Ripple XRP, or to be precise, Ripple’s cryptocurrency unit XRP, is a new cryptocurrency that is believed to be threatening Bitcoin. It rocketed by 55.9% Friday to reach a high of $2.23 Friday. With a market cap of $86.3 billion, Ripple XRP has exceeded Ethereum’s $73 billion. The start-up company owns 61% of 100 billion XRP currently available. Ripple is now officially second only to Bitcoin in cryptocurrency market capitalization.
What is Ripple XRP: Ripplepay, Ripple and the XRP
Ripple started life way back in 2004 with Ripplepay, a payment method developed by Canadian web developer Ryan Fugger. It ultimately developed via OpenCoin, a 2012 San Francisco startup that ultimately developed the Ripple. The Ripple Transaction Protocol (RTXP) was based on Ryan Fugger’s concepts. The company used blockchain technology in order to develop a networked payments system for financial institutions such as digital asset exchanges and banks.
One XRP is divisible to 6 decimal places. The smallest unit is known as a ‘drop’, with 1 XRP equating to one million drops. When Ripple was devised, 100 billion XRP was created, and the protocol’s rules state that no more can be created. This was likely decided in the belief that as XRP became scarce their value would increase. XRP require no mining, and no new units can be found or created.
Benefits of Ripple XRP Over Bitcoin and Ethereum
The XRP benefits from having an extremely fast 4-second settlement time. This compares with over 2-minutes for Ethereum and more than one hour for Bitcoin. However, should the XRP system ever reach Ethereum’s size let alone Bitcoin’s, then one wonders what its settlement time would be then? According to XRP, it is being used by over 100 financial instructions.
Ripple vs. Ethereum and Bitcoin
Bitcoin is still largest by a long way and does not appear to be threatened by XRP. However, history shows that cryptocurrencies are extremely volatile. With a market capitalization of around $257 billion, Bitcoin represents around 41% of the total market cap for cryptocurrency as tracked by CoinMarketCap. XRP, or Ripple, represents only 12.5% and if this is the second largest, there is a long way to go before Bitcoin even feels threatened. Ethereum sits at only 12.1%.
To put these figures into real terms, Ripple XRP reached $1 just last week after starting the year at below 1 cent. As previously stated, it reached $2.23 Friday representing a 34,700% increase over the year it shows how percentage figures can be misleading! Ethereum was just over $753.50 Friday afternoon while according to Coinbase, Bitcoin was standing at a healthy $14,475.
