By Jack Anderson
on 2018-01-02 00:00:00 ET
It is January 2nd, 2018. Financially, December was quite the month, to say the least. On one side, Bitcoin and cryptocurrencies grew exponentially, on the other, US President Donald Trump announced one of the biggest tax cuts in America's history.
In the beginning of this new year, a prediction needs to be made. Where will the cryptocurrency market be, not only at year end, but in ten years from now? No one can know for certain. Many are calling cryptocurrencies the biggest bubble since the subprime bubble of 2008, which took place ten years ago.
The market capitalization of cryptocurrencies is currently at 653 billion dollars (USD) and growing. There are currently 36 cryptocurrencies valued at more than a billion dollars.
Here is the list of the top 10, including current value per token:
1. Bitcoin ($14,073)
2. Ripple ($2.42)
3. Ethereum ($887)
4. Bitcoin Cash ($2,642)
5. Cardano ($0.77)
6. Litecoin ($262)
7. IOTA ($4.2)
8. Stellar ($0.56)
9. NEM ($1.12)
10. Dash ($1,152)
One thing is guaranteed, this list of top 10 cryptocurrencies will change. We won't need to wait until December 31st to see it. But it will be interesting to see the effect of time on these volatile values. Because the crypto market is extremely volatile. The values are increasing rapidly and going down as fast. Some are betting on the name, on the icon or simply on price. Valuation of these assets is as virtual as the assets themselves.
IS BITCOIN A CURRENCY OR A COMMODITY?
The aim of Bitcoin was (or still is for some) to be a virtual currency. Simply put, you could pay for a pizza with some Bitcoins. Some even went further and said that the world didn't need banks anymore.
But then, the price of one single Bitcoin exploded. One single Bitcoin went from a few penny to $20,000. Who in their rightful mind would even be interested to keep their savings in a currency that fluctuates so much? Because if it can go high, it can go down ? and much faster.
This leads to the following question: is Bitcoin a currency or a commodity? As of today at least, Bitcoin is looking much more like a commodity. Bitcoin is virtual gold. But while gold will always be gold, Bitcoin's valuation is based solely on its name. And of course, competition is around the corner. Some other currencies such as Ethereum or Litecoin took major market share from Bitcoin in a very short amount of time.
THE RIPPLE EFFECT
But out of all of those cryptocurrencies, there is one asset that is completely different from the others. Its name is XRP, created by the company Ripple. Ripple is actually a company that aims to solve one particular problem. To send $10,000 from New York to London, the fastest way is to drive to JFK, take a flight and physically go to London with a briefcase of money. This alone seems anachronic. Ripple has a solution for that. They bring their cryptocurrency (XRP) in the middle of what we call the standard fiat currencies (US Dollar, Euro, etc.). The value is converted to Ripple and then automatically converted to the recipient's currency. This transaction takes less than four seconds.
This alone is a revolution in the world of finance.
THE FUTURE AIN'T WHAT IT USED TO BE
So, while the public and most of the media are focused solely on Bitcoin, there could be a massive opportunity for Ripple's solution and their XRP token. The price could skyrocket and make Ripple one of the only real cryptocurrencies, while the others see their price crashing in the following months or years.
Now that the Blockchain technology is available, it is time for real life test cases. One prediction could be that Bitcoin will become a virtual gold, while some other coins like XRP could have concrete purposes.
But only time will tell.