Ripple building Worldwide Cryptocurrency Remittance Network
The organization behind Ripple (XRP) is building a worldwide remittance network. The RippleNet network of remittance corridors reaches 40 countries on six continents, a Ripple press release claims.
Uniquely, Ripple Net could tap a potential remittance market of $2 billion. To demonstrate, some highlights of Ripple’s growing remittance business include:
- Instarem and RationalFX, are building RippleNet corridors between the United Kingdom and Malaysia, Vietnam, Sri Lanka, Bangladesh, and Indonesia.
- Furthermore, Remitr and FlutterWave have built the first cryptocurrency remittance corridor between North America and Africa. Notably the two companies have established RippleNet corridor between Canada and Nigeria.
- BeeTech and InstaReM are reportedly building RippleNet corridors connecting Brazil with Spain, Portugal, Germany, France, and Portugal. Obviously this is big because it links a major emerging market (Brazil) with the Eurozone.
- In addition, MoneyTap has built a RippleNet remittance corridor between Japan and Thailand. MoneyTap’s solution reportedly includes an app designed to enable Ripple (XRP) transfers from Japanese banks.
- MoneyTap is a potential game changer because it offers a revolving line of credit based on digital currency accessed through a smartphone. Moreover, it is possible to send funds to a MoneyTap account in Thailand from an ATM in Japan.
How the RippleNet Remittances might Work
The RippleNet corridors are apparently a sidechain that allows remittance companies to get around the blockchain scalability problem. A sidechain is a digital shortcut around the blockchain that offers far higher transaction speeds and volumes.
Under these circumstances, a good way to think of RippleNet is as a six-lane superhighway for Ripple. In contrast, the traditional blockchain is a dirt road full of pot holes.
The hope is that the RippleNet will move thousands of transactions a second. Comparably a freeway allows hundreds of cars to move in the same direction in a minute.
Has Ripple (XRP) Solved the Blockchain Scalability Problem?
Therefore, an obvious use of the RippleNet is to solve the blockchain scalability problem. Traditional blockchains like Ethereum (ETH) and Bitcoin (BTC) are limited to between five and 20 transactions a second.
That makes it difficult for cryptocurrencies to compete with unencrypted digital currencies like Mpesa. For example, Vodafone’s Mpesa mobile money reportedly processed 529 transactions a second in December 2016.
The advance of RippleNet remittances does not mean Ripple (XRP) could have solved the blockchain scalability problem. Instead, Ripple has increased speed and volume the old-fashioned way by decreasing encryption.
Essentially, Ripple leaves the blockchain to make the trip, and reenters it at the destination. An advantage to this method is a permanent record of the transaction in the blockchain.
Ripple is taking a Huge Risk with Remittances
Obviously, that reduces security and increases vulnerability to hacking. Thus, the Ripple Team and its partners are taking a huge remittance by sending remittances through RippleNet.
Under these circumstances, news stories about a RippleNet hack could destroy Rippple’s Coin Price and Market capitalization. Such a hack is likely because remittances are big business.
For instance, the World Bank estimates that people sent $613 billion in total remittances in 2017. Therefore, both the opportunity and risk for Ripple in Remittances are huge.
Ripple hopes to tap that market by offering a remittance process that is faster, more transparent and more secure than existing solutions. For instance, it reportedly costs a Thai worker living Japan a day’s wages to send remittance money home. In contrast, Ripple (XRP) remittances could cost as little as $1. To make matters worse, such a worker has no way of knowing if the funds arrived.
In contrast, MoneyTap, Siam Commercial Bank and SBI claim their RippleNet remittances are cheaper, offer nearly instant transmission, and instant notification of receipt of funds.
How Ripple could Make Remittances Safer and more Secure
An inherent advantage to MoneyTap’s system is that the funds go to a bank account with a debit card and ATM access. In addition, governments insure bank accounts.
Most importantly, nobody has to risk his or her life by going to the money transfer store to pick up cash. Visiting a wire service office could be dangerous because crooks know people leaving it have cash.
If they work, remittances could make Ripple (XRP) the first cryptocurrency to reach a mainstream market. If they blow up, remittances have the potential to destroy Ripple.
Speculators should watch Ripple closely because its Coin Price and Market Capitalization could go on a roller coaster ride of difficulties because of remittances.
For the record, Ripple (XRP) had a Coin Price of 42.7¢ and a Market Capitalization of $17.83 billion on 12 October 2018. Those numbers were A 24-Market Volume of $892,931 million XRP is driving those numbers.