With a 35,000% increase in value in 2017 and a market capitalization in excess of $ 118 billion, Ripple has become a hotly debated topic for both analysts and investors. But what is Ripple? Is it like other cryptocurrencies? Why has it been burned lately? Keep reading for answers to these questions.
1. What is Ripple?
Ripple is a payment solutions company, founded by Chris Larsen and Jed McCaleb. Its Ripple Transaction Protocol (RTXP) contains the XRP digital currency. Ripple claims to offer faster, more reliable and affordable transaction solutions for financial institutions. The company has created one hundred billion XRP and currently owns 61% of the coins. The current plan is to release 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 taken advantage of. The currency is not configured as shabby currency and its use is fixed in the Ripple network.
Both Bitcoin and Ripple use validation nodes to validate ledgers. Bitcoin has about 10,000 trusted nodes, while Ripple only has five. However, the company expects to add 11 more over the next 18 months. Ripple controls all five validation nodes. XRP has received criticism for the absence of independent trust validators. The XRP Ledger is available to everyone, so anyone can download it and become a validator. Many companies manage their own nodes in the Ripple network.
3. Reasons for Ripple’s recent price hike
The recent rise in XRP prices has a lot to do with the expected use of the currency by financial institutions and the investment of credible investors. Ripple has been successful in winning banks as customers of its other products. Financial institutions prefer Ripple’s xCurrent because it offers real-time communications and quick fixes, thus reducing delays in banking transactions. The company plans to introduce a new product, xRapid, which incorporates XRP. They see the new product as an opportunity to get banks to use XRP. Investors see the potential of the currency as a financial vehicle used by banks around the world.
Ripple, or more accurately, XRP, is a rising cryptocurrency. It is different from the leading digital currency Bitcoin because its supply is controlled by the founding company. Ripple is banking on the banks that will adopt it in the future. It can be speculated that the recent rise in Ripple’s value will fuel further debates about its viability as a cryptocurrency asset.