As someone who had predicted the rise of XRP, before the December 12th 2017 surge which propelled not only the price of XRP, but it’s presence in the mainstream media and also amongst average Joes, I am very concerned about the garbage being spewed about XRP. Both from lay people, and more depressing, from mainstream media “experts”. I want to point out the myths, and to dispel them.
Some misconceptions are very common and I won’t hunt down all the links to the mainstream articles which have made misleading comments, but some include major outlets such as this one from Yahoo, and also this one from Forbes. The points listed in the Yahoo article basically sum up a lot of the concerns from many XRP non-believers (could be a friend that’s on the fence, parents, family etc.), so I’ll go through them one by one. This is important, as we need to educate people so they understand what XRP actually does. So here goes:
” XRP was never intended to be a functional digital currency the way that bitcoin was. It is merely a utility: the banks or financial institutions that use Ripple conduct their transactions in XRP.” …”Never mind the fact that XRP is merely a back-end settlement token.”
- This is very untrue. It is a functional digital currency that has real-world uses, unlike Bitcoin for that matter. Ripple is powering forward to develop uses of XRP well beyond bank-to-bank. Future uses include:
“Ripple Labs owns 60 billion of the 100 billion XRP in existence (when you look up XRP’s market cap, those 60 billion are not included).”
- This is very misleading and was one of the initial reasons why many in the cyrptoland were unwilling to invest – because it’s manipulated, centralized and controlled by Ripple. It’s poor writing and reporting, as the writer didn’t include the fact that Ripple has locked up the majority of this (55 billion).
XRP is becoming too volatile that banks won’t use it (general concern, not from Yahoo article).
- According to David Schwartz of Ripple: “What they care about is holding cost, not really volatility directly. So long as the upside exceeds the downside, the holding cost can be low or even negative. Banks don’t actually have to hold XRP. They can use market makers who hold XRP and market makers can actually profit from volatility.In the short to medium term, it doesn’t matter all that much. We’re going to be choosing corridors that are so inefficient that XRP holding cost won’t be a significant factor. But over time, as we try to tackle larger and more efficient corridors, lower holding cost will make XRP more attractive.”
Banks don’t have to use XRP
- This is true for many things. You don’t have to take a plane to get from the USA to Australia, you can take a boat. But which is more efficient? See my previous article to understand why banks will adopt XRP (see the last figure, which illustrates the cost-effectiveness of using XRP).
- Banks in Asia have confirmed that they will be putting XRP to the test: “Japan Bank Consortium created a virtual currency and blockchain working group to explore the institutional use case of digital currencies, such as XRP, to source on-demand liquidity for these cross-border payments.”
There are too many XRP coins for it to ever be valuable
- First, since I first posted about the fact that XRP will rise in value, it has gone from 20 cents to today’s all time high of $1.90. The price is increasing. FACT.
- Second, to solve a trillion dollar liquidity issue, where SWIFT alone handles 5 trillion PER DAY (see previous blog post about this), the value and market cap of XRP will need to be high.
- Third, a great example is Air Miles, the value of which has grown so much since it’s inception that it exceeds that of USD or any other national currency.
- Lastly: Ripple XRP and market cap explained
XRP is a centralised bankers coin
- The CEO of Ripple, Brad Garlinghouse, has stated in a CNBC interview that XRP is in fact decentralised: “With respect to centralization, if Ripple (the company) went away tomorrow, the XRP ledger would continue to exist and trade. So it is decentralized.”
So there you have it, spread the news, and if you’re a holder of XRP already, don’t forget that as the value of XRP skyrockets, remember to store it safely. So don’t forget to store XRP safely by using the popular and trusted Nano Ledger S Hardware Wallet. Also, Amazon has a range of cryptocurrency wallets, accessories, and tools, as well as books on cryptocurrency investing.
For information on how to buy XRP, click here. If you have been chatting with colleagues, friends or family members, or anyone that is on the fence or uncertain about XRP, direct them to this article.
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Disclaimer: This post is my own personal opinion. I am not a professional financial adviser and am not responsible for your own investment outcomes.
Disclosure: At the time of writing this post, I hold units of XRP.
Categories: Ripple XRP