One of the most popular questions when it comes to cryptocurrency investing is whether Ripple (XRP) is worth investing in. In this article we give a factual and unbiased answer to the question whether Ripple (XRP) is worth investing in.
Arguably, the question whether Ripple (XRP) is worth investing in is not only a very popular question, it is arguably also one of the most controversial questions.
Is Ripple (XRP) Worth Investing In?
This is the summary of our answer to the question is Ripple XRP worth investing in:
Ripple XRP is a solid long term investment because of future adoption prospects. The revolutionary feature is that any bank account can send and convert any currency to any wallet, and back. A growing number of financial insitutions globally are adopting Ripple, which creates liquidity for XRP. This creates credibility among investors.
Why Ripple As An Investment Is A Controversial Question
There is some emotion among investors when it comes to Ripple (XRP) as an investment. The criticism among the skeptics tend to come from either of the 2 points:
- Centralized vs decentralized characteristic of the Ripple’s XRP.
- The exact number of XRP tokens in circulation.
The first point should be understood against the famous whitepaper that Satoshi Nakamoto who is considered the ‘founder’ of Bitcoin. The whitepaper envisioned a blockchain that is functioning in a fully decentralized way.
Some skeptics believe that Ripple is centralized because they manage Ripple’s network as well as the cryptocurrencies. However, Ripple’s official version is that both Ripple’s network as well as the tokens can fully function autonomously, without intervention of Ripple as the startup (company). We published the official version of Ripple’s executives in this article 10 Must Know Facts About Ripple and XRP For Investors.
Ripple has evolved their technology over time, and it seems that the level of centralization came down considerably. Some argue that Ripple has the most decentralized network now. That said, it seems that this point of criticism is evolving much more into a technologically dogmatic belief more than anything else.
The second point is the number of tokens that Ripple holds into escrow combined with the number of tokens that some founding members may hold. There seems to be some ‘confusion’ about this, and some believe that the exact number of XRP in circulation is lower. This would lead to a lower market cap.
Ripple (XRP) Seen From The Lens Of Adoption
At InvestingHaven we do not (!) participate in this discussion because we have a different thinking framework. If anything, it does not make any sense to argue if the thinking framework is structurally different.
As explained in our articles Ripple Fundamental Analysis we look at Ripple’s XRP from the lens of ‘lean startup principles’.
So thinking of Ripple fundamental analysis is, first and foremost, understanding how Ripple performs from a startup growth perspective.
The most important signs to look at is ‘traction’ in terms of ‘adoption”. In startup terms it means that there is product/market fit. This means that the startup develops a product or service in a way that it solves a problem for certain segments of the market. The larger the market the bigger the potential for the startup.
This is, by far, the most important challenge that any startup faces, also every crypto startup that has a cryptocurrency.
Taking this viewpoint puts concepts like cryptocurrency market cap and technology in totally different perspective.
What we are saying essentially is that we the outside-in view, and that we do not focus on crypto internals.
In any emerging technology it is adoption that will determine succes. That’s what we documented in Ripple On Its Path To Become The Largest Cryptocurrency: evidence of growing adoption.
Ripple Is Accelerating Adoption
Based on the latest facts and figures it is clear that Ripple is signing up new customers at an accelerating rate. Consider the following:
- Early 2018: on average 1 new customer signed up on Ripple’s network
- End of 2018: on average 2 new customers signed up on Ripple’s network
- Early 2019: on average 2 to 3 new customers signed up on Ripple’s network
That’s exactly what we mean with ‘traction’ in terms of ‘adoption’. The adoption rate is accelerating.
Whether the XRP usage is accelerating at exactly the same pace is not clear. It is also not a requirement. That’s because XRP usage will grow automatically over time with more users on Ripple’s network.
What Ripple is doing now is clear. Similar to Google, Facebook, Uber, and all other raging success stories in the digital space is creating network effects. An exponential rise in adoption will result in a winner-takes-it-all effect.
Ripple has a revolutionary vision, it has a solid technology stack, it is among the best performing when it comes to transaction speed, it keeps on growing as a company in the midst of the crypto winter, the reactions and commentary from their clients (respected and trusted names in the world) in the public domain are very promising. This is how adoption and traction come to live.