple’s XRP overtake Bitcoin and take over leadership in the market in terms of market capitalization?
The above question is not a straightforward but we will try to remain as factual as possible. The adoption of XRP across the world is immense. The company said in mid-2018 that it has control of more than half of India’s market. In addition to more than 100 partners registered with Ripple’s RippleNet. Recently, Ripple announced its entrance in the Middle East by setting up an operational base in the region’s economic hub, Dubai. Similarly, the company is currently courting the expansive Asian region. An executive of the company said earlier this week that Asia has a high appetite for XRP and both RippleNet and xRapid solutions.
What makes XRP tick?
Ripple boasts of the fact that its protocol has no forks. The digital asset is governed by a team of professionals within a professionally run company that has been registered and currently based in San Francisco, United States. Forks in the Bitcoin community are a hindrance to growth in terms of protocol upgrade and other related improvements. While most hard forks lead to the creation other assets, Bitcoin tends to get stuck with its challenges thereby limiting adoption. The business community is still struggling to accept BTC as a form of payment 10 years since the first Satoshi paper was published. This is continuously eroding both merchant and customer confidentiality in Bitcoin being a new currency system in the global economy.
What is stopping XRP?
The current 2nd largest digital asset, XRP has not been cleared from being a security token. Regulators have not made up their minds either to categorize the asset as a security or a cryptocurrency. This has for the longest time held XRP back, for example, the largest exchange in the U.S. Coinbase has not listed XRP as a tradable asset. If the asset can get cleared, XRP is likely to continue with its exponential growth to the point that it will surpass Bitcoin’s market capitalization. The introduction of an XRP ETF will be a huge boost as well.