Blockchain technology has taken the world by storm, and Ripple has just invested $25 million into this growing industry, according to CNBC. The company’s investment takes into account an old adage: To grow your business, you must invest in your business. Ripple is the startup behind XRP coin technology and is the third largest cryptocurrency platform behind Bitcoin and Ethereum. Despite cryptocurrency hitting some bumps throughout 2017, the platform shows no sign of slowing down.
A Wise Investment
XRP coin is what spearheads blockchain technology, and there are venture capitalist investment firms that specialize in this niche. Ripple is leading that pack by making a $25 million investment into its own $150 million blockchain fund. The fund is appropriately dubbed Blockchain Capital, and its focus will be to provide venture capital investing toward blockchain technology. The technology is desperately needed in this volatile industry. The volatility felt in 2017 hasn’t slowed down in 2018, and Ripple is looking toward startups to boost the security and technology behind blockchain ledgers.
Bitcoin is a classic example of a company that has taken blockchain technology and run with it. The platform began its global ledger platform on Jan. 3, 2009, and has grown to be the number blockchain platform used throughout the world. People rely on the Bitcoin payment system for their global transactions. In fact, according to Wikipedia, Bitcoin is the “first decentralized digital currency.” Rather than go through a bank platform, people send and receive digital monies directly via Bitcoin throughout the world. Transactions are recorded on a public ledger, or the blockchain, and no bank serves as an intermediary, which in turn streamlines the financial processes.
CNBC reports that Ripple owns “60 billion of the 100 billion ripple.” Ripple is also known as XRP coin and these are the tokens created to take the place of actual currency. Because more and more people are beginning to take advantage of cryptocurrency technology, and more and more investors are adding companies in this niche to their portfolios, the networks are growing at a continual rate despite their volatility. This is why Ripple felt that a venture capital investment into growing the technology was wise at this time, and few investors would likely argue with the company.
Examples of Success
One successful venture capitalist, Chris Sacca, proves that striking when the iron is hot pays back in spades. Sacca invested in Instagram, Twitter, and Uber, and everyone knows how big those companies are now. Sacca’s investments in these companies gave them the operating capital they needed to grow into the mega corporations they are today, and Chris Sacca’s wife no doubt had a hand in his success with her advertising savvy. Venture capitalists help business owners realize their visions of success, and nobody can argue the successful growth of the three companies listed above.
Ripple wants to create those entrepreneurial inroads for companies interested in turning blockchain technology into the next Instagram or Twitter. Not literally, but figuratively speaking of course. The blockchain space has room to grow and improve, especially in ways that will iron out its volatility and encourage future investment on the global markets. New blockchain and crypto companies are this niche’s future, and the investment into venture capital is one of the niche’s primary financing tools alongside angel investors.
With the success of venture capital financing in the technology sector, it makes sense that a cryptocurrency company would make this move. The funds will not be limited to blockchain businesses, according to Ripple CEO Brad Garlinghouse. The company is also interested in providing this venture capital to startup businesses interested in using cryptocurrency within their operating models. This is the perfect way to grow the blockchain industry and stabilize the cryptocurrency market.
Of course, the company will want the businesses to use its cryptocurrency, which makes perfect sense. Venture capital investments don’t pay off if they benefit your competitors, and Ripple has also struck up partnerships with financial firms to ensure fast and seamless cryptocurrency transactions. The company is also working with MoneyGram and Western Union in its efforts to boost its XRP coins above Bitcoin and Ethereum. Adding digital assets to bank, financial institution, and money sharing portfolios will attract customers and users, which benefits Ripple’s partners, too.
This will also attract the businesses in which Blockchain Capital will likely invest. Many believe that cryptocurrency is the wave of the future, and it will become the money of choice for businesses throughout the world. Investing in this medium to grow it to the economic heights to which it’s capable is a risky prospect, but one that many would argue is worth that risk. Ripple has a vested interested in taking that risk, and if it plays its cards right, the $25 million it just put into Blockchain Capital will pay off splendidly for the company.
Venture capital is not limited to technology investment, although it tends to lean in that direction. Blockchain Capital is quickly gathering the funds it needs to take cryptocurrency to the next level, and Ripple is leading the investment pack.