Why XRP will overtake Bitcoin

The short answer: Utility matters more than Storing value.

There, you can stop reading.

The long answer:

Ripple, on September 21st, 2018, for the second time, briefly became the 2nd largest crypto by market cap. Second only to Bitcoin. This is not a triumph of Centralization over Decentralization, rather it’s a triumph of Utility over Stores of Value. And utility will be the reason it will eventually overtake Bitcoin for Number 1.

Craig Wright explains this well (https://medium.com/@craig_10243/q-a-written-interview-the-answers-part-3-71116e036958). Using Spain as an example of a Gold rich nation, versus England and France, which had industry — Spain was poor in comparison, and bankrupt over time.

“Gold is not wealth. Goods, productive services and other aspects of consumption and production define wealth. The Spanish kingdom imported vast amounts of goods and services paying for these (and causing massive inflation) with the plundered silver, but this only led to other nations (such as the Dutch) developing at Spain’s cost.” ~ Craig Wright,

https://medium.com/@craig_10243/q-a-written-interview-the-answers-part-3-71116e036958

Bitcoin will benefit from simple movement of capital from all the Institutional money flowing in. The first ETFs will benefit the coins within their respective indexes, which will first be in regards to top 10, 20…100 coins by market cap. Then more indices will be created, spotlighting things other than market cap, such as utility vs. stores of value vs. tokens vs. blockchains…Specialty indices targeting industry related crypto, like a basket of marijuana cryptos, or gaming, or…

So, speculators just wanting to make the quick buck will benefit from simple capital flows…at first. XRP will benefit from this as well. But then the cryptos with actual use cases, and real world adoption such as Ripple will overtake the HODLers very quickly.

It’s because of the power of the network, and the power of consumption spent for utility.

Cross-border money transfers is a real world problem that requires a real world solution. The current cross border solution, SWIFT, is too expensive and takes too long (3–4 days vs 4 seconds with XRP). The value of Ripple can have an impact of up to 60% in savings for money transfers (according to their use cases). With $155 Trillion dollars of cross-border payments being transacted, this is a huge solve for banks. And if Ripple becomes the default solution, with banks using XRP on a daily basis, then the price of XRP will continue to rise as banks buy XRP in order to smooth currency transactions.

And not just banks, Nations needing to transfer dollars and pesos and Thai baht, et al, need this solution as well.

With more Banks, and Nations, and Institutions needing this solution the network will grow.

I just don’t see Bitcoin playing at the 155 trillion level by just remaining a store of value.

Imagine when XRP becomes the norm for settling these cross border transactions. A certain density is reached, and then, like water spilling over, it will become expected. The conversation will go like this:

BANK OF AMERICA: Okay, transferring 100 gazillion Bratsolovianos. You use XRapid, right?

BANCO DEL MONTOVIDAROVIA: No, sorry.

BOA: Oh…well, you’ll have to set that up first, otherwise it will cost 60% more.

BDM: Gotcha. Looks like we’ll have to stockpile some XRP first…

Money will go to where it is treated best. The goal for banks is to either: make money, or save money. In Ripple’s case: it’s both.

“But, what about disintermediation of the banking industry, and decentralization and borderless, and and and…”

Well sir, I think you may be waiting a tad til your utopian vision gets fully realized. In the meantime may I suggest using simple robber logic: If you want to make money, go to where the money lies: banks!

Sure, the longview may be that Banks get disintermediated by peer-to-peer lending, and we’ll all buy our houses, cars, and do our lending through crypto with our neighbor, without the need of a trusted third party.

Until that distant day, Ripple is solving a problem that exists Now.

Bitcoin, on the other hand, is a little like a solution looking for a problem. E-money already exists in the form of online banking, stocks, bonds and other monetary instruments. Sure, paper money still gets carted around — ask any pot shop. But for most businesses and individuals, banking at an actual bank is a quaint little thing grandparents do. Everybody else uses e-money, they just don’t realize it.

Crypto does solve for nation-states inflating currencies, but that’s a more immediate problem for countries affected by bad policies, such as Venezuela and Zimbabwe. Everywhere else inflation is only a problem for those that don’t actually own an appreciating asset — like a house. Or lack a skill that has a rising wage. For those that don’t have either while living in an inflationary nation — well, you’re probably poor, or about to become poor.

Crypto is only a solution for those that have some.

For most countries crypto is not seen as a solution, rather as a threat to sovereignty. World banks will not give up their ability to control things like inflation, and the pricing of goods and services without a fight. And buying up the supply of crypto will just increase the price, so for awhile BTC will benefit, and gazillionaires will be made. But, when you look at all the cryptos that are solving the largest of economic problems right now, well you’ve got Ripple...and Ripple.

I think other cryptos, such as Kin, are solving immediate issues as well, but will take more time to overtake the advertising and reward paradigm. They will rise, but more slowly, since it’s hard going head to head against an existing industry.

But XRP does not compete, it provides a service. If there’s any competition then it is SWIFT, which, because of their high fees, slowness of execution, and necessity of having the necessary funds at destination — is no competition at all.

Instead of competing with banks, Ripple is providing a service. They have no interest in becoming the new Bank. They just want to make money by becoming a solution provider for banks.

Banks will use this utility coin, and with the growth of the network XRP will rise and rise.

Arguments:

• XRP is not a crypto!I get that it lacks some of the features which define crypto currency, XRP is not Decentralized and is controlled by a single entity being a couple of them. Well, it’s listed on CoinMarketCap.com, so I’ll vote for pragmatism and go with ‘if it’s good enough for CoinMarketCap.com, it’s good enough for me.’
• The price would have to go to $3 in order to overtake Bitcoin! That’s like 5x the current price!Well, it’s already gone up past $3 once already, which would overtake Bitcoin’s current market cap. That was without the 100 clients signed up that it has today. Big pocket clients such as Santander, American Express, PNC Bank, UniCredit, UBS and Standard Chartered.

Dreamers dream…Until the day crypto becomes cash, and we become banks. When nations fall and the individual rises up, staring into each other’s eyes, recognizing each as their own sovereign kings and sovereign queens…

Until that day, we will have to wait awhile…Right now, we have Ripple.