The recent boom of Bitcoin has brought cryptocurrencies into the limelight of media and business attention. Previously not that well-known token called XRP has taken the center stage and is now one of the front-runners. It represents a cryptocurrency that is linked to Ripple’s blockchain, which is marketed as a global, real-time settlement network.
The increase in value was impressive in 2017, to say the least, and this rising tide has prompted some to claim that the sky is the limit for this altcoin. Others, however, see its Icarus-like downfall inevitable.
Two sides of the coin
Bitcoin has paved the way for many other altcoins to enter the big game and it’s natural that people compare XRP to the top tog. Namely, it’s clear that Ripple’s market capitalization (it peaked at $148 billion) is playing catch-up with Bitcoin. However, putting them in the same pot can be misleading.
Yes, both have undergone a surge and represent hot cryptocurrencies, but they don’t have that many similarities. In fact, XRP is different from Bitcoin in few crucial ways. First of all, unlike the big brother, it’s not created in accordance with a particular timeline, via the process of mining on hubs like 2miners.
Instead of this, 100 billion XRPs are already floating around, many of which are in Ripple’s possession (around 61 billion). What is more, the use of XRP is fixed to the Ripple blockchain, a system that involves a framework known as Unique Node List (UNL).
Currently, it has five core validators, all run by Ripple. To put things in perspective, let’s just say that compared to this handful of nodes, Bitcoin sports 10,000 and Ethereum 30,000 of them. That is why a strong case could be made for XRP being a category for itself, separate from more decentralized cryptocurrencies.
Ripple effect
The main reason why we are discussing Ripple’s native cryptocurrency is that has increased in value by 1000% over the course of the last month. Make no mistake: this is a meteoric rise because it spent much of 2017 sitting under $0.30. What is more, XRP has grown 3,000% in 2017 in total, even overthrowing Ethereum for a while.
It entered the year second only to the king Bitcoin and many were already speculating when the Bitcoin will be forced to step down as no.1.
Still, these kinds of predictions could be premature: for that to happen, the token would have to hit $7. Not everyone is so optimistic when it comes to this scenario. Also, it should be noted that the explosion of Bitcoin propelled many other cryptocurrencies to dizzying heights. Some of them are even outpacing the most renowned digital currency, advancing by leaps and bounds. Ethereum is also poised to overtake Bitcoin, and it might do it before XRP.
A slippery slope
Of course, the success is not measured only in the ability to take the lead.
One of the Ripple’s prime goals is to facilitate hassle-free, seamless international transactions that don’t require a multitude of intermediaries to execute. In a nutshell, it’s offering a prospect of transferring funds quickly and safely across the globe. The company has managed to make strides towards this objective by securing a number of deals with reputable businesses.
Over 100 companies and financial institutions have signed for tests and even the giants like Amazon could soon formally endorse it. Likewise, Ripple’s digital darling already has a devoted fan base and a slew of crypto enthusiasts who have expressed faith in it. Besides, many other users see XRP as an affordable way to gain a foothold in the world of cryptocurrencies as well as investors who seek to diversify their portfolios.
Other cryptocurrencies will no doubt try to follow suit, but they have a mountain to climb. It will not be a walk in the park for XRP either because the currency is stumbling as of January 4. It has already experienced a fall of 30% in a single day, which pushed the market cap down: Right now, XRP is the third most valuable crypto token, as Ethereum has retaken second place.
Peaks and valleys
Today, XRP is more than a buzz-worthy, hot topic. It’s a cryptocurrency attractive both to rookies and established corporations. The volatility of Bitcoin has raided many eyebrows, though, and prescribes caution when dealing with cryptocurrencies. The future is still unclear, although it’s not hard to imagine XRP regaining upward momentum.
Ultimately, Ripple and XRP will share the fate of the cryptocurrency industry as a whole and follow the trajectory it takes moving into 2018. That being said, we expect it to stay at the forefront of the cryptocurrency ecosystem and continue to attract investors and consumers.
