I don't generally enter topical content contests, primarily because I don't have the time to do the research and write the posts. My content publishing schedule keeps me busy as it is. But, this is for @inleo, so let's make an exception.
A lot of people in crypto circles don't like XRP, for one reason or another. For many, it's the perception that the project isn't entirely decentralized. Others may not like that their primary customers are banks. Whatever the case, the question I'm supposed to answer is which cryptocurrency has the best upsides for the next bull run.
Of course, there are a number of ways to interpret "upsides". I'm guess that the intent was to answer from an investor's perspective.
As a crypto investor, an upside would indicate the potential for huge gains. Naturally, there are two sides to that coin. What is the buy-in price? And what is the potential sales price? If a cryptocurrency starts at a high valuation, and especially if it is overvalued, that would limit its upsides. On the other hand, if it starts with a low valuation or is undervalued, that would increase its upsides. That said, there are several cryptocurrencies in that market one could choose. I'm going to choose XRP.
What Is XRP?
XRP has an interesting history. Launched in 2012 as a bitcoin alternative called NewCoin. Not long after launch, the named changed to OpenCoin. Later, it was changed to Ripple. XRP was the currency code.
Using a distributed consensus protocol, Ripple's team of developers sought to revolutionize the financial system by building on top of the legacy system rather than replace it.
The XRP Ledger (XRPL) is a decentralized public blockchain. Validators on the blockchain agree on the order and outcome of transactions on the blockchain every three to five seconds, as opposed to the Bitcoin network's 10 minute transaction time. While anyone can operate a ledger, the 120 validators currently making up the network are run primarily by businesses, universities, and exchanges with some individuals making up the difference.
Rather than rely on proof-of-work as bitcoin, which is inefficient, XRPL uses sustainable methods of consensus using a carbon credit system. The blockchain is used to power cross-border payments.
The Unique Strengths of XRP
XRP features 6 primary strengths that make it a cryptocurrency with a strong market position. Currently ranked 6th in market cap, XRP has ranked as high as 3rd and remained in that position for much of its history.
1. Fast Transactions: XRPL is designed to settle transactions in 3-5 seconds, which is much faster than most other major blockchains. While Hive can settle transactions just as quickly, it doesn't have the popularity that XRP has and has historically maintained. This fast transaction speed makes it desirable for financial institutions and anyone who wants to move money across borders.
2. High Scalability: XRP can handle a high volume of transactions per second (TPS). It is designed to scale and its TPS is similar to Visa or Mastercard, about 1,500 TPS. That makes it competitive with the leading financial instruments that have dominated the market since the 1970s.
3. Designed for Financial Institutions: Since its inception, the goal for XRP was to be the standard for international money transfers between banks. That specific use case within the financial industry sets XRP apart from other cryptocurrencies on the market. Where many cryptocurrencies purposely tried to position themselves as traditional banking alternatives, Ripple Labs determined to make itself useful to current financial market players by innovating a tool that can be used by leading financial institutions.
4. Low Transaction Fees: XRP has lower transaction fees that Bitcoin and Ethereum, which makes it desirable to a large cross section of the crypto market.
5. Eco-friendly: Unlike proof-of-work (POW) cryptocurrencies like bitcoin, XRP uses a consensus algorithm for validation making it more energy-efficient. Its sustainability is a great selling point to those who criticize bitcoin and the POW consensus model.
6. Supply Management: All XRP that will ever exist has already been created. That removes any inflation risk present in cryptocurrencies where new coins are regularly mined. However, while the XRP has already been created, a large volume of it is held in escrow. In fact, 55 percent of the XRP created was put into escrow from the outset. Ripple Labs releases 1 billion XRP into the market every month as a means of controlling supply. To be fair, many analysts have criticized this aspect of XRP, but the escrow and release of new XRP into the market at regular intervals has not hurt XRP and is likely helping to control inflationary risk. These are important concerns for anyone interested in investing in XRP, or any cryptocurrency.
XRP's Historic Performance
At the start of 2017, XRP was valued at less than $0.01. By the end of the year, its value had skyrocketed to its peak. The year 2018, however, saw a major downturn and by the end of the year the price had fallen back to around $0.35.
Another thing to note is that the U.S. Securities and Exchange Commission (SEC) sued Ripple in December 2020 in an attempt to label XRP a security. While the lawsuit initially hurt XRP's price in the market. Ripple won its lawsuit when U.S. District Judge Analisa Torres ruled that XRP did not violate any securities laws, thus determining that XRP is not a security. This was not only a win for Ripple Labs, but it was also a win for the wider crypto market.
The Ripple win over the SEC resulted in an increase in XRP's price as it surged 71 percent within days. The price has since come down about 20 cents, but I liken that to an easy win for investors who capitalized on the news. XRP is still undervalued and will likely see further price increases during the next crypto bull run. It could go beyond its all time high of $3.84.
XRP recently saw a 7-day surge when its price ran from $0.5489 to $06124.
While the crypto market as a whole is volatile, as is XRP's market price, this volatility could result in major upsides for XRP as the entire bull market surges past record all-time highs. If that happens, XRP is sure to be a winner.
Posted Using InLeo Alpha
