XRP is currently the third largest cryptocurrency on the internet with a huge market cap of $12 billion. The digital asset has been tipped to overtake Bitcoin or get close to Bitcoin in some years or months to come. Its strength lies in how it has been designed to be adopted by banks. XRP gained popularity at the beginning of 2018 when it surged in price to record a little over $3. The next thing we hear is that XRP is very promising, and the team are working hard to achieve great things. Many analysts predicted the breakout of XRP when they observed that Ripple had partnered with over 100 banks. Well, this article will explain why XRP is a bit overrated.
It is essential to understand that XRP is not the same as Ripple. They are two different things. This situation is unlike Bitcoin which its community is the same as the currency. Ripple is the company, XRP is a currency.
First, Ripple has three products: xCurrent, xRapid, and xVia.
xCurrent helps banks to transfer money efficiently across borders, and it makes use of the RapidNet. RapidNet is the Ripple blockchain. xCurrent as a product does not use XRP.
xVia helps parties outside banks to make transactions through the banks. It does not use XRP either.
The only product that uses XRP is xRapid. xRapid helps to improve liquidity when entering emerging banks.
Out of the over 100 partnerships with the financial institutions, only one which is a none bank financial institution called Cuallix from Mexico uses the xRapid, and that is the last time I checked. The rest of the partnerships have to do with the xCurrent. When Ripple announces on their website that they have had a successful partnership with a financial institution, you should understand that the Ripple as a company is succeeding, but XRP which exists outside the company may have a little or no impact.
Also, the nature of XRP makes it very easy to fade out of the system just like some digital currencies in the past including Liberty Reserves. The Ripple company Controls 62% of the total XRPs in existence, this puts a question mark on its decentralized status or as a ‘centralized digital asset’. This makes it different from Bitcoin which cannot be controlled by any centralized party.
Regardless of this, XRP is an exciting initiative, and it is possible that many banks will adopt it and drive the price to the moon.