The Ripple XRP shot to a lot of fame a few months ago and even overtook Ethereum as the second-largest cryptocurrency in the world. A slow decline since has caused the token to drop to third place but has clearly shown us the power it can have.
Ripple enjoyed a temporary boost in prices back in September when Coinbase announced that it would incorporate more coins onto its exchange listings. Coinbase is one of the largest digital currency exchanges in the world, and this announcement possibly meant that Coinbase is going to incorporate XRP as well since the currency is doing so well.
Coinbase, however, has still not added XRP, and chances are that it never might. Let’s look at the possible reasons and their implications.
What is Ripple and XRP?
Before we talk about Ripple XRP’s claim to cryptocurrency, let’s look at the current market scenario. Currently, XRP tokens are being traded at $0.25 per coin, with an all-time high being $3.17. XRP is available in huge supply, approximately 40.2 Billion in number, which takes its market capitalization to around $11 Billion, just shy of Ethereum.
Ripple is a real-time gross settlement system, remittance network and currency exchange. It comprises of a common ledger managed by a network of validating servers. Ripple is not dependent on compute-intensive proof-of-work, like Bitcoin is. You can just think of it as a database shared between servers (owned by individuals or financial institutions), with a communication protocol established to ensure data integrity.
XRP is a digital token issued by Ripple.
Ripple is not a cryptocurrency
Ripple is not a cryptocurrency in that it isn’t blockchain-based. It is considered to be a very useful protocol that is seemed to be liked by financial institutions such as banks. In fact, Ripple is all set to become the network of choice for transactions among businesses. Ripple isn’t focused towards individuals, which is yet another reason why crypto exchanges such as Coinbase may not accept it so easily.
The biggest case against Ripple is perhaps the XRP token itself. Ripple, as a technology, seems to be quite useful. But the XRP token has no real-world value. In fact, Ripple wanted to phase out XRP in 2016, when interest in cryptocurrencies began to rise again and it stayed.
What about the future?
The future is not all bleak, however. The fact that Ripple spiked in value by the mere speculation of its addition to Coinbase means that its actual addition will cause the currency to skyrocket, bringing a lot of profit for Coinbase as well. Due to the sheer number of XRP available, per token value of XRP needs to just cross $6.5 in order to beat Bitcoin.
Coinbase a major exchange with millions of users. Coinbase and Ripple can certainly benefit from each other with the XRP’s addition to Coinbase. However, that entirely depends on whether the Ripple foundation will be submitting their form to Coinbase and complying with their demands or not. We also don’t know whether XRP is compatible with the ecosystem that Coinbase, or other digital currency exchanges, represent.