XRP (XRP), the cryptocurrency, also known as Ripple, still retains enormous value.
For example, Ripple (XRP) was CoinMarketCap’s sixth-largest cryptocurrency with a $23.897 billion Market Capitalization and a $46.270 billion Fully Diluted Market Cap on 1 May 2023. XRP also had a 24-Hour Market Volume of $918.480 million, a Centralized Exchange (CEX) Volume of $917.036 million, and a Decentralized Exchange Volume (DEX) of 1.335 million on 1 May 2023.
They base those numbers on a Circulating Supply of 51.751 billion XRP, a Maximum Supply of 100 billion XRP, and a Total Supply of 99.989 billion XRP. XRP was CoinMarketCap’s twelfth-most trending cryptocurrency with a Coin Price of 46.19₵ on 1 May 2023.
So What is XRP (XRP)?
XRP (XRP) is a decentralized cryptocurrency and decentralized finance (DeFi) protocol. They build Ripple’s finance applications in the XRP Ledger blockchain. A global network of over 150 nodes runs the XRP Ledger.
The ultimate hope at XRP is to create a global blockchain that can transfer money worldwide fast. In particular, XRP’s builders want to make international money transfers, cross-border payments, and remittances faster and cheaper.
Moving money across borders can be expensive. The typical remittance costs 6.3%, The World Bank estimates. Hence, it could cost $6.30 for a Honduran construction worker in Chicago to send $100 to his mother back home.
Such fees hurt some of the poorest people. To explain, waiters, laborers, cooks, maids, housekeepers, and other laborers send most remittances. Reducing such fees could save working people a fortune.
XRP could tap a Growing Remittance Market
Cutting reducing remittance prices could save senders $16 billion a year, The World Bank claims. Remittances are costly because most people use money transfer services such as Western Union (WU) to send them.
Remittances are a growing business. For example, remittances to low and middle-income countries grew by 5% to $626 billion in 2022, the World Bank estimates.
Digital remittances are growing faster. Statista estimates the transaction value of digital remittances grew from $55.95 billion in 2017 to $119.80 billion in 2022. The digital remittance transaction volume could grow to $135.20 billion in 2023, $148.40 billion in 2024, $159 billion in 2025, $166.70 billion in 2026, and $174.50 billion in 2027, Statista forecasts. Hence, the XRP Ledger could serve a growing remittance market.
What XRP Offers
XRP’s value is its speed, low-cost, and scalability. To explain, they claim XRP can process more transactions faster and cheaper than other blockchains.
They claim the XRP Ledger can settle transactions in three to five seconds. If this claim is true, the XRP Ledger is faster than other blockchains. In contrast, it takes Bitcoin’s blockchain about 10 minutes to confirm a BTC payment, CoinMarketCap estimates. Moreover, it takes the Ethereum (ETH) blockchain one to 30 minutes to settle a transaction, HedgewithCrypto claims.
Plus, they claim the average XRP transaction costs $0.0002. Comparatively, the average Ethereum Transaction Fee was $1.137 on 29 April 2023, Ycharts estimates.
How Scalable is the XRP Ledger?
Impressively, they claim the XRP Ledger can handle 1,500 transactions per second (TPS). In contrast, Ethereum (ETH) had a speed of 27 TPS and Bitcoin (BTC) was processing seven transactions per second in December 2022, Ledger.com estimates.
Three other blockchains deliver a higher TPS than XRP Ledger, Ledger reports. First, Polygon (MATIC) could process TPS in December 2022. Second, Solana (SOL) claimed to have a capacity of 50,000 TPS in December 2022. Third, Avalanche (AVAX) had a 4,500 TPS capacity in December 2022.
Plus, the Ethereum Foundation claims the Ethereum blockchain could process 100,000 TPS if its Proto-Danksharding sharding upgrade and Layer Two works. A Layer Two is a second less-secure blockchain they add to Ethereum. Proto-Danksharding is a cheaper and faster method of adding data to Ethereum blocks.
Blockchains will need to process hundreds or thousands of transactions per second to serve a mass market. For example, an e-commerce platform that can only process 12 TPS can only serve 12 customers at once.
XRP’s TPS is competitive with rival payment processors. For example, PayPal (PYPL) was processing 193 TPS and Visa (V) was processing 1,700 TPS in December 2022, Ledger reports.
If the 1,500 TPS claim is true, the XRP Ledger is a scalable blockchain. That means the XRP Ledger is large enough to serve a mass market.
How Much Money can XRP process?
They are reporting substantial amounts of activity on the XRP Ledger. For example, Ripple reported $361.01 million worth of XRP sales in the first quarter of 2023.
XRP sales by Ripple grew from $226.31 million in the fourth quarter of 2022, Ripple reports. They claim XRP Ledger on-chain activity grew by 34% to $115 million between the fourth quarter of 2022 and the first quarter of 2023. Moreover, the XRP Average Daily Volume of exchanges grew by 46% from $698 million in the fourth quarter of 2022 to $1 billion in the first quarter of 2023.
In comparison, the total volume of XRP purchases fell from $2.738 billion in the fourth quarter of 2022 and $2.570 billion in the first quarter of 2023. Conversely, XRP’s total On-Demand Liquidity (ODL) sales rose from $2.964 billion in the fourth quarter of 2022 and $2.931 billion in the first quarter of 2023.
XRP use is growing
Impressively, Total XRP volume rose from $64.31 billion the fourth quarter of 2022 and $91.84 billion in the first quarter of 2023. Similarly, Average Daily Volume (ADV) of XRP rose from $698.45 billion in the fourth quarter of 2022 to $1.020 billion in the first quarter of 2023.
The XRP Ledger processed 116.342 million transactions in the first quarter of 2023. The number of transactions processed grew from 106.429 million in the fourth quarter of 2022 and 103.039 million in the third quarter of 2022.
XRP is experiencing user growth. For example, the XRP ecosystem added 125,225 new wallets in the third quarter of 2022, 228,143 new wallets in the fourth quarter of 2022, and 140,558 new wallets in the first quarter of 2023.
The average cost of an XRP transaction went from $0.000504 in the third quarter of 2022 to $0.0004032 in the fourth quarter of 2022 to $0.000484 in the first quarter of 2023.
Interestingly, they keep most of Ripple’s XRP supply ,around 42.8 billion XRP, in escrow. In contrast, they distribute 51.678 billion XRP, while Ripple held 5.511 billion XRP on 19 March 2023.
The XRP Ecosystem
Ripple is the organization that runs the XRP Ledger. Ripple has some impressive partners, including Bitso, the largest Latin American crypto exchange. Bitso’s US-Mexico transaction volume exceeded $3.3 billion in the first quarter of 2023, Ripple estimates.
Ripple payout partners include Tranglo, Bitso, Modulr, Nium, and Traveler. Its tokenization partners include Stasis, Supermojo, Bitsamp, CrossTower, Securitize, and Novatti. The XRP Ledger infrastructure partners include Allbridge, GateHub, Fractal ID, eersyst, XRPL Labs, and MultiChain. Other partners include Carbon Title, Thallo, the Crypto Climate Accord, and the Crypto Impact and Sustainability Accelerator.
Services the XRP Ledger could deliver include Cross-Border Payments, Crypto Liquidity, and Central Bank Digital Currencies (CBDCs). They claim central banks can use the XRP Ledger to build CBDCs. Central banks in several countries, including Nigeria, the People’s Republic of China, and India, are experimenting with CBDCs.
XRP vs. The SEC
Ripple is one of several blockchain DeFi organizations that has incurred the SEC’s wrath. The Securities & Exchange Commission (SEC) is the primary investment regulator in the United States.
SEC lawyers allege Ripple and executives Christian Larsen and Bradley Garlinghouse violated US law by issuing $1.3 billion worth of unregistered securities, a press release alleges. The lawyers made the allegation in a 2020 lawsuit.
To elaborate the Securities Act of 1933 requires that anybody who issues a security in the US must register it with the SEC. Essentially, the SEC attorneys allege XRP is an unregistered security. Consequently, XRP could be illegal in the US.
This lawsuit could soon end in Ripple’s favor, The Daily Hodl speculates. The Hodl staff thinks US District Judge Analisa Torres struck an important part of the SEC’s testimony from the lawsuit on 6 March 2023. This could make it hard for the SEC’s lawyers to prove their case. Interestingly, Team Ripple seems to agree with The Daily Hodl.
“On March 6, the Court issued a 57-page opinion deciding which opinions of the SEC’s and Ripple’s experts can be considered on summary judgment (and, if needed, at trial) and which opinions need to be “stricken,” Team Ripple speculates in a blog entry.
“Specifically, the SEC’s expert’s testimony regarding the “reasonable expectations of an XRP purchaser” was struck from the record, along with their expert who attempted to determine what “caused” the price of XRP to change. Ripple expects a decision on summary judgment in 2023, though timing is ultimately up to the Court.”
Hence, XRP could soon be free of the SEC lawsuit, which could boost its value. I think XRP and Ripple could have enormous value because of the high level of use. In particular, I think a major financial institution, or a central bank, could buy Ripple for its technology.
Thus, XRP (XRP) is a cryptocurrency all speculators need to watch.
