Ripple (XRP) –Despite the aftermath of Coinbase’s research into the competing currency, Stellar Lumens, little has changed for the XRP currency and Ripple’s work to promote their payment / transfer protocol.
Last Friday, the popular US exchange Coinbase made waves in the cryptocurrency market announcement it would investigate and possibly add five new currencies to its exchange. Listed in the collection was Stellars XLM, a cryptocurrency that not only reflects XRP in functionality, but shares similar roots with parent company Ripple.
In 2011, after selling the infamous Mt. Gox exchange, Jed McCaleb turned his cryptocurrency efforts to developing a new currency. McCaleb, dubbed “the Ripple Protocol,” tried to create a transactional cryptocurrency that would complete the blockchain consensus of members of the network rather than relying on the resource-draining efforts of Bitcoin miners. After securing funding and putting together a development team, the parent company Ripple was founded, which led to the creation of the cryptocurrency XRP. McCaleb’s run at Ripple was short-lived, however, and in 2013 he left his active role with the company in search of new ventures.
In 2014, using what he learned through the development process of Ripple, McCaleb formed the nonprofit Stellar Development Foundation, which eventually led to the creation of the Stellar Consensus Protocol and XLM currency.
Since then, XRP and XLM have been viewed as competing currencies by many investors, especially within the communities. While both projects share a similar amount of overlap in their founding roots and development protocol, they are also ready to tackle similar real-world problems through their digital payments solution. Both Ripple and Stellar target the cross-border payments and remittances arena, especially in developing regions of the world, to provide affordable and secure money distribution to the massive undebanked populations in these countries. So far, Stellar has secured the support of IBM on several of its endeavors, but XRP has managed to lay most of the foundations through the efforts of parent company Ripple.
Now, with the advent of the Coinbase announcement, XRP investors overwhelmingly got the news as harmful to their own currency while Stellar continues to thrive. Since Friday, the XLM currency has appreciated 55% in value, rising from $ 0.18 to $ 0.28 at the time of writing (reaching $ 0.32 at some point in a fever frenzy). However, the price movement for Stellar, which is still making up for the significant losses in the market in 2018, is largely based on a deck of cards. For one thing There is no guarantee of a Coinbase listing. It’s likely that Coinbase will target XLM as both a popular and inexpensive coin to offer to its 13 million users, but they also have an incentive not to burn their investment base. This means that if the price of Stellar Lumens starts to rise at an unrealistic rate, this will put pressure on Coinbase to Not list the coin and avoid exposing their consumers to bloated, inflated currency.
Additionally, Stellar’s price movement is built by the expectation of higher profits from Coinbase and not its actual launch. Stellar has made quite a stir lately with the announcement of time and one supported by IBM Stablecoinbut does not offer investors a 55% increase in value in development at this moment. The last time speculation about a Coinbase listing was rampant, XRP plummeted from $ 3.80 to $ 0.45. The same could happen to Stellar, and it does nothing to improve the state of XLM or the cryptocurrency industry other than showing the propensity for frantic price hunting.
Yes, XRP is missing out on an opportunity to reach more investors by not partnering with Coinbase. But like Ethereum founder Vitalik Buterin expressed When he believed, weeks ago, that all centralized exchanges were burning in hell, cryptocurrency communities are wildly fixated on being introduced through listings. Sure, for investors, greater engagement equals greater potential returns. But at some point the market will be saturated with coins, exchanges, and the potential price implications, without being able to grow solely through actual innovation. Giving all the attention to price growth from a wider listing is almost the definition of a pyramid scheme: anyone who buys XLM today is hoping that an unhappy Coinbase user will be willing to buy at a higher price when the time comes .