Roughly a couple of weeks after crossing $1 benchmark for the first time, the price of XRP (the token behind SF based Ripple’s crypto-currency network) has surpassed all-time high of $3.08. Ripple, which now is the world’s second-largest cryptocurrency by value, has rallied up by almost 120 percent within a week.
According to CoinMarketCap, the cryptocurrency has seen a 28 percent price-surge in the last 24 hours alone. With the updated price tag, Ripple now has a market capitalization of over $119.44 billion and remains solid on the second position after Bitcoin.
Bitcoin still leads the pack with a market capitalization of $252 billion, whereas Ripple and Ethereum stand second and third with $119 billion and $88 billion respectively.
Changing Market Dynamics
This is an interesting development as it has led to a shakeup on the cryptocurrency market’s leaderboard. Ethereum has long been the second hottest cake after Bitcoin, but with the latest move, XRP has a lead of roughly $30 billion.
In fact, it’s just a one-week-old story when Ripple passed Ethereum in terms of market cap – and has been the number three since the last week of December.
With the surge in the prices of currencies, the overall cryptocurrency market has also increased the size of pie – with the total market cap crossing $713 billion.
Royal Bank of Canada (RBC) predicts cryptocurrency and blockchain technology as a potential $10 trillion ecosystem. With 12 of the top 20 currencies indicating green, the market seems to be on the robust growth path as “altcoins” promise equally decent opportunity to investors who can’t buy Bitcoin.
What is Ripple, and how it’s different from Bitcoin?
There are over 1,300 cryptocurrencies in existence. While Bitcoin is leading the market, several other currencies have become obvious alternative choices for the investors.
Ripple was launched in 2012 as an international payment solution for banks and financial institutions. It differentiates itself from other cryptocurrency platforms by its connections to legitimate banking channels. Some leading financial institutions like Bank of America use Ripple.
Another difference between Bitcoin and XRP is that XRP is controlled by just one company – a San Francisco-based startup, Ripple.
Unlike Bitcoin, XRP isn't "mined," by the users, but issued by the company that has it under direct control. Initially, they created 100 billion coins and 38 billion of them are in circulation – while the company can release up to 1 billion coins per month.
Eyeing Enterprise Payments
Ripple’s key selling point is its ability to use blockchain technology to solve the problem of late international payments. Currently, a cross-border payment may take a few days to complete with some hefty fees and transaction charges. If the transaction is high-value, it’s well and good; however, a small transaction can be a headache for banks and enterprises as it takes a lot of effort and time to move money – with little or no return.
Ripple allows enterprises to instantly process this using its XRP coins. Enterprises can get instant liquidity without having to pay fees. Ripple’s XRP coins work as a bridge between fiat currencies and process the transactions within few seconds – faster than any other cryptocurrency. The market has responded to the value the Ripple team has created by investing heavily in XRP.