The second largest cryptocurrency in the world, has increased a staggering 33,000% in 2017 crossing $90 Billion market cap. Just to put things into perspective, our beloved Bitcoin rose ‘only’ 1,500% in the past 12 months, remarkable!
We know that Ripple made those who invested in it very wealthy, but let’s see why that happened.
First thing you should know, Ripple isn’t a standard token like Bitcoin, sounds trivial, but it is crucial when trying to understand the functionality of XRP. In a nutshell, coins trade on their own value, tokens have to be tied to something else, usually another coin, value or product. Ripple does not discriminate between fiat and crypto, it is essentially backed by traditional fiat currencies like Dollar Euro or Yen, as well as cryptos. XRP acts as a bridge currency to other currencies.
Secondly, while cryptocurrencies exists as digital money with the intention of replacing or improving the outdated financial systems and the circulation of currencies, Ripple offers cheaper, simpler and faster solutions for global money transfer.
Brad Garlinghouse explained the problem that XRP solves in a beautiful way, “the fastest way to transfer money from the U.S. to London is to get on plane and fly it over there ..Transfers that used to take days will be completed in real time, allowing money to move as fast as business today”, enough said.
Exactly why Ripple has rallied exponentially so fast isn’t obvious, what surely helped fuel its success is the adoption of the technology by major global financial players. Hedge funds, US South Korean and Japanese banks and even the mighty American Express have already partnered with Ripple. According the company, there are more than 100 financial institutions who use its network. Astonishing!
Like most other things in the Cryptospace, no one can claim to know what the future has in store for Ripple and its role in the financial system going to be, but rumours of listing it on Coinbase, the largest US exchange, can give some indication, at least to the fact that XRP is here to stay.
Now, to wrap things up, or to be more exact, leave you with some question marks until our next post, Ripple Labs still owns approximately 60% of the total XRPs in circulation, that gives the company a total market cap considerably higher, even higher than Bitcoin.
Will the reign of Bitcoin come to an end? Can Ripple dethrone the king?
Only time will tell. Until then, keep your eye on this giant as it continues its global expansion.