With a 35,000% increase in value in 2017 and a market capitalization of more than $ 118 billion, Ripple has become a very controversial subject among analysts and investors. But, what is Ripple? Is it like other cryptocurrencies? Why did it catch fire recently? Read on for 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 XRP cryptocurrency. Ripple claims to offer faster, more reliable and affordable transaction solutions to financial institutions. The company has created one hundred billion XRPs and currently owns 61% of the parts. The current plan is to release one billion pieces per month.
2. Differences between Ripple and Bitcoin
Bitcoin and Ripple are cryptocurrencies that use blockchain technology. But, there is a fundamental difference between the two: unlike Bitcoin, Ripple cannot be exploited. The currency is not configured as an exploitable currency and its use is fixed to the Ripple network.
Bitcoin and Ripple use validation nodes to validate the registers. Bitcoin has around 10,000 trusted nodes, while Ripple has only five. However, the company plans to add 11 more over the next 18 months. The five validation nodes are checked by Ripple. XRP has been criticized for its lack of independent trusted validators. The XRP Ledger is accessible to everyone, so anyone can download it and become a validator. Many companies manage their own nodes on the Ripple network.
3. Reasons for the recent Ripple price hike
The recent price hike in XRP has a lot to do with the expected use of the currency by financial institutions and investment by investors who believe in the hype. Ripple has managed to gain banks as customers for its other products. Ripple's xCurrent is preferred by financial institutions because it offers real-time communication and quick fixes, reducing delays in banking transactions. The company plans to introduce a new product, xRapid, which integrates 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 precisely, XRP, is a rising cryptocurrency. It differs from the main Bitcoin digital currency in that its supply is controlled by the founding company. Ripple is banking on adoption by banks in the future. Presumably, the recent increase in the value of Ripple will fuel further debate over its viability as a cryptocurrency asset.