XRP is a different cryptocurrency, as it was never created to serve as a standalone currency. The digital coin was created to serve as a moderation layer when making transactions using the Ripple Lab platform. As such, XRP only exists within the platform and is mainly used to cover transaction fees or as a bridge currency. Additionally, XRP token does not have life of its own when it comes to cryptocurrency exchanges and has managed to achieve the impressive feat of becoming a top 3 cryptocurrency. XRP value has also shown impressive gains in the last few years from its launch and more is expected in future.
This guide will help you understand the XRP supply, factors that affect XRP value, as well as future forecast.
Since 2012, Ripple has methodically sold XRP and used it to incentivize market maker activity to increase XRP liquidity and strengthen the overall health of XRP markets. To alleviate concerns surrounding XRP supply, the platform placed 55 billion XRP into a cryptographically secured escrow account. By securing the lion’s share of XRP, people can mathematically verify the maximum supply of XRP that can enter the market.
How the escrow feature works
The feature allows users to secure XRP for an allotted amount of time or until specific conditions are met. For instance, Escrow allows a sender of XRP to put conditions on exactly when a payment can be completed, so the payment remains cryptographically locked until the due date.
The platform uses Escrow to establish 55 contracts of 1 billion XRP each that will expire on the first day of every month from months 0 to 54. As each contract expires, the XRP will become available for Ripple’s use.
The total XRP held by Ripple is 6,886,283,931
The total XRP distributed is 40,205,513,967*
Total XRP placed in Escrow 52, 900,000,024.
Factors affecting XRP value
Whale bots- there are thousands of very BIG holders who have software performing trades on their behalf on every exchange, in real-time, in virtually every asset. Due to their sizeable positions, they create buy/sell walls (some visible, some not),and they artificially dampen the price with thousands of micro sales during periods of low volatility to make the price seem like it’s crashing, shaking out loose hands so they can lap up your cheap XRP, etc. These holders may be 90% responsible for the price volatility we see.
Underlying technology: XRP was created for instantaneous, secure multi-currency transactions, based on a blockchain protocol similar to that of Bitcoin. However, unlike Bitcoin, Ripple Labs has its sights set on disrupting the digital payment industry by reducing both processing times and transaction fees. Moreover, XRP can be used to exchange currencies with other tokens of value, such as frequent flyer miles or mobile phone minutes, using the token as a moderating currency. Since it’s in constant use, there is relatively a large number of XRP in circulation, totaling to more than 30 billion tokens.
Ripple labs specializes in remittances, which means cross-border payments. Prior to Ripple Labs, the SWIFT system of international payments was virtually without a competitor. The system is being made redundant right now. RippleNet, the patent technologies underlying XRP, transfers money almost instantly, to any city on earth, whether that be XRP or USD or any other currency.
Ripple Labs technology is world class. In 2017, the platform announced some big contracts and some big testing partners such as the US Federal Reserve and English Central Bank. Also, Ripple Labs and European banking clientele were involved in moving hundreds of millions of US dollars across borders.
RippleNet is also being marketed well in the largest remittances market on earth in Singapore. The Monetary Authority of Singapore (MAS) revealed that RippleLabs was one among a number of blockchain companies as the MAS conducted its blockchain experiment. The Standard Chartered of Singapore and AXIS Bank of India have been suing RippleNet to send money across borders. The trouble is that none of this is increasing the use of XRP.
Ripple Lab’s success is undeniable, with dozens of banks using its services, including international brands such as Bank of America and Santander. While its market capitalization is in the billions, the majority of the currency is held by Ripple Labs, which gives a great control over XRP value. For instance, if Ripple Labs decide to raise capital by selling XRP tokens, this could cause a tremendous shift in XRP value, as the market will be flooded with new tokens.
However, according to Ripple Lab CEO Brad Garlinghouse, the introduction of new coins into circulation will be made gradually to avoid surprising investors.
XRP value prediction
XRP may open the market with the rate of $0.78 and may reach $1.10 till the middle of 2019. Next year, it may be having independent trading platforms and investment routes like Bitcoin and Ethereum, closing the rate to around $1.20 by the end of 2019. The coin may be a tough competitor to other cryptocurrencies such as Ethereum and Bitcoin.
Some developments that may see XRP’s price reach the heights as predicted include:
- Ripple Inc is developing newer and newer technologies which can propel further the adoption of its payment protocols, it is consistently trying to increase the adoption of its Xcurrent, xVia, and xRapid protocols. It’s also trying to integrate these with XRP. With increased adoption of these technologies, the XRP value will increase further as well.
Even though the crypto market is highly volatile but with many upcoming partnerships, XRP does hold greater value. Since it was launched, XRP has successfully reached the top 3 cryptocurrency position and continues to increase its value. Additionally, with increased adoption in the real world, XRP’s price will soon surge in 2019.