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With the increasing hype on cryptocurrencies like the Bitcoin and other alternative currencies, a cryptocurrency revolution is irrefutably imminent. As this situation unfolds, a lot of confusion still exists about some of the cryptocurrencies, more precisely the Ripple cryptocurrency (XRP). Since this digital currency is different from other cryptocurrencies, it is often a target of speculation and misunderstanding. To set the record straight, herein is an insightful breakdown of XRP.
What is Ripple?
The term Ripple doubles up as a digital payment network (RippleNet) for financial transactions and a cryptocurrency by the name XRP. Built on a peer to peer decentralized and open source platform, RippleNet connects payment providers, digital asset exchanges, financial institutions, and banks in a bid to interchange money across the globe seamlessly. It helps in minimizing the money and time consumed in cross-border payments.
When, How and Who Created it?
Although Ripple ’s inception came in 2012, its concept was conceived by Ryan Fugger back in 2004. Then, the mission was to build a monetary system that was decentralized and could also empower both communities and individuals to make their own money. Ryan Fugger created the first iteration of the desired financial system called RipplePay.com. His efforts caught the attention of Jeb McCaleb, who had started the creation of a digital currency system whereby verification of transactions passed through a consensus amongst network members.
Chris Larsen joined Jed in 2012 and together they pitched their idea to Fugger, leading to the birth of OpenCoin. The company is known for building the Ripple payment and exchange network as well as the Ripple protocol (RTXP). In 2013, OpenCoin changed its name to Ripple Labs, Inc. before rebranding again in 2015 to Ripple.
What Technology it Uses and Some Big Investors behind Ripple
Ripple ’s technology relies on gateways, which are similar to a global ledger made up of private blockchains. A gateway is a digital portal that financial institutions, governments, and companies utilize to access the Ripple network, Ripple Transaction Protocol (RTXP). In essence, gateways are similar to banking institutions, but they share a standard global ledger called RXTP, which allows the transaction of any fiat currency or cryptocurrency. Since the Ripple network also works as a currency exchange between fiat currencies, it needs XRP to guarantee liquidity.
Like other cryptocurrencies such as Ethereum, XRP faces the double-spend problem that involves sending a similar cryptocurrency transaction twice to trick the system. However, it relies on a “trust-based solution,” whereby a group of nodes (Unique Node List) is picked to make decisions regarding the ledger’s history. The transaction history with the majority of votes for being correct is selected to advance the XRP ledger.
Ripple has completed five rounds of financing. Some of its biggest investors include Santander InnoVentures, Google Ventures,SBI Holdings,Seagate Technology and SCB Digital Ventures among others.
Price Changes in 2017 and then in 2018 up to current date
Although the price of XRP hovered around $0.2 for a long time, 2017 marked a great year for the digital currency. After crossing the $1 mark for the first time, it appeared that XRP was heading straight for exponential gains. In fact, XRP surpassed Ethereum to take second place among digital currencies, even though the movement was short-lived. Since exceeding $2, the price of XRP has been dropping and currently stands below $1.
As of March 27, 2018, the price of XRP dropped to $ 0.6 after a -0.33 change in 24 hours. At third place, it holds a market cap of 23,003,238,814.0 and a market volume of 379,303,000.
What is the Future of Ripple?
1) It may Dominate Cross-Border Settlements.
SWIFT remains the leading platform for undertaking cross-border transactions with over 11,000 financial institutions on its network. On the other hand, Ripple can be expected to make more partnerships with some of the most significant financial institutions globally in the coming days. Whether Ripple’s block chain technology will replace SWIFT’s technology is only a matter of time.
2) Become the Preferred International Payment System
While bitcoin can process seven transactions per second, Ripple can manage a whopping 1500. This incredible feat makes Ripple’s technology a sufficient replacement for international payment systems like VISA.
3) XRP Price Increment
Currently, only a few investors are familiar with XRP and more importantly its technology. However, more mainstream investors may begin to shift their focus from popular cryptocurrencies like bitcoin towards this digital currency thanks to increased awareness and information. This situation can cause the prices of XRP to shoot.
Should you invest in Ripple?
Although the trading volume of XRP is still lagging behind in comparison to other popular digital currencies like bitcoin, it is anticipated to surge upwards by the end 2018 as witnessed in 2017, possibly $7-$10. This situation is owed to the increasing awareness and interest towards the cryptocurrency. Also, as long as money exists in banks’ digital ledgers, the future of Ripple is still bright. As such, Ripple is a recommendable long-term investment if you’re looking to invest in cryptocurrency.
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