Digital currency Ripple (XRP) recently overtook Ethereum and became the second-largest digital currency by market capitalization.
Bitcoin (BTC) currently has a market cap of $236 billion USD, Ripple $87 billion USD and Ethereum (ETH) $73 billion. CoinMarketCap reported a rise of 50% over 24 hours and the digital coin has grown by 700 per cent since the beginning of December at a price of $0.25.
Why the rise for Ripple?
One theory on the current success of Ripple is the entry of new investors to the digital currency markets. These new investors are being driven by the global acceptance of digital currencies, the widespread adoption of blockchain technology, Wall Street acceptance and increasing global regulation.
The earliest digital currency investors believed in the decentralized philosophies behind bitcoin and other early coins. Comparably, newer investors care more about finding safer investments as they join the digital currency bandwagon.
The volatile price of bitcoin thus leads investors to seek alternatives. Some believe bitcoin has peaked, others are looking for a cheap buy and a quick gain.
Investors who are looking behind the digital currency values and at the blockchain technology behind the currencies, are choosing to invest money where future utilisation and stability could lie.
Tech savvy investors are looking to currencies which employ or support blockchains which show potential for global financial system implementation or wider technological use.
Ethereum, Ripple and IOTA are three of a few which feature big name support and blockchain backbones which offer wider benefits for the finance and technology infrastructures.
Ripple and RippleNET
RippleNet is the blockchain network behind Ripple coin. Investment in Ripple coin is funding its growth, brand and development.
Ripple are developing RippleNet to provide “one frictionless experience to send money globally using the power of blockchain.” They propose a blockchain network which financial institutions can process customer payments “instantly, reliably and cost effectively.”
Ripple has a powerful list of investors including CME Ventures, Accenture, Google and Santander. Members also include many large banks and financial institutions.
RippleNet could connect payment providers, banks, corporations and digital asset exchanges. The third generation blockchain network aims to process transactions faster than SWIFT and handle the same volume as Visa.
The digital currency XRP offers use a speed which currently outpaces Bitcoin and Ethereum. It takes seconds to process a Ripple (XRP) transaction, while it can take minutes for an Ethereum transaction and possibly hours for Bitcoin.
RippleNet is supposed to be far more scalable, but is yet to be tested by the sheer volume of transactions experienced by Bitcoin and Ethereum blockchains.
Ripple is hoping to gain enough support from banks and financial institutions to replace the outdated SWIFT system. This move would give it an incredible foothold in the global race for dominance between the blockchains. Ripple also recently partnered with American Express in November and have reported strong links with Asia, including Japanese banking giants SBI Holdings in December.
Ripple (XRP) isn’t currently available on all the main digital currency exchanges but this could change quickly and lead to further market gain for the coin.