A store of value can be described as a commodity or an asset that maintains its value over time – rather than depreciating. An appropriate example of a store of value can be Gold, which people around the world like to keep, be it in the first world or third world country – buy Gold as a store of value to protect their assets against inflation.
Ripple
Ripple or XRP is a digital payment network that is used as a payment settlement and remittance model. It can be used as a commodity to send money internationally through safety protocols.
Ripple has a few advantages over Bitcoin and other cryptocurrencies. It is energy efficient as mining is not required to acquire Ripple. Similarly, Ripple’s transaction speed is no more than a few seconds.
Ripple as a store of value
Many people argue that it can be used as a store of value due to Ripple’s stability. However, cryptocurrencies need to follow some protocols before they can categorize as a store of value.
First, cryptocurrencies need to be decentralized. In Ripple’s case, Ripple is far more decentralized than BTC since anyone can buy Ripple at any given time. Simultaneously, BTC is getting hard to acquire with each passing day due to its price.
Second, a cryptocurrency needs to be capped – Ripple is capped at 100 billion tokens which is fair enough. Finally, a store of value needs to be stable against other currencies in the world. As a cryptocurrency Ripple is far more stable than any cryptocurrency available on the market.
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Value of Ripple
The value of XRP has experienced some inclines but mostly it follows a stable protocol. Ripple can pass on as a store of value among all the cryptocurrencies in the foreseeable future. More so, because the banking industry backs Ripple – they can incorporate Ripple in the barter system and people would want to hold on to Ripple.
Bitcoin as Store of Value
On the contrary, it is argued that Ripple is an excellent commodity to use as a payment method and Bitcoin should be regarded as a store of value digital assets.
However, the volatility of Bitcoin speaks otherwise. A store of value assets needs to be stable in its value – one can never predict where bitcoin will be in the future.
One can say that it is too early to predict which coin will be better served as a store of value as the world is still exploring the realms of cryptocurrency – using platforms like yuan pay group to trade coins and building assets.
The debate of cryptocurrencies turning into the store of value for investors may be a far-fetched thought now. Investors are slowly gravitating towards cryptocurrency, but they are still skeptical about the future of its stability and usage as a store of value.
Conclusion:
Barter systems worldwide gradually evolved into currencies but there have been a few commodities that are passed as stores of value. Assets that have maintained their worth over time.
Gold and the US dollar can be an example but recently there have been some predictions on how Ripple as a cryptocurrency can be better served as a store of value.
While its features can pass as a store of value because of its stable nature. The accurate prediction of where it will be a successful one depends upon the banks – if they back Ripple properly, it can get a pass as a store of value.
But the future is uncertain when it comes to predicting anything about cryptocurrency. As of now, Ripple is used as a transaction model but perhaps in the future if the odds are in its favour – it can pass as a store of value digital asset and serve better as a store of value rather than a transaction model.
