XRP Surges Nearly 40% Amidst Warnings of a "Huge Dump"

  • Ripple's XRP has surged nearly 40% in the past 24 hours.
  • The XRP price is being driven mainly by speculation as its financial products have yet to deliver. 

San Francisco-based Ripple Lab, Inc.’s XRP token has surged over 40% in the past 24 hours and is currently trading at $0.5305 according to data from CryptoCompare. As covered on CryptoGlobe, the XRP price increased by 13% on September 20th.

hour_CryptoCompare_Index_XRP_BTC_337_11537533489522.pngXRP 24-Hour Price Chart via CryptoCompare

There are several possible reasons, or factors, which may have contributed to the significant increase in the cryptocurrency’s price. As pointed out by the Ripple company’s chief technical officer, David Schwartz, there’s a supportive ecosystem being developed around the American firm’s suite of financial products.

Web Monetization With XRP

Schwartz mentioned that another San Francisco-based startup, Coil, is “testing their web monetization flat rate product out on Wikipedia with XRP.” As described on Coil’s official website, users have to sign up through their website and then pay a fixed monthly subscription fee.

Somewhat similar to how the Brave browser aims to integrate payments with Basic Attention Token (BAT), when Coil’s registered users visit a “supported website”, the company donates a certain amount of the users’ deposited XRP to the website’s creator “on their behalf.”

According to a Medium post by Stefan Thomas, the founder of Coil, his platform will introduce a more effective monetization system, so that content creators are fairly compensated for their work.

"Exaggerated" Market Reaction

Despite this seemingly positive development for the XRP token, many have argued why people would want to start paying for content on the internet, considering most services and information sources are free to use.

It appears the market’s reaction may be “exaggerated”, as noted by Tim Enneking, the managing director at Crypto Asset Management. Moreover, Ripple’s xRapid product, which is reportedly designed to reduce the transaction costs associated with cross-border transactions, has not even been launched yet.

As covered on CryptoGlobe, the Ripple company recently partnered with the PNC Financial Services Group, one of the largest banks in the US. Notably, PNC has also joined RippleNet, a decentralized global network of banks and payment providers, and is reportedly planning to use Ripple’s xCurrent in production.

Exchanges "Pumping", "Huge Dump" In October

As described on Ripple’s official website, xCurrent aims to be “an enterprise software solution that enables banks to instantly settle cross-border payments with end-to-end tracking.” Other financial institutions that have started using Ripple’s suite of products include Saudi Arabia’s National Commercial Bank (NCB).

However, at this point, all of Ripple’s financial products are in their early stages of development and adoption. So, it seems traders and investors are overreacting to Ripple’s recent announcements.

Commenting about the surging XRP token, twitter user XRPcryptowolf warned there might be “a huge dump” in October. He also claimed that cryptocurrency exchanges were mainly responsible for “pumping” XRP’s price, as they may consider Ripple’s partnership with PNC and the upcoming (annual) Ripple SWELL conference as “good news.”

Other seemingly positive developments for Ripple include its chief marketing strategist, Cory Johnson, announcing that the American fintech firm will partner with crypto exchange Bittrex, Bitso, and Philippine-based Coins.ph to conduct cross-border payments with xRapid.

$5 Trillion Foreign Exchange Market

As noted by several crypto market analysts, it’s largely “speculation” and “rumors” that are driving not only the XRP price, but also most other digital currencies. Twitter user Rachel Lee seemed to have jumped to a hasty, and maybe a far-fetched, conclusion that “Ripple was strategically targeting specific corridors which aligned with [the] $5 trillion a day Foreign Exchange market.”

While Ripple may actually have “working products”, according to a recent research report by InvestInBlockchain, these cross-border payment solutions are nowhere near mainstream adoption like services such as PayPal.

Whether or not Ripple’s financial technology will be effective in the long-term remains to be seen. The level of competition now in the crypto industry has also reached new heights, as Stellar (XLM), a 2014 fork of the Ripple protocol, also aims to provide an international payments solutions.

Joseph Lubin: Facebook's Libra Is a 'Centralized Wolf', Raises Privacy Issues

Ethereum co-founder Joseph Lubin recently published a blog post in which he claimed that Facebook’s cryptocurrency Libra is “a centralized wolf [disguised] in centralized sheep’s clothing.”

Lubin, a Canadian entrepreneur who’s also the founder of ConsenSys, a Brooklyn, New York-based Ethereum ( ETH )-focused development studio, acknowledged that the Calibra project’s goal to send money quickly and cheaply should be a key design consideration of modern internet-based currencies.

Can Facebook Be Trusted?

However, the Princeton University graduate pointed out that most people would not be able to place enough trust in Facebook’s management - as he wrote :

Don’t I need to trust Facebook and other intermediaries to trust Libra?

Interestingly, Lubin also noted that the name of the social media giant, Facebook, is “hardly mentioned” in the Libra crypto project ’s whitepaper or its technical documentation. Moreover, Lubin believes that Facebook’s new cryptocurrency project is “not eliminating” the need for “subjective” trust, which most decentralized currencies do. Instead, he thinks the social media firm’s crypto is “imploring us to trust in Libra.”

Merchants Must Trust the “Initial” Libra Network Will Operate “Responsibly”

Going on to allege that Facebook’s cryptocurrency wallet Calibra will “seek trust” as using it will require users to provide their government-issued IDs for verification, Lubin also pointed out:

It will need merchants to trust that their initial network will responsibly run nodes to validate transactions on the system.

Younger Users Prefer Decentralized Payment Protocols

The former VP of Technology at Goldman Sachs further mentioned that the younger generation prefers “payment systems built on truly decentralized protocols” - rather than having to verify their identify and share other personally identifiable information on centralized platforms like Facebook.

Concerns Regarding Users’ Financial Privacy

The ConsenSys founder also noted that Facebook, as a company, makes a lot of money off personal user data . Should the Libra project move further, as it is currently facing various regulatory challenges, then some of Lubin’s concerns might seem reasonable:

What happens when you wrap your personal finances up in this, too? That our digital identity will never merge with Libra’s financial data is a hard perception to shake. It is almost a given, even if they have the best of intentions—“accidents” and incursions happen when relying on centralized architectures.

Lubin went on to reveal that the developers at ConsenSys had already begun to review the source code shared by the Libra project’s creators. He claims that the technical documentation and other details released by Libra’s founders is quite similar in some ways to Ethereum, the world’s largest smart contract platform.

While admitting that Facebook’s project will (most likely) be “well executed, technically”, Lubin remarked:

As of today, Libra has made a bold promise, and it’s one that Facebook needs to keep. Until then, Libra is like a centralized wolf in a decentralized sheep’s clothing.