(Updated September, 2018) Promising “to do for money what the internet has done for information,” Ripple, a cryptocurrency introduced to the world in 2012, is set to disrupt the banking industry in an unprecedented way. Not only is Ripple a coin of value, but it is also a payment processing system that is meant to overthrow the current incumbent system serving banks ever since 1973, the SWIFT system.
It is for this reason that Ripple has been adopted by several large banks, including UBS and Credit Agricole. Due to this wide adoption by public investors, large venture capitalists, and big banks, Ripple has the third largest market capitalization within the cryptocurrency space, standing at 16 billion dollars. Where this capitalization will go from here is anyone’s guess. Nevertheless, we can make a few educated Ripple price predictions for 2018 based off of the information we have today.
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Probably you are here because Ripple is now at $0.27 when one month ago was at $0.41; 7 months ago it was $3.8 and in January 2018 Ripple stood at $2.26. Let’s not forget that one year ago today Ripple was $0.217. Before we delve into the topic at hand, it is important to understand the difference between Ripple and other cryptocurrencies as well as how this difference might affect Ripple’s price moving forward. To start with, although cryptocurrencies are built on blockchain technology to combat the double spend problem, the way this blockchain technology functions differs from one cryptocurrency to another. For instance, Bitcoin uses what is known as proof of work (PoW) to validate a block, whereas other cryptocurrencies, most notably DASH, use an algorithm called proof of stake (PoS).
Remarkably, Ripple uses neither proof of work nor proof of stake. Instead, it uses a unique consensus protocol that is more scalable than anything Bitcoin has to offer. To put matters into perspective, while Bitcoin can process seven transactions per second, Ripple has the ability to process 1500 transactions in the same second. Furthermore, this scalability is complimented with speed. In other words, a single transaction on the Bitcoin network can take up to 60 minutes to process, but the same transaction on the Ripple network will be done in a matter of second.
However, Ripple’s true genius lies in its ability to refurbish an old method for modern purposes. As a matter of fact, Ripple relies on a system for its payment processing that is reminiscent of the Medieval process of “Hawala,” where financial intermediaries were used to make payments and remittances seem instantaneous. What’s even more interesting is that the Ripple network can be used to trade any asset with any other asset. Consequently, just as two people dealing in two different currencies can interact through the Ripple network seamlessly, two people holding entirely different asset classes, let’s say gold and agricultural products for example, can perform a trade on the spot, so long as there are intermediaries who are willing to facilitate this transaction.
Naturally, you should be wandering what this all costs. After all, a network that can help you trade in any asset class, at any time, and at near instant speed must cost an arm and a leg in transaction costs, right? Yet, this is not the case. Transaction costs are minimal, and they are incurred to prevent someone from spamming the network (which means that these transaction costs are used to make sure that people performing a transaction are serious about it, rather than just overloading the network for their own malicious purposes). Interestingly, the money deducted during every transaction is destroyed altogether. Regardless, you shouldn’t worry because the total amount of Ripple coins that will be issued is 100 billion dollars, so losing a fraction of a fraction of that during every transaction is a minuscule price to pay.
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1. A Ripple Coin May Reach Five Dollars or Even Hit the 10 Dollar Range
When I first wrote this article the price of a single Ripple was hovering around the 70 to 85 cents region. It was at $3.8 and now is back at 40 to 45 cents region. With the news coming from South Korea saying that they will ban cryptocurrencies it’s hard to do any predictions. What I can say is that it can easily go back to $3.8 since in the last few months from total market cap almost 600 billion USD disappeared. If those big players come again into the game it can even go to $5. You can do the math by yourself using the number of coins, the price, and the market cap. It’s hard to go higher because, at $7, the capitalization would be higher than bitcoin, I doubt.
We have to agree that Ripple superior technology makes it an excellent candidate to replace the antiquated SWIFT system, resulting in more and more banks getting on board the Ripple train. Over and above, there have been rumors that Coinbase, the famous cryptocurrency exchange, is planning on adding Ripple to its list of tradable coins come mid-2018. Considering the fact that Ripple is now in the third spot as cryptocurrency this prediction is close to real. Should these rumors be true, this would make Ripple more accessible to public investors, which should increase its adoption rate. Hence, five, or even close to $7 dollars is a fair Ripple price prediction.
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2. If Ripple Manages to Become the De Facto Payment Processor for Banks, It Is Possible for Ripple to Hit the 20 Dollar Mark
Although this prediction is a bit more forward-looking than 2018, this year will dictate how things play out in the future. In other words, in the event of Ripple delivering on its promises of speed, scalability, and low transaction costs, it should come as no surprise when several banks decide to switch to this powerful platform and start relying on it. If that’s happening, for sure the price will increase. It really depends on how many people will invest, if the total market cap would jump to 1.5 trillion USD for sure there is room to climb for Ripple.
To get a sense of how big a market this is, it is worth knowing that the U.S. Treasury estimates that the SWIFT system facilitates the transfer of 5 trillion dollars a day, which roughly translates to 1.25 quadrillion dollars a year! With a quadrillion dollar market that is ripe for the picking, it would come as no surprise if someone accused our Ripple price predictions for 2018 of being conservative. Don’t forget that it can be very risky. If after implementation something goes wrong with these transactions it will fall for sure!
3. Like Everything Else, Ripple Has Some Downsides That Cast a Shadow on Its Otherwise Bright Future
Apart from all the problems that plague the whole cryptocurrency space, which we’ve covered in our Bitcoin price predictions for 2018, Ripple has its own issues to struggle with. For one thing, its future supply of 100 billion coins may pose a hindrance to the appreciation of this currency. In comparison, Bitcoin is planned to have 21 million coins total, and Ethereum is destined to max out at 100 million, allegedly.
To complicate matters further, Ripple’s position as the preferred payment processor for banks may alienate some of the more mainstream investors. After all, plenty of avid fans of blockchain and what it stands for (decentralized currencies and all that) decried a cryptocurrency meant to support the banks.
Ripple is a budding cryptocurrency that is showing plenty of promise. Regardless, similar to other digital coins, its price has been experiencing some volatility, though nothing compared to what Bitcoin has been going through lately. Given its advanced technology and reliable infrastructure, Ripple is expected to shoot past several other cryptocurrencies, and if banks adopt this technology as several experts are predicting, the sky is the limit.With that said, the abundant supply of Ripple coins along with the networks focus on serving the banks may prove problematic.
As always, making Ripple price predictions for 2018 is a very tricky subject, and a lot of it is speculative. Yet, it is always important to make do with what we have. Bearing that in mind, tell us what you think in the comments below, and let us know whether you think we missed anything. Also, how do you think Ripple compares to other cryptocurrencies? Would you invest in it, or do you have your eyes set on another coin?
What is your opinion about the Ripple predictions for 2018? What price do you estimate for Ripple? Thanks for reading!