Why (XRP) Ripple is Making Waves

Ripple (XRP) – Before today, I had heard of Ripple, but I didn’t feel any particular way about it. It wasn’t very glamorous, it wasn’t making many headlines – especially compared to Bitcoin and Ethereum. But, all of that has changed.

To achieve a better understanding of what Ripple is, let’s look at the website for some basic info. First, we see a tagline: ”The world’s only enterprise blockchain solution for global payments”. Already, we’re getting a sense that they are hunting big game here, not mom & pop. Next, they identify current problems in the global payment system (based on McKinsey, Global Payments Industry Study, 2016):

  • Slow – Takes 3-5 days to settle
  • Expensive – $1.5 Trillion in costs
  • Unreliable – 4% of payments fail
  • Unacceptable – People demand a seamless and elegant experience

Okay, so far we have a blockchain technology that is going after a specific niche, providing various tools to help institutions adopt it. What else? Well, before we dismiss it as just another “disruptive” blockchain technology currently getting “pumped”, let’s think about what’s actually happening here.

The main difference between Ripple and most other products in the blockchain space is that Ripple isn’t trying to be the new FED, or completely replace an institution. Ripple is saying “hey, your process could use some updating, here’s how you can do it”. They are partnering with institutions, and engaging in constructive dialogue about how to move forward TOGETHER.

So, who are these institutions? According to their website, they have over 75 commercial partners deploying their technology. They offer many names and logos on their website, but if you do a bit of googling, you’ll discover a few different things. First and foremost, they’re backed by Google. Yeah, THAT Google. Second, they’re financed by SBI Holdings – a Japanese financial services company, as well as many other VCs.

The reference to SBI Holdings above is interesting because, an article was published that talks about a Japanese bank consortium planning to use Ripple’s blockchain technology. In the article, they state that the commercial phase includes “about 40 percent of all Japanese banks” and is “expected to start in the fall of this year”.

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