a highway at night with speeding cars
  • xRapid makes cross-border money transfers in minutes (and up to 70% cheaper than current systems).
  • xRapid is now live and used commercially by at least three financial companies.
  • xRapid uses Ripple’s cryptocurrency XRP to settle payments.

Updated on October 4th, 2018 to include new xRapid developments.

Ripple’s astonishing price rise was driven by its partnerships with banks like Santander, American Express, and Western Union. However, most people misunderstood one thing:

The banks weren’t actually using the cryptocurrency XRP yet.

That’s set to change with the introduction of xRapid. Announced at the Ripple Swell event in October,  three financial services are now officially using xRapid to settle international payments.

xrapid - how it works

One of those services, MercuryFX, says xRapid improved transfer speeds from the UK to Mexico from days to just two minutes.

Other banks have reported 40%-70% savings when piloting the xRapid service.

But what is xRapid and how does it use cryptocurrency? First, let’s clear up a few terms.

The Difference Between Ripple and XRP

Ripple is a company that aims to speed up cross-border payments. Ripple has partnered with over 100 banks and boasts a range of money transfer services using blockchain and cryptocurrency.

XRP is the cryptocurrency created by Ripple. It is not currently used by most banks, but it’s a big part of their future plans and the xRapid service.

The Current State of Ripple’s Bank Partnerships

Most of Ripple’s 120+ bank partners are using a Ripple service called xCurrent. It uses blockchain technology to help banks make faster payments and communicate better.

A list of Ripple bank partnerships and logos

But it does not use XRP to settle transactions.

Ripple intends to use xCurrent as a way to onboard its banking partners before convincing them to upgrade to xRapid.

What Is xRapid?

xRapid aims to make those transactions even faster and cheaper. Most importantly, it does use XRP to settle the money transfer.

XPR is used as a “bridge currency” in the process.

Here’s how it works…

Let’s say Bob lives in the UK and wants to send £1,000 to Alice in India.

Using xRapid, Bob’s bank instantly transfers the £1,000 into XRP, via a cryptocurrency exchange.

The XRP is then instantly converted into Indian rupees via a partner exchange in India.

The fees are almost zero and the whole process takes a matter of seconds.

Had Bob used the traditional bank system, it would take days and cost him a large fee.

diagram of xRapid and RippleNet

xRapid: An End to Nostro Accounts

The description above is a very quick outline of how xRapid works, but there’s a reason why it’s so powerful:

Banks need liquidity (i.e. lots of available money) to make a foreign exchange. And the current way they source liquidity is wildly inefficient.

Let’s go back to Bob and Alice. To send money to India using the traditional system, Bob’s UK bank needs a “nostro account” in India. The nostro account is pre-funded with millions in local currency. (This is the liquidity).

Banks have pre-funded nostro accounts like this in every country with a different currency to facilitate cross-border transfers. It’s expensive and incredibly inefficient.

By switching the local nostro accounts for a digital cryptocurrency, there’s no need for bank accounts full of foreign currency all over the world. It’s faster, cheaper and more efficient.

Got It. But Are Banks Using xRapid?

Three financial companies are currently using xRapid on a commercial scale. They are Catalyst Corporate Credit Union (a financial firm), Cuallix, and MercuryFX (money transfer services).

The vast majority of Ripple’s other bank partners, like Santander, are using xCurrent, but Ripple is trying to nudge them towards xRapid. Some banks have begun testing the xRapid product and reported 40-70% savings.

Ripple CEO Brad Garlinghouse said that “dozens of banks” will be using xRapid by the end of 2019.

But it’s a big task. As Ripple’s Sagar Sarbhai explained, “a couple of years ago the narrative was: blockchain good, crypto bad.” Banks were open to blockchain technology, but wary of using cryptocurrency to settle payments.

Sarbhai says that’s beginning to change.

“I think that narrative thankfully is now changing because policymakers, regulators are seeing that there is a strong benefit that digital assets, cryptocurrencies bring in.”

xRapid Now Commercially Available

This is the moment that most XRP holders have been waiting for. xRapid is considered Ripple’s silver bullet because it actively uses the XRP token to settle payments.

If more banks adopt xRapid, the volume (and price) of XRP is expected to increase dramatically.

Why? Because banks and (especially) cryptocurrency exchanges will have to hold large sums of XRP in order to make the transfer. The transfer itself will only require XRP for a matter of seconds, but the services still need a pool of cryptocurrency to execute the trade, thus driving up demand.

Let’s look at this way. If xRapid replaced just 1% of the current international bank transfers through SWIFT, the daily volume of XRP would increase 250x.

Ripple is Quietly Building Exchange Partners

To make these instant XRP trades, Ripple is busy partnering with as many crypto exchanges as possible.

For example, the company has partnered with Bittrex to facilitate transfers between US dollars. They’ve partnered with Bitso for exchanges in Mexican pesos and Coins.ph for Philippine pesos.

So don’t be surprised if the banking partners are slow to adopt xRapid. The exchange partners must come first.

Update: Ripple Merges xRapid into One Service, RippleNet

Since we first published this article, Ripple appears to have removed any mention of xRapid and xCurrent on its website.

Instead, it is now just one product: RippleNet.

It looks like Ripple is bundling its services together in one simple package. This will make it much easier to convince banks to ultimately shift to XRP transfers.

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bitcoin ethereum and ripple coins on a black background

The flippening is a hypothetical moment in the future when ethereum, ripple, or another cryptocurrency overtakes bitcoin.

Bitcoin is currently the largest cryptocurrency on the planet, but it’s not impossible to imagine ethereum or ripple catching up.

At the start of 2017, bitcoin had a true monopoly in the world of digital currency. It accounted for 87% of the total crypto market value. By January 2018, that figure had fallen to 33% with ethereum, ripple and others eating into bitcoin’s market share.

Some predict that one of these altcoins (alternative cryptocurrencies to bitcoin) will overtake bitcoin entirely. That future moment is the flippening.

The Rise of Altcoins

While bitcoin dominated the blockchain space for eight years, new cryptocurrency projects were stirring under the surface.

Vitalik Buterin launched Ethereum – a “world computer” which took the concept of blockchain way beyond money transfers. Ethereum became a platform for companies and developers to build anything on the blockchain.

Ripple emerged to revolutionize the way we transfer money between banks and across borders. Ripple’s native cryptocurrency XRP was the fastest growing token in 2017, briefly overtaking ethereum.

These altcoins gained huge media attention through 2017 and rose more than 1,000% in value. The momentum lead many to predict that ethereum and XRP could surpass bitcoin in the coming years.

The Flippening: A Measure of Market Capitalization

It’s worth pointing out that the flippening refers to market capitalization (or market cap), not the price per coin.

For example, XRP is worth just 27c per coin, compared to ethereum’s $195 and bitcoin’s $6,332.

Bitcoin is by far the most expensive coin because there are only 17 million in existence (there are 100 billion XRP tokens and more than 100 million ethers).

Bitcoin, Ethereum and Ripple: Where Do They Stand?

At the time of writing, the top three by market dominance looks like this:

1. Bitcoin – 56%
2. Ethereum -10%
3. Ripple – 6%

chart depicting bitcoin, etheruem and ripple market capitalization
Chart: CoinMarketCap

Through the course of 2018, “the flippening” has moved further away. Bitcoin has re-established its dominance, while altcoins like ethereum and ripple have fallen. This is perhaps because bitcoin is seen as a “safer” haven during the long market downturn.

Could the Flippening Really Happen?

Theoretically, yes. Bitcoin has a number of practical issues that hold it back, not least its transaction speed when compared to other blockchains. There are faster, more efficient projects out there that could, ultimately, become more valuable than bitcoin.

However, bitcoin has one major advantage: reputation. 71% of Americans have heard of it. Could the same be said for XRP?

For most people, bitcoin is the first cryptocurrency they buy. On many of the major exchanges, you have to purchase bitcoin before you can buy an altcoin like ethereum or ripple.

Not only that, but Wall Street is slowly embracing bitcoin. We’ll soon have a bitcoin exchange-traded fund (ETF) and institutional money pouring into the market. That money will go to bitcoin first.

In other words, it’s very difficult to knock bitcoin off the throne, because it’s engrained as the world’s first and largest cryptocurrency.

Ethereum or Ripple?

Let’s say the flippening did happen. Which coin is the most likely to overtake bitcoin?

Ethereum has tremendous practical application. The likes of JP Morgan, MasterCard and Microsoft are all experimenting with the Ethereum system. Others are building dapps, smart contracts and new cryptocurrencies. These projects each require ether as a payment token. As Ethereum grows and develops, the demand for (and the price of) ether may rise higher than bitcoin.

Ripple also has a practical application. Ripple aims to deploy its cryptocurrency, XRP, as a “bridge currency” for banks to transfer money abroad without fees or delays. If the world’s banks opt to use the XRP token, the market cap could soar beyond bitcoin’s. It’s worth pointing out, however, that no bank is yet using XRP beyond a pilot scheme.

Ultimately, Ethereum remains the best candidate if the flipping were to happen, simply because it is easier to buy than ripple. Only a handful of exchanges allow you to purchase ripple with fiat currency (like USD). You can’t buy ripple on Coinbase, for example. Instead, you would have to purchase bitcoin or ethereum before transferring it to another exchange to buy ripple.

The difficulty in buying it means it’s unlikely to overtake bitcoin anytime soon.

Does It Matter?

Ultimately, bitcoin, ethereum and ripple each exist for very different reasons. They are not direct competitors, so comparing them as such doesn’t get us very far.

However, it’s still an important (hypothetical) moment. If another coin overtook bitcoin, it means that particualr coin was being used in a meainstream, day-to-day, practical way. And that’s an exciting prospect for blockchain technology.

hooded man with hand out bitcoin regulation

Welcome to your daily Block Explorer roundup. Hope you had a great weekend! Today we’re looking at bitcoin regulation as Coinbase’s UK CEO claims we need more. But first, let’s take a glance at the markets.

All the top 20 coins are in the green today after a fairly quiet weekend.

1. Bitcoin – $6715 (+ 0.7%)
2. Ethereum – $277 (+ 1%)
3. Ripple XRP – $0.33 (+ 1.8%)

Things are strangely calm out there at the moment. In fact, bitcoin is around the least volatile it’s been all year. Historically, a period of calm is usually snapped by a wild swing upward or downward, so don’t be surprised if we see some big price movements this week.

Biggest winner and loser in the top 20

IOTA crypto logo transparent background

Biggest winner: IOTA (+ 15%)
Biggest loser: Zcash (- 0.1%)

IOTA is leading the pack today after Fujitsu said it is “well-equipped to help roll out IOTA as the new protocol standard.” IOTA aims to facilitate the ‘internet-of-things’ using blockchain technology, so a partnership with IT giant, Fujitsu, will open a lot of doors.

Does crypto need more regulation?

“[Regulation] is the best way to provide individuals and institutions a safe environment to invest.”

That’s the verdict from UK Coinbase CEO, Zeeshan Feroz. He told CCN that regulation is a good thing for the cryptocurrency market in 2018, explaining that a lack of regulation leads to risk in the market.

“We see the value in having some form of regulation for crypto exchanges as a means of ensuring due diligence and transparency in the crypto space.”

The issue of regulation in crypto is a controversial one. Many claim it will bring transparency to the market (and allow institutional investors to wade in). Others, however, see it as destroying the values and decentralized ethos on which bitcoin was built.

Where do you stand on bitcoin regulation? Do we need more to help attract  investors? Or should we keep bitcoin as decentralized as possible? Let me know in the comment section below.

Wild bitcoin price predictions 2018: from $3,000 to $20,000 +

Over the weekend we’ve had yet more wild price predictions for bitcoin.

The bull: Tom Lee of Fundstrat Global Advisors doubled down on his previous prediction that bitcoin will rise above $20,000 by the year-end.

He says hedge funds are playing a bigger role in bitcoin behind the scenes which could lead to a surge in prices. He also pointed to the correlation between bitcoin and emerging market stocks.

The bear: Anthony Pompliano had originally predicted a $50,000 price tag by the end of 2018. He now says he was wrong, by about four years.

He sees bitcoin plunging to $3,000 and says the market might not bottom out until late 2019. As for a full recovery, that’s not on the cards until 2023, based on how long it took bitcoin to recover from previous spikes.

With four months left in the year, where do you see the price of bitcoin going? $3,000 or $20,000+?

That’s all for today’s roundup. We’ll see you back here tomorrow.

In case you missed it: Why do Bitcoin ETFs Keep Getting Rejected?

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woman with bitcoins over her eyes

Welcome to your daily Block Explorer roundup. Crypto prices are back in the green after taking a beating yesterday. Here’s everything you need to know:

Bitcoin is regaining its composure after the rejection of nine bitcoin exchange-traded funds (ETFs). As expected, the crypto market initially crumpled on the news, but bitcoin is now holding above the crucial $6,500 mark.

1. Bitcoin – $6,545 (+ 1.6%)
2. Ethererum – $276 (+ 0.8%)
3. XRP – $0.33 (+ 0.6%)

What’s behind today’s stability? Controversially, the Securities and Exchange Commission (SEC) is taking a second look at Wednesday’s ETF decision.

SEC Commissioner, Hester Peirce said the decision was initially delegated to staffers, but senior officials will now review the rejections themselves.

SEC commissioner Hester Peirce tweet about bitcoin etf

We’re still unlikely to see an approval, but it means the SEC is taking these proposals seriously.

Biggest winner and loser in the top 20

tron logo on black background

Biggest winner – TRON (+5%)
Biggest loserDash (- 14%)

TRON is flying high in the top 20 today thanks to its addition to the CoinPayments platform. That means 2.2 million buyers and sellers can now use TRON as a payment option.

China cracks down on crypto (again)

The Beijing district of Chaoyang has officially banned all cryptocurrency promotional events. Shopping malls, event halls, and public spaces are now off-limits for crypto events and material.

What are their reasons? The authorities cited “prevention of money laundering” and “security and stability of the financial system.”

This comes less than a week after Chinese social media, WeChat, reportedly blocked cryptocurrency and blockchain accounts on its platform. China is also moving to stop overseas exchanges from selling in China.

The news helped to push the market into the red yesterday, but traders have mostly shrugged it off.

Ripple fires up xRapid

ripple logo on blue background

xRapid is Ripple’s silver bullet. It’s a service that instantly converts currencies around the world in the blink of an eye (with low fees). Crucially, for XRP holders, it uses the XRP token to make the exchange.

Let’s say you want to exchange Japanese yen to Mexican pesos. The yen is converted to XRP (through the xRapid system). XRP is then converted to pesos. Ripple says it’s 40-70% cheaper than the current system and takes seconds rather than days.

To make it happen, Ripple has announced a partnership with Bittrex – a US crypto exchange – to facilitate the exchange of US dollars. Ripple has also partnered with Bitso in Mexico and Coins.ph in the Philippines to power the exchange to Mexican and Philippine pesos respectively.

We’re still a long way from seeing xRapid deployed within the banking system, but Ripple is slowly building the architecture behind the scenes.

That’s all for today’s roundup. We’ll see you back here tomorrow for more.

Today’s further reading: What is Ripple? The Bankers’ Network

Before you go… are you a trader or a HODLer?

We’re working to bring you an all-new Block Explorer, and we’d like your help. Please take a few minutes to let us know how you use crypto and how we can make Block Explorer better.

Take our 3-minute survey here.

New York financial district SEC

Welcome back to your daily Block Explorer crypto roundup. Today we’ll dive into the upcoming bitcoin ETF decision. First, let’s take a look at the market overview:

Bitcoin finally cracked $6,500 in a blistering overnight session on Wednesday. The total crypto market capitalization jumped $12 million in an hour with Bitcoin up more than 4%.

1. Bitcoin – $6,680 (+ 4%)
2. Ethereum – $285 (+ 1.1%)
3. XRP – $0.34 (+ 2.3%)

The rise across the crypto market appears to coincide with BitMEX (a crypto trading platform) shutting down for maintenance.

Why did that impact the price? BitMEX allows traders to bet against crypto prices. When trading was halted, anyone betting against bitcoin (with a ‘short position’) had their trades liquidated, which forced the price up.

Biggest winner and loser in the top 20

vechain logo

Biggest winner – Vechain (+ 10%)
Biggest loser – NEM (- 0.83%)

Tomorrow’s ETF decision: what do you need to know?

Despite last night’s jump in prices, the crypto market has been in pause-mode lately. We’re waiting for the SEC (Securities and Exchange Commission) to make a decision on another Bitcoin ETF.

What’s an ETF?

An ETF is an ‘exchange traded fund.’ It tracks the underlying price of a commodity (like gold), an index (like the S&P 500) or a basket of stocks.

ETFs makes it much easier for the average investor to put money into the market.

A bunch of companies are now trying to introduce the first bitcoin ETF. First, the Winklevoss twins had their ETF rejected by the SEC in July.

Then, a second ETF proposal from VanEck and Solid X – which was considered more likely to get approval – was delayed until the end of September.

Price crash

In both cases, the SEC decisions triggered huge losses on the crypto market. A bitcoin ETF is widely seen as a catalyst for “institutional money” to flood into crypto, so a rejection is a set back.

Thursday’s Bitcoin ETF decision

Tomorrow, the SEC will make a decision on the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF. This time the SEC cannot delay or push back the ruling. We’ll see a decision, whether it’s yes or no.

What will happen?

The most likely outcome is another rejection. The SEC continues to push back against bitcoin ETFs, citing volatility and lack of regulation.

It’s also worth noting that the ProShares ETF is based on Bitcoin ‘futures’, whereas the more promising VanEck ETF is based on physical bitcoin.

It’s a small but important distinction. Futures are contracts in which traders agree to buy or sell bitcoin on a certain date. The physical bitcoin ETF is rooted in bitcoin’s live price.

Check back in 2019…

Most experts don’t think we’ll see a bitcoin ETF until 2019, but tomorrow’s decision could still surprise us. A Bitcoin ETF is coming. It’s just a case of when.

We’ll update you with the outcome when we hear more. That’s all for today’s roundup. See you back here tomorrow.

Today’s further reading: SEC Rejects Winklevoss Bitcoin ETF, Here’s Why it Doesn’t Matter.

Before you go… are you a trader or a HODLer?

We’re working to bring you an all-new Block Explorer, and we’d like your help. Please take a few minutes to let us know how you use crypto and how we can make Block Explorer better.

Take our 3-minute survey here.