A puzzle involves strategy and seeing a picture of the final result can help you develop that strategy.
In difficult puzzles, there is an indiscernible area of the puzzle that you guess your way through. Maybe a field of grass where the blades are so alike one another that the only way to find the next piece is to find the proper shape of the puzzle piece, rather than looking at the picture. This is the cryptocurrency world. The picture, however, is not right in front of us, so we are often left to our own reasoning, understanding, and logic.
The players are either known or unknown with a landscape that changes often and internationally. Built on the blockchain, cryptocurrencies are but one use for this technology, and each crypto can have an entirely different use case. Some will rise to the top and be adopted as accepted technology, while others wither away before they even gain a foothold in the marketplace. Others still will come into existence, grow their market share reaping hefty profits, only to crash leaving retail investors wondering how this “get rich quick” scheme didn’t work out.
As an investor, researcher, and investigator, you are watching all players, sifting through news, tweets, whitepapers, and the like. Governments, bankers, investors, and companies are at the table. Even with the seemingly perfect strategy, you may come up short. Researching and connecting dots in this infant asset class while watching new use cases unfold is fascinating. That is why I write about the crypto sphere.
Take for example Ripple Labs. Ripple is a San Francisco based company that founded a very specific niche in the blockchain-cryptocurrency world. They focus on international payment remittances and liquidity for cross-border payments. To make the almost instantaneous liquidity possible (i.e. sending USD to Japan for Yen in a matter of seconds), the dollar converts to a cryptocurrency called XRP, then to Yen, almost immediately. This is ground-breaking in the world of finance and money transfer. The other contender in the payment remittance sphere is IBM, which uses the Stellar (XLM) platform.
Using a cryptocurrency to act as a liquidity solution brings some concerns, such as the price stability of that currency. If trading volatility affects prices, how might that affect the cost of the transaction for the transacting parties? The instant in-and-out speed (about 3 seconds) of using the XRP ledger should quell some level of this concern working to provide real-time gross settlement of payment (RTGS).
Banks and money transfer platforms (Western Union, MoneyGram, etc.) must hold reserve funds (in Nostro/Vostro Accounts) in order to facilitate these cross-border payments and the time can take days to perform the transactions using the existing system.
Ripple asserts that they are not XRP and if Ripple were to shut its doors forever, XRP will still exist. Think of it like this: Ripple is a company that has designed some of its services to use XRP. I suggest gaining greater insight into Ripple as a company due to their fascinating approach to blockchain technology. I am not suggesting an investment into XRP, but an understanding of Ripple. They have surrounded themselves by very influential people and are a company to watch as the cryptocurrency and blockchain revolution progresses.
Former US President, Bill Clinton will be the keynote speaker for a Ripple event called Swell. Ripple invites well-thought regulation to the cryptocurrency marketplace. As a matter of fact, Ripple has been very vocal about their intentions to work with regulators. Ripple’s business focus is within a very regulated industry and aims to improve the efficiency of certain banking functions.
Ripple Labs promotes that Swell, “connects the world’s leading experts on policy, payments, and technology for the most provocative dialog in global payments today.” Having former President Clinton, Founder and Board Chair of the Clinton Foundation, shows me a strong effort to bring government regulators to the table.
DISCLAIMER: As the domain name of this site suggests, the content of my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. I hold XRP and XLM.