Suddenly, there’s hype everywhere over Ripple as the digital currency is on a tear. But if you are thinking of selling some ETH to jump on the XRP bandwaggon, it may be a good idea to do take a step back and do the numbers first.
Banks in Japan and South Korea are using the Ripple Blockchain in order to effect trans-global payments, the San Francisco-based start-up announced at the end of the week. That announcement pushed XRP, Ripple’s digital currency, skywards by more than double its market capitalization to settle in second place by the weekend, at $51 billion in total value.
For the moment, at least, Ethereum is no longer the world’s second largest Crypto by market place. But don’t count on that remaining the case for long. For twenty-eighteen may be about to become Year of the Ether.
For one, irrespective of how banks may be beta testing Ripple’s platform for digital payments, Ethereum is still the dominant network when it comes to all things Blockchain. In the last 12 months, Ethereum’s network has gone from handling just 5,000 transactions a day in January to over 1 million transactions a day in December. As far as core utility goes, it really doesn’t get much more exponential than that.
Then there is the issue of supply. Circulating supply is a big deal when it comes to Crypto; if it increases too much, any price increases are likely to be undermined quickly by the vast increase in market saturation that takes effect as a result. Consider that while Ripple still holds in excess of 60% of the total supply of all XRP, the amount of Ether, although increasing still, is now in the final throes of rising. In other words, it is likely that before long, Ethereum will be pushing deflation on other altcoins as it consumes vast quantities of value, just like Bitcoin is today. The difference between Bitcoin and Ethereum however is that the latter burns up every time its core utility is employed (which as we can see, is growing something in the region of 2000% a year right now!) In other words, if you think Bitcoin had a helluva year in 2017, you ain’t seen nothing yet!
In a special feature published on the industry’s largest crypto news site CoinDesk titled “2017 was Bitcoin’s Year. 2018 Will Be Ethereum’s,” Jez San, the chief executive of FunFair Technologies put it this way:
Think of bitcoin as DOS and ethereum as Windows or Mac OS. There is nothing wrong with DOS. It came first and was an essential part of the computer’s success.
Us geeks grew up on DOS, but computers only went mainstream when Windows and Mac OS appeared. DOS is difficult to learn, tricky to program and few applications ever ran on it. Windows and Mac OS support and encourage applications to be built and are ultimately easier for people to use.
Ethereum is like Windows and Mac OS, and as a result, developers are creating applications in the thousands.
ETH & BTC Price Parallels
For all the animosity between Ethereum and Bitocoin Blockchain camps, price parallels between BTC and ETH are in fact remarkably correlated. That’s because Ethereum is really nothing more, or less, than a highly sophisticated Bitcoin, with an exponentially-increased utility to boot in the form of token-making source code containing extra escrow-style features inside its ledger. As a result of these additional features, and because it burns up when it is used, it makes sense that there’s about four times the total number of ETH as for BTC. That is not true when it comes to XRP: the 38 billion unit supply, over half of which is privately owned, poses massive price risk for new purchasers, all the more so after a recent rise in the value of the digital currency.
It’s impossible not to see the similarity between January 2017 and January 2018. Ethereum is at exactly the same price point – in the $750-to-$800 region – as was Bitcoin this time last year. Given that bitcoin is now in the $15,000-region, showing no signs of slowing in its steady on-the-up climb towards the trillion dollar market cap, it just may turn out that ETH is headed towards the ether this year. XRP on the other hand is untried-and-untested, let alone to secure a place as the world’s number 2 crypto for any length of time.
If you’ve waited patiently all year for ETH to leap out the bag, don’t jump out the rocket to ride the ripples of a brief price spike in XRP only to lose out on something that will, for want of a better analogy, take us to the ether of price appreciation in digital assets, to something the likes of which we haven’t seen before ever. There is much more to come for Ethereum, and it’s all lined up and headed this way, this year.