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Past performance is no indication of future results. Crypto-assets are highly volatile. You could sustain a loss of some or all of your investment, so it is important to invest only what you can afford to lose. For a detailed overview of the risks, please review the Risk Disclosure.
Past performance is no indication of future results. Crypto-assets are highly volatile. You could sustain a loss of some or all of your investment, so it is important to invest only what you can afford to lose. For a detailed overview of the risks, please review the Risk Disclosure.
About XRP (XRP)
Unlike Bitcoin, which is run by a decentralised peer-to-peer network and controlled by no single entity, the cryptocurrency XRP was created and is run by a single company. While Bitcoin and other cryptocurrencies are positioning themselves as independent alternatives to traditional currencies, the goal of XRP is pretty much the exact opposite: XRP wants to act as a global settlement network and hence, works closely together with banks and financial institutions. The goal of XRP is to act as a flexible middle-man currency to allow the exchange of any unit of value, from fiat currencies such as the US dollar or euro, and cryptocurrencies like Bitcoin to commodities or frequent flier miles.
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Forecasts predict a continuous increase in the XRP (XRP) price due to the growing acceptance and use of cryptocurrencies. Those who invest early could benefit from long-term price appreciation.
The value of XRP (XRP)can be affected by various factors, such as regulatory changes and global economic events. Therefore, it is essential to thoroughly research before investing. The following sections give an overview of the key events and factors impacting its price.
The past price trends of XRP (XRP) do not indicate future performance.
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Key information about XRP (XRP):
XRP was founded in 2012 by Chris Larsen and Jed McCaleb
The aim was to create a fast, secure and affordable solution for global money transfer that goes beyond the traditional banking system
XRP is the cryptocurrency of the XRP network
Unlike other cryptocurrencies such as Bitcoin and Ethereum, XRP is not designed to be an alternative currency, but a tool to execute transfers in real-time
XRP uses its own consensus protocol that reduces transaction finality and transaction costs
Measured by market capitalisation, XRP is one of the largest cryptocurrencies, exceeding 30 billion USD in February 2023
The all-time high (ATH) of XRP was approximately 3.40 USD between 2017 and 2018
XRP (XRP) was developed by a single company, unlike Bitcoin, which is operated by a decentralised peer-to-peer network and is not controlled by a single entity. While Bitcoin and other cryptocurrencies position themselves as an independent alternative to traditional currencies, XRP pursues the exact opposite.
XRP wants to act as a global settlement network and works closely with banks and financial institutions. XRPs goal is to act as a flexible middleman currency enabling the exchange of any asset, from fiat currencies such as USD or EUR to cryptocurrencies such as Bitcoin to goods or air miles.
XRP was founded in 2012 by Chris Larsen and Jed McCaleb and is based on the work of Ryan Fugger, the creator of the XRP Ledger, an open-source cryptographic ledger powered by a peer-to-peer network of nodes. McCaleb later left XRP and founded Stellar, another cryptocurrency for payment purposes.
XRP is not primarily a cryptocurrency, but a payment network for banks intended to make international payments between financial institutions cheaper. XRP is the token on the network.
XRP has partnered with well-known banks such as Bank of America, Santander and Standard Chartered. Due to a violation of the Bank Secrecy Acts, XRP got into a legal dispute with the US regulators and was classified as an unregistered security. The legal proceedings are continuing as of early 2023. XRP has also been criticised for its misleading advertising.
How does XRP work?
The XRP ledger uses ‘distributed ledger technology’ instead of traditional blockchain technology to facilitate the transfer of tokens. These can represent fiat currencies, cryptocurrencies or other units of value.
Distributed ledger technology is a digital system for simultaneously recording transactions in several places. As an open protocol, it is available to anyone without requiring approval from XRP Labs, enabling banks and other institutions to integrate the XRP protocol into their systems. XRP offers a more efficient and cost-effective alternative to the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system for international transactions.
The XRP company has several products: RippleNet, XRP Ledger, RippleX and the XRP cryptocurrency. RippleNet is a global network that enables financial institutions to transfer money faster and cheaper. RippleNet is revolutionising the way cross-border transactions are carried out by offering On Demand Liquidity (ODL). With ODL, you can forgo upfront payment for transactions.
The XRP Ledger is an open-source blockchain by XRP that uses XRP as its native asset. XRP differs from other blockchains like Ethereum because it does not use a Proof of Work or Proof of Stake consensus mechanism, but uses its own XRP Ledger consensus protocol. This protocol is more centralised and efficient, allowing fast transactions in just a few seconds.
RippleX, on the other hand, is a platform that provides blockchain solutions for payment-oriented services. Companies can leverage the expertise and products of RippleX and the XRP Ledger to achieve mainstream compatibility and user-friendly solutions.
What is unique about XRP (XRP)?
XRP aims to create a direct and efficient money transfer system that operates in real time. This system is intended to be more secure, transparent and cost-effective than traditional financial institutions.
XRP is known for its fast transaction times, and it takes only a few seconds to complete transactions, much faster than other cryptocurrencies such as Bitcoin, where the block time is ten minutes. Unlike other cryptocurrencies, XRP is strongly focused on use in the financial industry for direct money transfer. This makes it an interesting tool for banks, payment providers and other financial institutions.
With the Bitpanda Savings plans, you can invest in XRP easily and conveniently. Choose your desired investment frequency (weekly, biweekly or monthly) and the amount you want to invest. Through continuous investment, your assets can grow effortlessly.
XRP (XRP): An alternative to traditional currency
XRP is XRP's cryptocurrency. The company aims to compete with banks in money transfers with its payment system by allowing users to send money at low costs. A major advantage of XRP is its fast transaction speed and the associated low transaction costs.
According to XRP documentation, the XRP Ledger settles payments in less than five seconds and can process more than 1,500 transactions per second. A small amount of XRP (about ten drops, a unit of XRP, worth 0.00001 XRP) is burned to cover transaction fees. Transaction costs are designed to increase as the network becomes more active to prevent network usage during peak hours. All XRP transactions are executed and settled on the Ledger.
Key points to know about XRP (XRP):
XRP (XRP) is a cryptocurrency founded in 2012 that serves as a fast, secure and cost-effective alternative to traditional transfers and payment methods
XRP can process transactions in just a few seconds
XRP have sparked controversy in the past, including lawsuits and criticism regarding the centralisation of the system
Do you want to invest in several cryptocurrencies at the same time? With the Bitpanda crypto-indices you can invest in XRP, and other cryptocurrencies, and diversify your portfolio in the long term.
The XRP (XRP) price and rate development depends on various factors. These include political and economic changes, cryptocurrency demand, regulations and technological innovations.
It is difficult to predict how the price of the XRP token will evolve but it is important to follow developments in the market and keep an eye on the risks before investing. Past performance is also never an indicator of future price trends.
XRP (XRP) price milestones:
Major price milestones include:
2012: XRP (XRP) launches with a price of 0.01 USD
2017: XRP reaches its all-time high of around 3.40 USD
2018: XRP crashes and loses over 90% of its value
2020: Prices suffer due to a legal dispute and the poor situation of the entire financial market, falling to a low of 0.18 USD
2022: the crash of the crypto exchange FTX negatively impacts the price trend
The development of the XRP (XRP) price
XRP's price history tells experts that XRP has not shown the same level of volatility as Bitcoin and other cryptocurrencies, however, there have been moments when the price history has developed in interesting ways.
The XRP (XRP) token launch
In 2012, XRP initially launched XRP with a price of 0.01 USD. Despite a stable performance throughout the year, it lost around 70% of its value. In late 2013, interest in XRP increased, reflected on crypto exchanges when the price increased by 850% to almost 0.06 USD in two weeks. However, the sudden increase was followed by an equally abrupt drop to 0.014 USD.
Increasing market capitalisation of XRP
After XRP dropped below one cent, its price rebounded to nearly 0.03 USD by the end of 2014 but later fell below 0.01 USD. Over the next few years, there were several ups and downs, mostly between half a cent and one cent.
2017 was an exciting year for XRP (XRP), in April, the market capitalisation exceeded the one billion dollar mark for the first time, and in May the price rose to 0.38 USD. After a slump and further ups and downs, the price soared at the end of 2017 and the beginning of 2018. Within a month, XRP recorded growth of almost 1.400% and reached its all-time high of 3.40 USD.
The crash of the crypto industry
The crash of the FTX exchange and negative crypto headlines like the 2022 ban in China had impacted XRP (XRP). FTX’s bankruptcy and the rapid losses of over 90% in the price of FTX tokens triggered a wave of loss of confidence throughout the crypto market. The situation worsened further when Binance announced that it would sell all of its FTX tokens.
Although the price of XRP had risen sharply in the weeks before the crash, it fell by over 25% in the wake of it, joining many other cryptocurrencies such as Bitcoin and Ethereum, which also lost considerable value.
The current XRP (XRP) price forecast
The XRP (XRP) price has not recovered from the months after the FTX crash and up to the present day. As of February 2023, it is currently around 0.36 USD, a long way from its all-time high of 3.40 USD. The live XRP price fluctuates continuously as it depends on supply and demand. XRP, like all cryptocurrencies, is known for its volatility, and the live price can change significantly in a short period.
In addition to traditional market factors like supply and demand, the price of XRP and XRP is influenced by other factors such as public reporting on XRP and its projects, trading activities on crypto exchanges and broader developments in society and the global economy.
Crypto boom impacts XRP (XRP)
The crypto boom has also had a positive impact on XRP. The crypto market has seen strong growth overall in recent years, resulting in increasing acceptance of cryptocurrencies and blockchain technology. This has subsequently brought XRP into focus and led to an increase in demand and rising prices.
The price of XRP, like many other cryptocurrencies, has followed the typical boom and bust cycle. This means that growing enthusiasm and interest leads to a sudden price increase, followed by scepticism and loss of confidence leading to sudden crashes.
When interest in Bitcoin rises and it gains acceptance, this often causes a XRP effect on other cryptocurrencies like XRP, resulting in price increases for them as well.
Limited tokens and cooperation with financial institutions
XRP’s founders pre-mined 100 billion XRP tokens (created at the time of the Ledger's launch) in 2012. This is all existing XRP and no more XRP can be created.
Unlike Bitcoin and other cryptocurrencies, where new coins or tokens come into circulation as block rewards, XRP enters circulation whenever XRP decides to sell tokens from its mined supply on the secondary market. The price of XRP is stabilised by limited supply and prevents it from being weakened by inflation.
With each transaction on the XRP ledger, the sender must pay a small amount of XRP, which is then burned and reduces the total supply. Although this increases the scarcity of the asset, it is unlikely to majorly impact on the price as it would take 70,000 years to use all of the XRP. However, this fact gives the token supply a slight deflationary effect.
XRP was designed as a medium of exchange and not a store of value. Therefore, its price is also influenced by its increasing adoption by institutions, especially for global payments. However, many institutions hesitate to use XRP while its volatility remains high.
The XRP community and social media can also influence the XRP price by marketing the cryptocurrency.
Legal proceedings and criticism
In 2020, the SEC (United States Securities and Exchange Commission) lawsuit against XRP threw the crypto industry into a frenzy. The SEC accused XRP of having to declare XRP as a security as 50% of the XRP tokens were owned by XRP.
However, XRP defended itself against the allegations, arguing that the XRP network operates decentrally and that holding XRP does not guarantee any right to a share of XRP's revenue or profits.
After nearly two years of litigation with the SEC, negotiations continue. XRP will have to wait patiently until it can fully focus on its business operations again. If XRP wins the litigation, the tide could turn for the company after many investors turned away and some exchanges stopped trading in XRP.
A major upswing in the XRP price is only likely if there is a final ruling in the litigation by the end of 2023.
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FAQs
Frequently asked questions about XRP
We understand that cryptocurrencies can be complex. We are here to answer your questions about XRP (XRP) and provide you with the information you need to make informed investment decisions.
You can purchase XRP directly or indirectly. Trading XRP (XRP) directly is commonly conducted via brokers, cryptocurrency exchanges or derivatives. Bitpanda offers a convenient and swift avenue to purchase XRP (XRP).
Indirect investments include XRP-based financial products such as certificates or Exchange-Traded Funds (ETFs), whose value fluctuates with XRP's price.
Unlike Bitcoin or Ethereum, the XRP network doesn't utilise blockchain technology, meaning XRP doesn't operate on a Proof of Work algorithm.
XRP can be used for financial transactions. With the XRP network, you can, for example, convert euros into XRP and subsequently use them to buy US dollars. This circumvents currency exchange through banks or exchange bureaus and is typically quicker and more economical.
XRP has the major advantage of rapid transaction processing. Traditional bank transfers, especially those crossing international boundaries, often take several days. In contrast, transactions can be accomplished within seconds via the XRP network.
Ripple's biggest challenge is the lawsuit filed by the US Securities and Exchange Commission (SEC).
In December 2020, the SEC launched a lawsuit against Ripple, leading to a sharp fall in the XRP price. The SEC contends that Ripple should have registered the XRP token as a security. Until this is settled, investors and financial service providers face uncertainty.
Predicting the price of XRP or any other cryptocurrencies is uncertain. However, XRP does possess an advantage as it serves as a core network for banks and has a direct application.
An Initial Public Offering (IPO), once a verdict is reached in the SEC lawsuit, could positively influence the price, but whether this will happen remains unknown. A defeat in the lawsuit could negatively impact the XRP price and potentially instigate a wave of lawsuits, meaning repercussions on the Ripple price remain uncertain.
Investors should always remember that past performance is not a reliable indicator of future price evolution.
ESG (Environmental, Social, and Governance) regulations for crypto assets aim to address their environmental impact (e.g., energy-intensive mining), promote transparency, and ensure ethical governance practices to align the crypto industry with broader sustainability and societal goals. These regulations encourage compliance with standards that mitigate risks and foster trust in digital assets.
Name Bitpanda Asset Management GmbH Relevant legal entity identifier 9845005X9B7N610K0093 Name of the crypto-asset Ripple XRP Consensus Mechanism Ripple XRP is present on the following networks: ripple, klaytn, binance_smart_chain. The Ripple blockchain, specifically the XRP Ledger (XRPL), uses a consensus mechanism known as the Ripple Protocol Consensus Algorithm (RPCA). It differs from Proof of Work (PoW) and Proof of Stake (PoS) as it doesn't rely on mining or staking but instead leverages trusted validators in a Federated Byzantine Agreement (FBA) model. Core Concepts: 1. Validators and Unique Node Lists (UNL): Validators are trusted nodes in the network that validate transactions and propose new ledger updates. Each node maintains a list of trusted validators known as its Unique Node List (UNL). Consensus is achieved when 80% of the validators in a node's UNL agree on the validity of a transaction or block. This ensures high levels of security and decentralization. 2. Transaction Ordering and Validation: Transactions are broadcast to validators, and once 80% of the validators agree, the transaction is considered confirmed. Each ledger in the XRPL contains transaction data, and validators ensure the validity and proper ordering of these transactions. Consensus Process: 1. Proposal Phase: Validators propose new transactions to be added to the ledger. 2. Validation Phase: Validators vote on proposed transactions by comparing them to their UNL. Consensus is achieved when 80% of validators agree. 3. Finalization: Once consensus is reached, the transactions are written into the new ledger, making them irreversible and final. Klaytn employs a modified Istanbul Byzantine Fault Tolerance (IBFT) consensus algorithm, a variant of Proof of Authority (PoA), enabling high performance and immediate transaction finality. Core Components of Klaytn’s Consensus: 1. Modified IBFT Algorithm: Immediate Transaction Finality: Klaytn’s IBFT algorithm ensures that once a block is validated, it is immediately final and cannot be reversed. This guarantees that transactions are quickly settled, providing a secure and efficient user experience. 2. Klaytn Governance Council: Council-Driven Governance: The Klaytn network is governed by the Klaytn Governance Council, a consortium of global organizations responsible for selecting and maintaining Consensus Nodes (CNs). This council-based governance model balances decentralization with performance and ensures transparency in decision-making. Two-Thirds Majority for Finalization: For a block to be finalized, it must receive signatures from more than two-thirds of the council members, ensuring broad consensus and network security. 3. Three-Tiered Node Architecture: Consensus Nodes (CNs): The selected validators responsible for producing and validating blocks. CNs are at the core of the network’s security and stability. Proxy Nodes (PNs): Act as intermediaries, relaying data between CNs and the broader network, which helps distribute network traffic and improve accessibility. Endpoint Nodes (ENs): Interface directly with end-users, facilitating transactions, executing smart contracts, and serving as user access points to the Klaytn network. Binance Smart Chain (BSC) uses a hybrid consensus mechanism called Proof of Staked Authority (PoSA), which combines elements of Delegated Proof of Stake (DPoS) and Proof of Authority (PoA). This method ensures fast block times and low fees while maintaining a level of decentralization and security. Core Components 1. Validators (so-called “Cabinet Members”): Validators on BSC are responsible for producing new blocks, validating transactions, and maintaining the network’s security. To become a validator, an entity must stake a significant amount of BNB (Binance Coin). Validators are selected through staking and voting by token holders. There are 21 active validators at any given time, rotating to ensure decentralization and security. 2. Delegators: Token holders who do not wish to run validator nodes can delegate their BNB tokens to validators. This delegation helps validators increase their stake and improves their chances of being selected to produce blocks. Delegators earn a share of the rewards that validators receive, incentivizing broad participation in network security. 3. Candidates: Candidates are nodes that have staked the required amount of BNB and are in the pool waiting to become validators. They are essentially potential validators who are not currently active but can be elected to the validator set through community voting. Candidates play a crucial role in ensuring there is always a sufficient pool of nodes ready to take on validation tasks, thus maintaining network resilience and decentralization. Consensus Process 4. Validator Selection: Validators are chosen based on the amount of BNB staked and votes received from delegators. The more BNB staked and votes received, the higher the chance of being selected to validate transactions and produce new blocks. The selection process involves both the current validators and the pool of candidates, ensuring a dynamic and secure rotation of nodes. 5. Block Production: The selected validators take turns producing blocks in a PoA-like manner, ensuring that blocks are generated quickly and efficiently. Validators validate transactions, add them to new blocks, and broadcast these blocks to the network. 6. Transaction Finality: BSC achieves fast block times of around 3 seconds and quick transaction finality. This is achieved through the efficient PoSA mechanism that allows validators to rapidly reach consensus. Security and Economic Incentives 7. Staking: Validators are required to stake a substantial amount of BNB, which acts as collateral to ensure their honest behavior. This staked amount can be slashed if validators act maliciously. Staking incentivizes validators to act in the network's best interest to avoid losing their staked BNB. 8. Delegation and Rewards: Delegators earn rewards proportional to their stake in validators. This incentivizes them to choose reliable validators and participate in the network’s security. Validators and delegators share transaction fees as rewards, which provides continuous economic incentives to maintain network security and performance. 9. Transaction Fees: BSC employs low transaction fees, paid in BNB, making it cost-effective for users. These fees are collected by validators as part of their rewards, further incentivizing them to validate transactions accurately and efficiently. Incentive Mechanisms and Applicable Fees Ripple XRP is present on the following networks: ripple, klaytn, binance_smart_chain. The Ripple XRP blockchain uses a unique incentive structure that differs from traditional Proof of Work (PoW) or Proof of Stake (PoS) systems, focusing on its Ripple Protocol Consensus Algorithm (RPCA). Here's a breakdown of the incentives and fees: Incentive Mechanisms to Secure Transactions: 1. Validators: Validators on the Ripple network are not directly compensated with rewards like in PoW/PoS models. Instead, they are incentivized by the utility and stability of the network, particularly financial institutions that benefit from Ripple's efficiency in cross-border payments. 2. No Mining: Since Ripple does not use mining, it eliminates the need for energy-intensive computations, contributing to fast transaction speeds and scalability. Fees on the Ripple XRP Blockchain: 1. Transaction Fees: Ripple charges minimal transaction fees (typically fractions of an XRP, known as "drops") for each transaction. The purpose of these fees is to prevent network spam and overload. 2. Burn Mechanism: A portion of each transaction fee is burned, meaning it's permanently removed from circulation. This reduces the overall supply of XRP over time, contributing to potential long-term value stability. Klaytn’s incentive structure includes block rewards and transaction fees distributed to Consensus Nodes (CNs) and various network funds, fostering network security, sustainability, and community development. Incentive Mechanisms: 1. Rewards for Consensus Nodes (CNs): Fixed Block Rewards: CNs earn fixed rewards in KLAY tokens for validating and producing blocks. This predictable income incentivizes CNs to maintain active participation and secure the network. Transaction Fees: Users pay transaction fees in KLAY tokens, which are collected by the network and distributed among the CNs as additional rewards, further supporting network security and stability. 2. Block Reward Distribution: Governance Council (GC) Reward: GC Block Proposer Reward: 10% of the block reward goes to the specific CN that proposed the block, incentivizing continuous active participation. GC Staking Award: 40% of the block reward is distributed among all Governance Council members who stake KLAY, promoting network security by rewarding staked tokens. Klaytn Community Fund (KCF): 30% of each block reward is allocated to the KCF to support community development, dApp creation, and overall ecosystem growth. Klaytn Foundation Fund (KFF): 20% of the block reward goes to the KFF, providing resources for long-term network sustainability and future development initiatives. 3. Transaction Fees: User Fees for Network Interaction: Users pay fees in KLAY based on gas usage and gas price for transactions. These fees are then distributed to CNs, incentivizing efficient transaction processing and active participation. Applicable Fees: Transaction Fees: Transaction fees on Klaytn are paid in KLAY and calculated based on gas consumption. These fees support network maintenance by compensating validators and fostering economic sustainability. Binance Smart Chain (BSC) uses the Proof of Staked Authority (PoSA) consensus mechanism to ensure network security and incentivize participation from validators and delegators. Incentive Mechanisms 1. Validators: Staking Rewards: Validators must stake a significant amount of BNB to participate in the consensus process. They earn rewards in the form of transaction fees and block rewards. Selection Process: Validators are selected based on the amount of BNB staked and the votes received from delegators. The more BNB staked and votes received, the higher the chances of being selected to validate transactions and produce new blocks. 2. Delegators: Delegated Staking: Token holders can delegate their BNB to validators. This delegation increases the validator's total stake and improves their chances of being selected to produce blocks. Shared Rewards: Delegators earn a portion of the rewards that validators receive. This incentivizes token holders to participate in the network’s security and decentralization by choosing reliable validators. 3. Candidates: Pool of Potential Validators: Candidates are nodes that have staked the required amount of BNB and are waiting to become active validators. They ensure that there is always a sufficient pool of nodes ready to take on validation tasks, maintaining network resilience. 4. Economic Security: Slashing: Validators can be penalized for malicious behavior or failure to perform their duties. Penalties include slashing a portion of their staked tokens, ensuring that validators act in the best interest of the network. Opportunity Cost: Staking requires validators and delegators to lock up their BNB tokens, providing an economic incentive to act honestly to avoid losing their staked assets. Fees on the Binance Smart Chain 5. Transaction Fees: Low Fees: BSC is known for its low transaction fees compared to other blockchain networks. These fees are paid in BNB and are essential for maintaining network operations and compensating validators. Dynamic Fee Structure: Transaction fees can vary based on network congestion and the complexity of the transactions. However, BSC ensures that fees remain significantly lower than those on the Ethereum mainnet. 6. Block Rewards: Incentivizing Validators: Validators earn block rewards in addition to transaction fees. These rewards are distributed to validators for their role in maintaining the network and processing transactions. 7. Cross-Chain Fees: Interoperability Costs: BSC supports cross-chain compatibility, allowing assets to be transferred between Binance Chain and Binance Smart Chain. These cross-chain operations incur minimal fees, facilitating seamless asset transfers and improving user experience. 8. Smart Contract Fees: Deployment and Execution Costs: Deploying and interacting with smart contracts on BSC involves paying fees based on the computational resources required. These fees are also paid in BNB and are designed to be cost-effective, encouraging developers to build on the BSC platform. Beginning of the period 2024-01-27 End of the period 2025-01-27 Energy consumption 299841.93711 (kWh/a)
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