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What Investors Need to Know About Ripple, Bitcoin's Cryptocurrency Rival
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There’s a cryptocurrency on the market that is making huge waves right now, thanks to the booming popularity of the likes of bitcoin, Ethereum, and litecoin.
Launched in 2012, ripple (XRP) is a pretty obscure cryptocurrency compared to its peers, but it’s valuation has soared in recent weeks. It’s currently worth about $3.30, with a market cap of more than $100 billion, according to Coinmarketcap; compare that to the $0.25 it was trading at just a few weeks ago in early December.
It’s still worth considerably less than bitcoin, however, which is currently trading around $15,000, and has a market cap of over $250 billion.
Ripple differs from bitcoin in a few ways. Instead of being created, or mined, by users, ripple’s supply is controlled by one company, San Francisco-based Ripple. The firm initially created 100 billion ripple coins—38 billion are in circulation at the moment—and the company has the ability to release up to one billion coins per month.
Interestingly, ripple was actually launched in order to help simplify global financial transactions, and is connected to legitimate banks; Bank of America (BAC - Free Report) , UBS (UBS - Free Report) , and Santander SANPRA all utilize the Ripple platform. And, some financial services companies in Japan and South Korea have recently begun using Ripple’s technology, which has helped the cryptocurrency’s price jump.
Ripple is believed to offer both better security and better prices over other digital currencies, and allows users to send, receive, and hold any currency in a decentralized way via RippleNet, Ripple’s payment network. According to the company, cross-border payments can go through in a matter of seconds compared to hours using bitcoin or days with other traditional financial transactions.
Ripple CEO Brad Garlinghouse spoke to Fortune last year about ripple’s liquidity appeal, saying “The liquidity needs of banks today is managed with literally ten trillion of float that sits in these nostro and vostro accounts. We believe very strong this is an inefficient model. You can use digital assets to fund liquidity, and Ripple is uniquely positioned to capitalize on that. Bitcoin takes four hours to settle a transaction. XRP takes 3.6 seconds.”
But like bitcoin, ripple does use blockchain, which is like a public transaction ledge. Updated by all network users, blockchain is vital for cryptocurrencies. Blocks are produced through code by employing users’ computer power, and are then added to the blockchain. Bitcoin, for instance, is created through the generation of blocks on this network, and blockchain ensures that a unit of bitcoin is not spent more than once.
The past few months saw investor and analyst interest in ripple surge, no doubt aiding its huge price gain. The company Ripple licensed its own blockchain technology to more than 100 banks as of last October, while credit card giant American Express (AXP - Free Report) recently introduced instant blockchain-based payments using the firm’s network.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
What Investors Need to Know About Ripple, Bitcoin's Cryptocurrency Rival
There’s a cryptocurrency on the market that is making huge waves right now, thanks to the booming popularity of the likes of bitcoin, Ethereum, and litecoin.
Launched in 2012, ripple (XRP) is a pretty obscure cryptocurrency compared to its peers, but it’s valuation has soared in recent weeks. It’s currently worth about $3.30, with a market cap of more than $100 billion, according to Coinmarketcap; compare that to the $0.25 it was trading at just a few weeks ago in early December.
It’s still worth considerably less than bitcoin, however, which is currently trading around $15,000, and has a market cap of over $250 billion.
Ripple differs from bitcoin in a few ways. Instead of being created, or mined, by users, ripple’s supply is controlled by one company, San Francisco-based Ripple. The firm initially created 100 billion ripple coins—38 billion are in circulation at the moment—and the company has the ability to release up to one billion coins per month.
Interestingly, ripple was actually launched in order to help simplify global financial transactions, and is connected to legitimate banks; Bank of America (BAC - Free Report) , UBS (UBS - Free Report) , and Santander SANPRA all utilize the Ripple platform. And, some financial services companies in Japan and South Korea have recently begun using Ripple’s technology, which has helped the cryptocurrency’s price jump.
Ripple is believed to offer both better security and better prices over other digital currencies, and allows users to send, receive, and hold any currency in a decentralized way via RippleNet, Ripple’s payment network. According to the company, cross-border payments can go through in a matter of seconds compared to hours using bitcoin or days with other traditional financial transactions.
Ripple CEO Brad Garlinghouse spoke to Fortune last year about ripple’s liquidity appeal, saying “The liquidity needs of banks today is managed with literally ten trillion of float that sits in these nostro and vostro accounts. We believe very strong this is an inefficient model. You can use digital assets to fund liquidity, and Ripple is uniquely positioned to capitalize on that. Bitcoin takes four hours to settle a transaction. XRP takes 3.6 seconds.”
But like bitcoin, ripple does use blockchain, which is like a public transaction ledge. Updated by all network users, blockchain is vital for cryptocurrencies. Blocks are produced through code by employing users’ computer power, and are then added to the blockchain. Bitcoin, for instance, is created through the generation of blocks on this network, and blockchain ensures that a unit of bitcoin is not spent more than once.
The past few months saw investor and analyst interest in ripple surge, no doubt aiding its huge price gain. The company Ripple licensed its own blockchain technology to more than 100 banks as of last October, while credit card giant American Express (AXP - Free Report) recently introduced instant blockchain-based payments using the firm’s network.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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