Analysis: Ripple

Ripple

Instant, certain, low cost international payments.

 1. What is it?

Ripple’s distributed financial technology enables banks to send real-time international payments across networks. Using Ripple, banks can meet growing demands for faster, low-cost, on-demand global payment services for any payment size. The result: new revenue opportunities, lower processing costs, and better overall customer experiences. Using Ripple, your bank can acquire new customers and grow revenue through differentiated products and services. In addition to that, Ripple lowers your bank’s back-office costs through an efficient mechanism to process and settle international payments. This model allows you to estimate the efficiency gains your bank can achieve using Ripple for international payments. (Source: www.ripple.com)

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2. FIT Test (F: Future updates; I: Innovation; T: Trends): FIT Test enables us to check the uniqueness, alignment with respect to the current trends and future update of the fundamentals of the corresponding cryptocurrency.

A) Innovations:

Ripple’s solution is built around an open, neutral protocol (Interledger Protocol or ILP) to power payments across different ledgers and networks globally. It offers a cryptographically secure end-to-end payment flow with transaction immutability and information redundancy. Architected to fit within a bank’s existing infrastructure, Ripple is designed to comply with risk, privacy and compliance requirements.

  • Interledger Protocol (ILP): All banks and payment providers — from the smallest to the largest — can leverage the Interledger Protocol to securely and efficiently transact cross currency. ILP can work with any new network or system, regardless of its underlying technology. It ensures the payment speed and certainty necessary to service high volumes of all payment types and sizes, while making them cost-effective for customers and profitable for banks.

 

  • Ripple Connect: Ripple Connect links the ledgers of financial institutions through ILP for real-time settlement of cross-border payments in a way that preserves the ledger and transaction privacy of the financial institution. Additionally, Ripple Connect provides a way for banks to exchange originator and beneficiary information, fees and the estimated delivery time of the payment before it is initiated — providing unprecedented visibility into each transaction.(Source: www.ripple.com)

B) Trends: Decrease operational costs for the banks, Faster transactions rate.

C) Future updates: Having partnered with almost 50 major global banks, one can expect more funds into this crypto making it a big hit in the future.

3. Community:

  • Clients:

  • Integration Partners:

4. Unique features

5. Downsides/Risks

The openness with which the Ripple network operates has, on the other hand, also allowed for vulnerabilities to develop. Researchers at Purdue University have found that, although the core of the network remains highly liquid, that the structure also allows for attacks on certain nodes within the network to cripple some users’ access to funds. In fact, some 50,000 wallets may be immediately at risk if such an attack were to occur. However, the researchers suggest that the fact that they have been able to detect weaknesses in Ripple’s system is actually a good thing, since conventional world of banking often lacks transparency in this regard.  Having identified those weaknesses, Ripple’s developers may be able to work to correct them.

6. Future:

As Ripple continues to invest in the network and improve, this combined with a growing presence and partnerships with global firms makes it a candidate to be the next big disruptor. Recently, partnerships have been established. MUFG in Japan is working to oversee creating payment rules and standards. Similarly, a Global Payments Steering group of banks formed to establish rights and obligations framework for the use of the technology. The group includes BAML, Santander and RBC. A group of Japanese banks have piloted software and towards the end of the year plan to use the technology in commercial scale. This will mean 40% of banks in Japan will be in some way connected to Ripple technology. Then in 2018, RBS and BAML, amongst others will use Ripple to underlie the cross-border payment services for retail and commercial customers. As the network grows and ripple begins to make a name for itself, it may well present a buying opportunity. Ripple has some way to go to match the exposure of Bitcoin with only five years under its belt compared to Bitcoin’s 8 years, but if it follows in the footsteps of Bitcoin, its value has the potential to surge further. The vulnerability found by the students of Purdue university can be resolved by adding more members in the Ripple network which they seem to be doing at a better rate day by day.

7. Technical Analysis:

Technical analysis for XRP indicates that it has corrected itself very well after the soar observed in mid May 2017.

Following are the statistics inferred from the technical analysis:

  • Risk/Reward Ratio: 1.43
  • Optimal Trade Entry (OTE): 0.00009573-0.00007582 BTC
  • Market Cap: $ 9,940,405,979
  • Price: $0.25 / 0.00010163 BTC

The ideal Risk/Reward Ratio tends to 2. So, The OTE for this crypto is somewhere between 0.00009573-0.00007582 BTC. However, If the strong fundamentals of XRP convince you to put your money on, it looks promising for a long run.

8. Comments:

Ripple has a strong community and convincing selling point of decreasing operational costs while increasing the rate of transactions. It is ranked third after BTC and ETH. Japan is on the road to adopt Ripple. Good for long term investment.[/expander_maker]

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