XRP has been present in the crypto realm almost from the beginning, as this online token was launched shortly after Bitcoin. This is why XRP has a long history behind it, and it is among the pioneers of digital coins from the crypto community. The XRP tokens were launched back in 2012 with the goal of offering faster, easier, and more secure transactions. Over the years, the XRP token has started to be used interchangeably with the word Ripple, the company with multiple services, and the one that owns the Ripple network, the Ripple Consensus Ledger, and the Ripple Transaction Protocol.
XRP is the native token of the XRP Ledger, which works with the help of a Unique Node List (UNL) to validate transactions. However, many people wonder whether XRP is a good investment or not. As the world becomes more digitized each day, there is a growth in investing in digital coins to better prepare for the future. Cryptocurrencies can be a good option to diversify your portfolio and gain profits, which is why they are suitable for those who can stand the risk of volatility. Additionally, the XRP price prediction shows that the value of this digital coin can increase in the future, which makes XRP an even better solution for those who want to take advantage of possible price fluctuations.
In this article, we discover the main factors that make XRP a good investment idea. Keep reading to learn more.
Table of Contents
Unique validation system
Ripple doesn’t use a Proof-of-Work (PoW) consensus mechanism like Bitcoin, which started to be condemned over the years for the huge amount of electricity it consumes. Some of the blockchain platforms have improved this problem with the help of the Proof-of-Stake (PoS) model, but this option also has some issues regarding scalability. However, XRP Ledger managed to solve some of the shortcomings of both of these consensus mechanisms. This created a unique option represented by the XRP Ledger Consensus Protocol.
The aim of this is to ensure that the verification process only occurs among trusted validators and that it doesn’t need an energy-intensive mechanism. The XRP Ledger has a list of trusted validators that are used so that the XRP Ledger can confirm transactions. In the case of XRP, the platform has a list of “Unique Node Lists,” or UNL, that are considered trustworthy, and they are the ones who validate new transactions that occur on this platform. Thanks to their work, they ensure that the Ripple network remains reliable, secure, and efficient.
For their work, they are rewarded with XRP tokens. Those who participate more actively in the consensus process have a greater chance of receiving higher rewards.
XRP is in the hands of a real company, which brings more control over its value
Decentralization brings both advantages and disadvantages. The great advantage is that no one controls this platform. However, in case of big problems, like major attacks, Bitcoin won’t really have someone behind it to fix the problem. That is not the case with XRP; it is owned by Ripple Labs, which brings more control over the future of XRP.
Ripple can take the necessary measures to keep XRP stable, which can help its digital coin increase and benefit from wider adoption. This can catapult XRP to the top, making it a main option when people are looking to add digital coins to their portfolios.
It is more affordable than the crypto titans
Bitcoin’s value has increased a lot since the moment it was first launched on the market. The ones who invested from the first moment have had a lot of advantages because of the price appreciation. However, because Bitcoin’s value has skyrocketed, this has removed accessibility, as not all individuals are now able to add Bitcoin to their wallets. This is why it is good that there are also more affordable options like XRP. Plus, XRP has great potential to increase its price in the future, thanks to a lot of scenarios, which make XRP a good investment possibility.
The price prediction shows an increase in the value of XRP
The value of XRP can increase in the future due to many factors. For example, XRP can increase its value if it goes through project development, which would help Ripple overcome some of its shortcomings. Some of the best ways in which the XRP Ledger can improve are by launching new improvements and features, making several updates on the blockchain, and expanding the use cases of its native token. Ripple could also look to collaborate with more banks or other companies from the FinTech sector. This can unimaginably boost XRP adoption and pave the way to a better future for this digital coin.
The long list of use cases
XRP also has a long list of use cases that prove even more that Ripple is a good investment opportunity. XRP is not only an amazing cryptocurrency, but it also acts like a transaction protocol that facilitates the transfer of borderless transactions. This offers XRP more use cases than the rest of the digital coins, and it makes it stand out from the crowd.
Plus, many banks use Ripple technology to offer money transfers and payments. Some of them are Star One Credit Union, Axis Bank, Cambridge Global Payments, and the list can continue.
It has low transaction fees
Transaction fees are another reason some individuals avoid investing in digital coins. However, XRP has low transaction fees, especially compared with Bitcoin and Ethereum. If Ripple continues to maintain low costs for XRP transactions, this digital coin can continue to represent a very appealing investment. This could mean that XRP can be a great long-term investment.
The bottom line
XRP can really be a good investment possibility. In the future, it can become more widely adopted and used on a larger scale by more companies and individuals worldwide. XRP has the chance to evolve tremendously, and if this occurs, then XRP will represent a top option for individuals who want to add digital coins to their portfolios.
