Once XRP crosses a threshold for adoption in payments, growth will accelerate rapidly.
Why? Due to the Virtuous Cycle Flywheel Phenomenon.
XRP is a utility asset which means it can function in two specific roles.
It can serve as a currency to enable transfers of value (payments) and it can serve as a store of value.
XRP adoption within the banking sector was held back for reasons every XRP holder knows well.
However, the day will come when the shackles are released and the asset is free to serve in its intended purpose.
Initially, that will be as a payments currency within the banking sector.
As adoption grows, it will become clear to other industries that using blockchain assets for payments is more efficient than the current system.
Consequently, new use cases will emerge to leverage the cost & time savings in digital asset payments. This is known as Jevons paradox.
As more and more new uses emerge, and the utility of XRP gains momentum, the price will increase.
Consequently, market participants will see the rising price as a signal that XRP is a good store of value.
Gotta store your wealth somewhere.
Why not in a growing asset that is steadily increasing in price?
When more people and institutions increase their holding of XRP (storing wealth in the asset), they will remove it from the circulating supply available for transactions.
This become a repeating flywheel that builds upon itself via the compound effect, and is known as the Virtuous Cycle.
As the flywheel goes around and around, it picks up momentum and accelerates.
Similar to how Moore’s law explains that continuously decreasing costs in technology will increase adoption exponentially.
In other words, growth does not happen at a steady rate. It accelerates, gaining speed though each phase of the cycle.
At some point, the adoption will approach the Singularity. This futuristic concept describes how advanced AI technology that will eventually surpass human intelligence.
Concerns about Skynet aside, the cool applications for Singularity are limitless. XRP adoption fits into that model of the future.
A future point exists where the adoption of the asset will replace labor intensive industries, archaic systems and even some advanced human decision making.
The value of XRP will follow this trajectory as the need for transactions and store of value work as competing market forces. The Virtuous Cycle that repeats over and over.