Crypto · Investing

A different buy: Crypto Coin – Ripple

As you have seen on different blogs, a part of the community has jumped on the crypto-bandwagon. I have been interested in crypto currencies for multiple years, actually owning a mining rig for a few months to mine LTC (Litecoin). Unfortantely I did not have the foresight to just buy bitcoins when they were cheap but my interests in the subject never wavered.

After reading the blog of Investmunt Hunting on his purchases I was triggered again to do something with my ongoing interests. So after some investigating I decided to buy into the Ripple coin.

Ripple’s website describes the opensource protocol as “basic infrastructure technology for interbank transactions – a neutral utility for financial institutions and systems.” And it already has the attention of large parts of the financial and banking world.

The protocol allows banks and non-bank financial services companies to incorporate the Ripple protocol into their own systems, and therefore allow their customers to use the service. Currently, Ripple requires two parties for a transaction to occur: first, a regulated financial institution “holds funds and issues balances on behalf of customers.” Second, “market makers” such as hedge funds or currency trading desks provide liquidity in the currency they want to trade in. At its core, Ripple is based around a shared, public database or ledger that has its contents decided on by consensus. In addition to balances, the ledger holds information about offers to buy or sell currencies and assets, creating the first distributed exchange. The consensus process allows for payments, exchanges and remittance in a distributed process. According to the CGAP in 2015, “Ripple does for payments what SMTP did for email, which is enable the systems of different financial institutions to communicate directly.”


Market capitalization overview:


As of April 2017, members of the network known as the Global Payments Steering Group (GPSG) are Bank of America Merrill Lynch, Canadian Imperial Bank of Commerce, Mitsubishi UFJ Financial Group, Royal Bank of Canada, Santander, Standard Chartered, UniCredit and Westpac Banking Corporation. The group will “oversee the creation and maintenance of Ripple payment transaction rules, formalized standards for activity using Ripple, and other actions to support the implementation of Ripple payment capabilities.”

15 of the 50 largest banks in the world are already testing with the Ripple Network and it has received investment capital from Google Ventures, China Growth Capital and other like Standard Chartered, Accenture Ventures, SCB Digital Ventures, and SBI Holdings.

So what did I do? I opened an account at an online trader and bought €500,- worth of Ripple Coins (XRP). I received (minus the fees) about 2641 coins at a price of €0,189. Part of what interested me on this coin was the relatively low valuation of the coin similar to the early days of Bitcoin.

So is this an investment or a gamble? I think it is a bit of both to be honest. Technically it is an value investment since I hope that the coin will steadily grow in value so I can make a healthy profit when the coins hits $1 (or maybe $15? :)) and I sell them. But with the volatility (in 1 week + 40% and now -12%) of the crypto currencies this is a lot more of a gamble then my dividend stocks.

So anyone else decided to start buying crypto currencies?