With a value increase of 35,000% in 2017 and a market capitalization of more than $ 118 billion, Ripple has become a topic of discussion for both 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 solution 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 one hundred billion XRP, and now owns 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 them: unlike Bitcoin, Ripple cannot be mined. The currency is not set as the currency for mining, and its use is recorded in the Ripple network.
Both Bitcoin and Ripple use validation nodes to validate ledgers. Bitcoin has about 10,000 trusted nodes, while Ripple has only five. However, the company plans to add another 11 over the next 18 months. The five validation nodes are controlled by Ripple. XRP has received criticism for the lack of independent trusted validators. 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 the recent rise in price of Ripple
The recent rise in XRP prices has a lot to do with the expected use of currency by financial institutions and the investment of investors who believed in the hype. Ripple has succeeded in attracting banks as customers for its other products. Financial institutions prefer xCurrent from Ripple because it offers real-time connectivity 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 instrument used by banks around the world.
Ripple, or rather, XRP – is a growing cryptocurrency. It differs from the leading digital currency Bitcoin because its supply is controlled by the founding company. Ripple expects banks to accept it in the future. It can be assumed that the recent increase in the value of Ripple will push more debate about its viability as a cryptocurrency asset.