Watch out Bitcoin….There’s a new kid on the block
For the first time since 2015, Bitcoin began the new year by trading at $13,400 on January 1, sliding from $19,511 reached on December 18 after the Chicago Board of Options Exchange and CME Group launched futures trading on the cryptocurrency.
While Bitcoin is off to a bad start in the new year, there is a new contender that’s making a splash in the race to catch Bitcoin.
As of January 1, 2018, Ripple now has the second largest market cap of all cryptocurrencies due to its 53% surge on December 29, 2017. Coinmarketcap.com shows its market capitalization at $88 billion, as compared with $84 billion for Ethereum and $228 billion for Bitcoin.
What is Ripple (XRP)?
First released in 2013, Ripple (XRP), is one of the largest cryptocurrencies by market capitalization, claiming to offer frictionless experience to its customers to send money globally using the power of blockchain. By joining Ripple, financial institutions can process their customers’ payments anywhere in the world instantly.
Why is it gaining its popularity?
One reason for the popularity of Ripple is its utility. Cryptocurrency consultant Koji Higashi said of Ripple: “It’s just a bridge currency for international payment. But it’s not really a currency.” One writer described it as “Western Union using blockchain technology”.
Ripple, being a blockchain, does by definition have a token – the XRP. The system contains 100 billion pre-mined XRP tokens which are used to pay transaction fees (if transactions were fee-less, the system could be easily overloaded by hackers). The tokens used as a transaction fee are destroyed. Because the network doesn’t rely on the mining process used by Bitcoin, it eliminates the issues of mining monopolies and slow transactions.
Future of Ripple
With its ability to process 1500 transactions per second, compared to 7 transactions per second for Bitcoin, it is expected to act as a liquidity solution for the cross-border transactions for banks and payment providers to settle multi-currency transactions at reduced costs allowing instant transfers. With a promising financial technology of future, growing network of banks and as more investors are becoming aware of its technology, Ripple is expected to gain more popularity in the world of cryptocurrencies.
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