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Ripple has become a hot topic among analysts and investors, with a 35 000 percent rise in valuation in 2017 and a market cap of over $118 billion. But what exactly is Ripple? Is it similar to other digital currencies? What’s the deal with it being on fire lately? To find out the answers to these questions, keep reading.
- What is Ripple, and how does it work?
Chris Larsen and Jed McCaleb formed Ripple, a payment solutions company. The cryptocurrency XRP is part of their Ripple Transaction Protocol (RTXP). Ripple claims to provide financial institutions with transaction solutions that are quicker, more efficient, and less expensive. The company has produced a total of 100 billion XRPs and currently owns 61 percent of them. A billion coins will be released each month, according to the current plan.
- Ripple vs. Bitcoin: What’s the Difference?
Block-chain technology is used by both Bitcoin and Ripple, which are cryptocurrencies. However, there is a significant difference between the two: Ripple, unlike Bitcoin, cannot be mined. The currency isn’t designed to be mined, and its use is limited to the Ripple network.
Both Bitcoin and Ripple use validating nodes to validate ledgers.
Ripple has just five trusted nodes compared to Bitcoin’s 10,000. However, within the next 18 months, the company expects to add 11 more. Ripple is in charge of the five validating nodes. The lack of independently trusted validators has been a point of contention for XRP. Anyone can download the XRP Ledger and become a validator since it is open source. On the Ripple network, several businesses operate their own nodes.
- The Reasons for Ripple’s Recent Price Increase
The projected use of XRP by financial institutions and investment by believe-the-hype investors have a lot to do with the currency’s recent price hike. For its other goods, Ripple has been competitive in gaining banks as customers. Financial institutions prefer Ripple’s xCurrent because it provides real-time contact and fast corrections, reducing bank transaction delays. The company intends to launch xRapid, a new app that integrates XRP. They see the new product as a way to persuade banks to adopt XRP. Investors believe the currency can be used as a financial instrument by banks all over the world.
Ripple, or XRP as it is known, is a cryptocurrency that is on the rise. It differs from the most common digital currency, Bitcoin, in that its supply is regulated by the company that created it. Ripple is betting that banks will embrace it shortly. It’s possible that the recent rise in Ripple’s value would stoke further arguments about the cryptocurrency’s viability.