Digital currency, Ripple, is sweeping the world, just like Ethereum and Bitcoin before that.
What is Ripple?
This, from the ever-reliable Wikipedia, an open-source platform anyone can contribute to:
"Ripple is a real-time gross settlement system (RTGS), currency exchange and remittance network by Ripple. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol, it is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples)." – author unknown.
Ripple is the third-largest cryptocurrency by market capitalisation (source unknown). But, CoinDesk says that Ethereum is worth $23.2 billion in total! The Bitcoin market is around $41 billion.
"Riiiight" – Dr Evil
I first came across Ripple from a family member. The same family member who pointed me to Ethereum a little while ago.
The family member booked a healthy profit of 30% on Ethereum and used the profit to buy some Ripple. Seriously, I'm not making this stuff up…
In the last week, Ethereum is down from $375 to $250.
Timing sublime on my family member's behalf.
BitCoin, which is priced a bit under $2,500 is down from $2,800 last week.
What now?
The world is filled with people who know the price of everything but the value of nothing.
Ordinarily, as a finance guy, I could offer some insight into the value of an investment. However, in the realm of speculation, you are not valuing something so much as you are speculating on the perception of value.
For example, a property earns cash in the form of rent. Even if you require a buyer to perceive it to be worth more when you go to sell it, it will still earn rent.
Shares in National Australia Bank Ltd. (ASX: NAB) should pay a dividend this year and next. We can value it because the returns are tangible and somewhat predictable.
But how do you value digital currencies that few people (globally) truly understand?
For most people, the only way to make money will be to play the greater fool theory and speculate on changing prices.
It may be possible, but I'd rather get rich the other way.
