David Schwartz, the Chief Technology Officer (CTO) of Ripple, has reaffirmed his position on the pricing of XRP and its role in the world of payments. In response to an investor’s inquiry about the lackluster performance of XRP’s price since 2017, Schwartz discussed how XRP has not yet reached its full potential in payment systems, despite its wide availability and favorable features.
Schwartz has consistently argued that for XRP to effectively serve as a medium for high-value payments, it cannot remain cheap. He emphasized that regardless of whether XRP is trading at $1 or $1 million, the cost of a $1 million transaction would still be the same. However, he pointed out that higher prices would make payments more affordable.
A higher-priced XRP would minimize the impact of transactions on the market, making them more efficient and practical for large transfers. This quality was harder to achieve when XRP was trading for just a few cents.
Back in November 2017, when this discussion took place, XRP’s price ranged between $0.17 and $0.28. Fast forward to 2024, and although the cryptocurrency has experienced significant volatility, it is currently trading at around $0.54. This modest 92% increase pales in comparison to Bitcoin, which has surged by over 500% during the same period.
Naturally, this has led to frustration among some investors, with one sarcastically commenting that XRP is still “dirt cheap” despite Schwartz’s previous statements. In response, Schwartz reiterated his original argument, stating that the cost of using XRP for payments scales proportionally with its price. Therefore, whether XRP trades for $1 or higher, the end result in large-scale transactions remains the same. Higher prices simply make payments less disruptive to the market.
While XRP is widely available and holds a top-five position by market cap, it has not yet gained widespread usage for payments, as pointed out by an XRP community member. However, Schwartz stood firm, highlighting the advantages of XRP for payments, including low transaction fees, rapid confirmation times, and its position in the market. He acknowledged that the slow adoption of XRP for payments is not unique to the cryptocurrency but is a trend across the industry.
Although Schwartz did not mention the specific reasons behind this slow adoption, it is believed that integrating digital currencies into traditional financial systems and regulatory hurdles are some of the complexities involved.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. The opinions expressed in this article are solely those of the author and do not reflect the views of The Crypto Basic. Readers are advised to conduct their own research before making any investment decisions, and The Crypto Basic is not responsible for any financial losses incurred.