The price of Ripple’s altcoin, XRP, has soared from a modest $0.27 to over $0.69 CoinMarketCap (at the time of this writing) in a matter of approximately 48 hours. Ripple, the company behind this cryptocurrency, has implemented a type of payment network called RippleNet. According to Ripple’s official website, the global payment system is outdated and is not taking advantage of modern-day advances in technology. This is where Ripple steps in.
Ripple payment network promises much more efficient payment methods. Since its launch, the Ripple company has been collaborating with banks in order to develop economical and speedy fund transfers worldwide. Many crypto-enthusiasts have criticized this type of centralization because it goes against the spirit of peer-to-peer, decentralized crypto transactions. Despite these criticisms, it’s hard to deny XRP’s considerable rise in popularity.
One of the plausible reasons behind XRP’s significant price increase could be attributed to a meteoric rise in the activity of cryptocurrencies. On December 10th of this year, CBOE (Chicago Board Options Exchange CBOE) introduced bitcoin futures. This move is a major milestone in establishing bitcoin’s legitimacy. Generally speaking, good news for the bitcoin world is usually good news for most of the other cryptocurrencies and the cryptocurrency market.
At the time of this writing, the market capitalization for all cryptocurrencies has surpassed $500 billion (CoinMarketCap) XRP’s market cap is over $27 billion now. One of the major complaints cited against bitcoin are the extremely slow processing times associated with transactions. With Ripple’s state-of-the-art payment processing algorithm, transaction times are a lot faster. To make it even more appealing, transaction costs might also be lower with RippleNet.
Instead of functioning independently from banks and financial institutions, like most cryptocurrencies do, the Ripple company has chosen to work with them instead. For example, fairly recently, Ripple partnered with American Express to offer better solutions for remittance payments using its blockchain technology.
Another possible increase in XRP’s price could be due to Japan and South Korean banks trying out international payments by utilizing Ripple’s systems. The Bithumb cryptocurrency exchange remains XRP’s biggest trading platform. Bittrex, Poloniex, and Bitfinex are also pretty active. It might seem lucrative to jump on the bandwagon with countless other people and start investing in XRP or any other cryptocurrency. However, the best course of action is to perform thorough research prior to investing.
Most people have a fair understanding of how bitcoin works, but that may not be the case when it comes to Ripple’s XRP. One of the fundamental differences between bitcoin and XRP is that XRP transactions do not depend on a mining protocol. This is because you cannot mine XRP. Another key difference is that centralized institutions such as banks are used to support Ripple’s consensus ledger.
If 2017 was any indication that cryptocurrencies are here to stay, 2018 will definitely serve as a pivotal year in determining the future of XRP and other cryptocurrencies. As more and more industries continue to embrace the revolutionary blockchain technology, XRP and the crypto-world have a promising future ahead of them as they head toward becoming truly mainstream.