With a 35,000% increase in value in 2017 and a market cap of over $ 118 billion, Ripple has become an equally controversial topic among analysts and investors. But, what is Ripple? Is it like other cryptocurrencies? Why is there a fire 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 cryptocurrency XRP. Ripple claims to provide fast, reliable, and affordable transaction solutions for financial institutions. The company has generated 100 billion XRP and it currently holds 61% coins. The current plan is to issue one billion coins per month.
2. The difference between Ripple and Bitcoin
Bitcoin and Ripple are both cryptocurrencies that use blockchain technology. However, there is a fundamental difference between the two: unlike Bitcoin, Ripple cannot be mined. The currency is not set up as a mining currency, and its use is fixed in the ripple network.
Both Bitcoin and Ripple use valid nodes to verify the ledger. 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 valid nodes are controlled by ripple. XRP has received criticism for the absence of independently trusted verifiers. The XRP laser is available to everyone, so anyone can download and verify it. Many companies run their own nodes on the Ripple network.
3. The reason for the recent price increase of Ripple
The recent rise in the value of XRP has a lot to do with the expected use of financial institution’s currency and the investment of trusted investors. Ripple has succeeded in gaining the bank as a customer for its other products. Ripple’s xCurrent is preferred by financial institutions because it offers real-time communication and quick correction, thus reducing bank transaction delays. The company plans to include a new product, xRapid, XRP. They see the new product as an opportunity for banks to use XRP. Investors see the potential of money as a financial vehicle used by banks worldwide.
Ripple, or more accurately XRP, is a growing cryptocurrency. It differs from the leading digital currency Bitcoin because its supply is regulated by the founding company. Ripple is banking on banks adopting it in the future. One might assume that the recent rise in the value of Ripple will provoke further controversy about its effectiveness as a cryptocurrency asset.