I hear you funkywizard. Isn't it sad that we have to resort to using ripple for cheap inter-exchange transfers when that's supposed to be one of the functions of nearly all the cryptos? If/when multiple exchanges support Segwit and/or lightning then I can see your use case for ripple diminishing. Until then, your reasoning make sense. I'd still caution people who think it's going to be a currency worth hodl'ing long term.
Yeah, I don't intend to hold ripple, just saying that this pay-to-play aspect and lack of possible mining is likely responsible for a good portion of the price increase. Or at least, that initial demand provides a trigger that the momentum traders see and get excited about.
The combination of high liquidity and low transfer prices makes it a compelling medium of exchange, so I do appreciate it for that purpose. As there is no "mining" of ripple, my understanding is that there is no artificial "difficulty barrier" for transactions. I've heard that transfer pricing in bitcoin has stayed pretty stable in bitcoins, but as bitcoin has appreciated far more than people expected, the real dollar transaction fees appreciated along with it.
I really think that the ransomware attacks last year is what got this frenzy started. People who had never heard of it before needed to buy it to get their data back, spiking demand. Ransomware meanwhile was big news, which in turn crypto was big news.
The total dollar value of ransom payments was supposedly fairly modest. Even so, the spike in knowledge of crypto, spike in attention given to crypto, and the initial price spike from this new use-case for bitcoin, I think was the initial trigger. Once there was awareness, combined with a perception that this was going to the moon, increased prices were enough to cause speculative demand, and therefore prices, to rise further.
Therefore, a "real" (but relatively minor) event prompted the runup. Similarly, I expect that a similarly "real but minor" event will be the trigger for collapse once the inflows are tapped out.