Ripple Releases Results of First Test Using XRP Tokens
Being the third most valuable cryptocurrency by market cap, Ripple has arranged itself to be in an extremely good position to fill a niche that has opened up in the international money transfer sector. Ripple’s coin XRP is intended to serve as a substitute token for money transfers, large and small, which need to be sent between people all over the world without having to pay excessive fees.
International transfers can sometimes take days and for large sums of money to reach their destinations, the fees make the entire process incredibly cumbersome. Especially in a global economy where things need to occur in real time, instantaneously, and without a latency of even a few hours, but rather merely a few seconds.
Ripple is most often traded speculatively since the value of each coin is relatively low and people can profit from the wild price fluctuations. However, many investors don’t see the value in the XRP coin itself since it is merely a vehicle for transmitting funds between institutions or companies and not a valuable asset in and of itself. There are not many retailers that can accept XRP as payment and it makes it not as valuable as another cryptocurrency that can be used as a payment method.
Alistair Constance, the director of Mercury FX which is a company that participated in the test, released a statement of the results
“The exchange rates were very competitive, and the transaction times were unbelievable. It was lightning fast compared to using the correspondent banking network Swift,” the interbank system that connects over 11,000 other financial institutions.
Even though the Ripple Network is able to process a transaction and complete the process in only a couple of minutes instead of a few days makes the potential for this technology extremely exciting. However, the network can only process 1,500 transactions per second whereas Visa is able to complete 24,000 per second, so there is a lot of improvement still to go. But there is hope that one day the Ripple Network will rival that of major credit processors and will compete on the level of Visa to fill the money transfer niche in the cryptocurrency market.