Why Ripple's XRP isn't a true Cryptocurrency

Folks, you should all stop the wishful thinking that you have spotted a crypto coin that no one has taken notice of and will be the next BTC that will make you lots of money. Period.

XRP, which some folks call Ripple coin, is a by-product that was invented for bank to bank forex settlements. The underlying technology, called Ripple Connect, was designed from the ground up to challenge SWIFT.

For those of you who are old enough to remember, SWIFT had it big in the 80s. It was a club for banks to send money to one another.

One of the problems of sending forex from one country to another is how do you settle in a currency of choice? Here is the problem. Let's say that Bill Gates has a Bank called the Bank of Gates and they receive an order to send some Chinese Yuan to Beijing. To do this, Bank of Gates would have to send a little man with a bag full of cash to the Bank of China in Beijing but in reality, it doesn't. They send an IOU note to the Bank of China. At the other end, the Bank of China may need to send some USD to Washington, and they send an IOU note to the Bank of Gates.

At the end of the week, the two banks has to settle their IOUs, and if the Bank of China owes a lot more USD to the Bank of Gates, it would have to find another way to find that cash, which in this case, would be it's HK branch. Bank of Gates will gladly accept HKD so why not get the HK office to square off the debt?

SWIFT is basically a system to which banks can transfer money overseas by not physically having the currency. I am simplifying the process so that you can understand how it works and there are caveats on how this settlement works but won't go into detail.

So this is what Ripple Connect is able to do in a secure and faster way through block-chaining the entire remittance system.

XRP isn't Crypto

XRP has been mistakenly credited recently in the Saudi adoption of Ripple Connect technology.

People dumb enough to speculate think that XRP is going mainstream. Well folks, its not going to happen.

XRP isn't being used though it could be adopted by the Saudis in the future but you need a crystal ball to see that. For the most part, many assume that XRP will be the most traded crypto after BTC. This is a myth.

If you aren't already aware, SWIFT has been busy fixing its broken system with a new blockchain project. It hopes to convince current users of SWIFT to avoid adopting Ripple Connect.

XRP is tradable in a number of exchanges but the convertibility is somewhat limited as there isn't a debit card that is denominated in XRP as yet. Sure there are plenty of rumours that one will surface but we have yet to see that happen.

XRP isn't going to be the next BTC, LTC or ETH. Many speculators out there like the low entry price of XRP and want to hedge on this to make some money. You could make some money out of this if you buy low (below USD1 buck) but you would be a fool to buy it any higher.

Ripple Connect seems to be the darling of the Fintech space but not XRP. One of the underlying reasons for XRP's relatively slow and poor adoption is that Banks do not want to deal with a digital asset that is convertible. How do you walk into any bank with a thumbdrive full of XRP and exchange that for fiat currency?

The glimmer of hope remains if XRP goes full monty, with all banks accepting it as a form of currency where it is convertible on the spot into your bank account. But the next big step is for a XRP based debit card. You need this to solidify its existence.

Until that happens, I won't be touching this with a ten foot pole.