With a value increase of 35,000% in 2017 and a market capitalization of over $ 118 billion, Ripple has become a topic of much debate among analysts and investors. But what is Ripple? Is it like other cryptocurrencies? Why has it been burning lately? Keep reading to get answers to these questions.
1. What is Ripple?
Ripple is a payment solutions company founded by Chris Larsen and Jed McCaleb. Their Ripple Transaction Protocol (RTXP) contains the cryptocurrency XRP. Ripple claims to offer faster, more reliable and affordable transaction solutions for financial institutions. The company has created 100 billion XRPs and currently holds 61% of the coins. The current plan is to issue a billion coins a month.
2. Differences between Ripple and Bitcoin
Both Bitcoin and Ripple are cryptocurrencies that use blockchain technology. But there is a fundamental difference between the two: unlike Bitcoin, Ripple cannot be mined. The currency is not set as a minable currency, and its use is fixed on the Ripple network.
Both Bitcoin and Ripple use validation nodes to validate books. Bitcoin has about 10,000 trusted nodes, while Ripple has only five. However, the company plans to add 11 more in the next 18 months. Five validation nodes are controlled by Ripple. XRP has been criticized for the lack of independent trusted validators. XRP Ledger is available to everyone, so anyone can download it and become a validator. Many companies run their own nodes on the Ripple network.
3. Reasons for the recent increase in Ripple prices
The recent increase in the price of XRP has a lot to do with the expected use of currency by financial institutions and the investment of issuing investors. Ripple has been successful in gaining banks as customers for its other products. Ripple’s xCurrent is preferred by financial institutions because it offers real-time communication and quick fixes, thus reducing delays in banking transactions. The company plans to introduce a new product, xRapid, which includes XRP. They see the new product as an opportunity to get banks to use XRP. Investors see the potential of currency as a financial asset used by banks around the world.
Ripple, more precisely XRP, is a rising cryptocurrency. It differs from the leading digital currency Bitcoin because its supply is controlled by the founding company. Ripple is counting on the banks to adopt it in the future. It can be speculated that the recent increase in the value of Ripple will spur more debate about its viability as a cryptocurrency.