Ripple the company is unique in the sense that it doesn’t make money from selling its product. It makes money by selling its stash of XRP coins to naive “investors” (let’s call them “XRP bagholders” for more clarity).
Ripple is very transparent about this – they even issue regular reports like this one
ripple.com
In 2018 alone, Ripple has made over $500 million selling XRP coins.
XRP bagholders buy XRP coins because they believe that XRP coins are worth much, much more than what they’re selling for right now. The reason for that belief is that Ripple goes to great lengths to communicate on how its technology will change the world, and how it will be used by every financial institution for transfers and settlements – which is the core of banking.
The main argument for why XRP coins are worth something, is that Ripple’s technology will supposedly render obsolete the nostro/vostro account system, which supposedly requires $5 trillion to be frozen today. Because this pile of cash will be freed up, the reasoning goes, it will be somehow replaced by XRP coins, thus somehow giving XRP coins an equivalent market value of $5 trillion, or $50 per coin. This is all explained on Ripple’s own website.
Currently, XRP coins trade at around 30 cents, so the nostro/vostro argument induces hopes of 15,000% returns for XRP bagholders. Other Ripple-friendly sources have gone to great lengths to inflate this potential valuation, suggesting that one XRP coin could be even worth over $500.
