Coinmarketcap has the obscure cryptocurrency‘s market cap at over $100 billion at the moment – with each unit being currently worth $2.60. In early December, it was trading at $0.25/unit.
Even with the impressive rice in price, ripple – AKA XRP – is still worth far less than bitcoin. A turbulent end of 2017 shook things for the top dog of the crypto market, which is currently trading at $15,560 with a market cap of over $260 billion.
The main difference with XRP is that it‘s managed by a single company – the San Francisco-based Ripple. Reports indicate that both current and former Ripple execs are becoming the newest cryptocurrency billionaires after its recent explosion in value.
Ripple‘s focus is in facilitating global financial transactions. Its X factor in relation to other digital currencies is that it‘s linked to legitimate banks – such as Santander, Bank of America and UBS.
Japanese and South Korean financial services companies have also began using Ripple technology, which has helped to further drive up the cryptocurrency‘s price.
Investment firm Blockchain Momentum‘s Stephen Powaga highlighted the low transaction fees that ripple and some other cryptocurrencies have – factor that has empowered their position in a sea of alternatives to bitcoin.
Another significant difference between ripple and bitcoin is that the former is not mined – the company has entire control over its availability.
Initially, 100 billion ripple coins were created. Out of those, 38 billion are already in circulation. Ripple management is capped at 1 billion coins released per month – and Powaga believes that number makes the risk of oversaturation a concerning factor.
“It’s somewhat concerning for me because if they chose to release them as quickly as possible, within a little over four years, you’d see more than a doubling of supply of ripple,” he said.
That could put pressure on its price.
“I’m not certain that some of the newer market participants are fully appreciating the potential for inflation,” Powaga said.
International transactions can take hours with bitcoin, and several workdays with traditional financial services. Ripple makes it so that the transactionsare completed within seconds.
Ripple, just like bitcoin, uses blockchain technology. A blockchain is a public ledger containing transaction data from anyone who uses the service. Transactions are added to “blocks,” or the links of code that make up the chain, and each transaction must be recorded on a block.