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Forex News: The Rise Of Ripple

The Rise Of Ripple

01/05/2018 - 08:58:00 (RTTNews)

(RTTNews) - Riding on the mania that is causing mammoth gains in the price of different digital currencies, Ripple and its native currency XRP has risen to be the second biggest crypto asset by market capitalization.

The XRP coin or Ripple that is based on the Ripple protocol surged dramatically in 2017, according to Coinmarketcap data, eclipsing Bitcoin's jump of over 1,300 percent.

Ripple's market capitalization, based on coins in circulation, was over $129 billion on January 5, having risen from just under $90 billion at the start of the year. In the final week of 2017, XRP surpassed Ethereum in market cap to become the largest crypto asset, second only to Bitcoin with $275 billion.

But Ripple's market capitalization would exceed that of Bitcoin's if the $55 billion coins in escrow are considered. That would bring Ripple market cap to $334 billion versus $275 billion for Bitcoin.

Another milestone Ripple achieved at the start of 2018 was to cross $3 level on January 3. The digital currency hit a record high of $3.84 on the next day.

However, the price of Ripple fell nearly 20 percent after the crypto exchange Coinbase announced that it was not adding any new digital currencies to its list for now. The exchange currently trades Bitcoin, Bitcoin Cash, Ethereum and Litecoin.

This week's surge of nearly 150 percent in Ripple made one of its founders and now chairman, Chris Larsen, the fifth richest man in the world as the value of his coin stash grew to about $55 billion, a prominent cryptocurrency investor and ex-hedge fund manger Michael Novogratz tweeted on January 4.

He was briefly tied with Facebook CEO Mark Zuckerberg in the fifth place on the list of the world's richest.

Larsen has 5.19 billion XRP in his personal holdings and a 17 percent stake in the company, giving him a net worth of $37.3 billion based on January 1 exchange rate, Forbes reported.

The San Francisco-based Ripple was founded in 2012 as provider for a real-time payment processing system that is based on a blockchain or a public distributed ledger which validates transactions on consensus.

Jed McCaleb, who founded Mt. Gox bitcoin exchange that failed in 2014 after a major hack, was one of the co-founders of Ripple. He left the company in 2013 and founded another open source protocol Stellar in 2014.

Though both Ripple and Bitcoin are commonly referred to as cryptocurrencies, there are differences between them.

While Bitcoin is a digital currency based on the blockchain, Ripple is a real-time payment settlement network with a virtual currency that works on an enterprise blockchain that claims to have more than 100 customers across the globe, including American Express and UBS.

The Ripple website also claims that XRP is the fastest, most scalable digital asset that handles 1,500 transactions per second versus Bitcoin's seven transactions per second.

Further, XRP does not aim to replace existing legal tender unlike Bitcoin. Instead, it works along with fiat currencies to enable faster and more efficient payments. The currency also supports faster cross-border payments.

Unlike Bitcoin, Ripple is not created using proof-of-work or mining in datacenters using massive amounts of electricity. Instead, each XRP pre-exists in the network and hence are able to reach network consensus faster. The total supply of XRP coins is just under 100 billion that were created at inception.

A major criticism leveled against Ripple is that it is not decentralized entirely as the validators in the distributed network are known entities such as banks and financial services companies, unlike Bitcoin's blockchain that relies on anonymous miners. This has prompted some players in the crypto space to name XRP the "banksters' coin".

Going by the recent surge in several cryptocurrencies, Ripple's price is likely to rise further.

As of 5.00 am ET on January 5, Ripple was trading at $3.34 and Bitcoin at $16,371.80, according to Coinmarketcap.

For comments and feedback: contact editorial@rttnews.com

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