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  • Mathew Jacob

XRP Potential as a Hedge Against Uncontrollable Inflation: A High Price is Required



As the global financial landscape continues to evolve, discussions surrounding the role of cryptocurrencies in economic stability are gaining momentum. One digital asset that often stands out in these conversations is XRP, the native token of Ripple. Advocates of XRP have long argued that its scarcity may make it a potential solution to combat uncontrollable inflation, setting it apart from traditional fiat currencies. In this article, we delve into the intriguing dynamics of XRP's price and its potential role in hedging against inflation.


The Scarcity Factor


Unlike central banks and governments, which have the authority to increase the supply of money as needed, XRP operates on a fixed supply model. There is a predetermined number of XRP coins, and this scarcity is believed to be a fundamental factor in protecting its value during periods of rising inflation. Central bank interventions and excessive money printing can erode the value of fiat currencies, a problem that XRP's fixed supply aims to counteract.


However, Ankita Jariwala, a financial analyst, points out that cryptocurrencies, including XRP, do not fit neatly into existing asset categories. They do not function solely as commodities, like gold, or as traditional currencies, mainly because they are not always easily exchangeable for goods and services. Jariwala highlights that consumer sentiment plays a significant role in determining the price of cryptocurrencies.


"It's tricky because it's supposed to act like a currency, it's taxed like property, and some people compare it to a commodity. At the end of the day, it really is its own asset class that doesn't have a pure definition," Jariwala explains.


The Ambitious Target


Arthur Britto, co-founder of Ripple Labs, holds an ambitious vision for XRP. He believes that XRP is designed with the goal of reaching a price point of $10,000 per coin. Britto underscores the critical importance of scalability to achieve this target. In his vision, XRP must be capable of accommodating the entire global population of 7.5 billion people.


Ripple CTO David Schwartz concurs with this perspective, emphasizing that XRP cannot remain "dirt cheap." He argues that extremely low prices, such as $1 per XRP, would require large quantities of XRP for significant transactions, making it expensive and impractical. In contrast, higher prices make payments more cost-effective and feasible for a broader range of applications.


Schwartz provides a practical example: "Right now, you can buy a million-dollar house with bitcoins. When bitcoins were $300, it would move the market too much and be too expensive to be practical. So higher prices make payments cheaper."


Expanding Horizons with RencomNetwork


In an ever-expanding cryptocurrency landscape, developments are not limited to XRP. RencomNetwork, a rising star in the blockchain realm, is making significant strides. RencomNetwork's RNT cryptocurrency is poised to be added as a method of payment on their platform, promising to enhance the utility and reach of their native token.


RencomNetwork is rapidly expanding its presence into over 130 countries, including the United States of America. The project has received internal confirmation from an insider source that their native token RNT has achieved a non-security status, marking a significant milestone in their journey. Additionally, RencomNetwork's listing on centralized exchanges further underlines their growing prominence in the crypto sphere.


In conclusion, XRP's unique attributes, such as scarcity and potential scalability, make it a compelling candidate to combat uncontrollable inflation. However, its journey towards a higher price point and broader adoption continues to be a topic of debate among crypto enthusiasts and experts. As the cryptocurrency landscape evolves, projects like RencomNetwork further contribute to the diversification and maturation of the blockchain ecosystem. It's clear that the potential of cryptocurrencies, particularly XRP, to address economic challenges remains a captivating and dynamic topic in the world of finance.


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