The popular cryptocurrency XRP, also known as Ripple, is finally facing some serious competition. for its first few years on the market, it was sort of immune to the typical kinds of business competitors because of how it was designed. In some ways, XRP stood above the crowd and offered a uniquely streamlined way to facilitate financial transactions. Now, what was once the preferred tool for banks and similar institutions is seeing competition from new market entrants and older, established players like Bitcoin.
Keep in mind that the main reason crypto coins came into existence was to facilitate financial transactions among individuals and banks. An additional role they play is to make it easier for banks to do business with each other. Everyone has its own niche, and tends to specialize in one or more of these diverse functions. How do most investors and banks use this popular crypto?
Ways to Use It
One of the early advantages that Ripple offered was a low entry price. Unlike many of its competitors, its price was low enough that traders didn’t have to buy fractions of it and could buy entire coins. That opened up new ways to use it, in addition to its primary function as a bank-to-bank cryptocurrency. For example, many forex enthusiasts trade XRP against the US Dollar on a regular basis, right along with their other pairs trades. It’s easy enough to follow the charts because this is not nearly as volatile as others. In fact, one of the key characteristics of this type of currency is their extreme price swings. In some cases, that makes crypto not very good candidates for forex. But XRP is different because forex pros treat it as just another stable currency.
What are the Advantages?
Ripple enjoys a few unique benefits that you don’t typically see with other big names. In addition to the low cost and ease of ownership noted above, the price is relatively stable, and its creators designed it to be able to work alongside other cryptocurrencies, rather than against them. Additionally, XRP-based were created all at once, which means there is a finite amount of them. They can’t be mined or created by anyone else. In the world of crypto, this is a truly unusual situation. The upside of it all is that it enjoys several built-in advantages against its potential competitors.
Who Are the Main Competitors?
The coin’s main competitors are SWIFT and Square, who are essentially duplicating the business model of Ripple with their offerings. But a more subtle challenge to XRP is coming from the world’s central banks. Working together, the mega banks are now cooperating at an unprecedented level, making the its use almost obsolete in some cases. When banks set up their own trade protocols and confirmation systems, there’s really no need for a coin working in between. So, the world’s major banking institutions have essentially done an end run on many of the cryptos that they had previously relied upon for transaction verification and other functions.