Can Ripple (XRP) Overtake Bitcoin (BTC) In 2018? - Part II

Global Stock Markets

How does Ripple work?

Ripple has a novel system compared to the majority of cryptocurrencies, which has earned it the title of being one of the most scalable and fastest cryptocurrencies available.

While Bitcoin was created with an ideology to move away from traditional banking systems, the ripple was designed to be compliant with banks and their networks. This is enhanced by the ripple network’s sheer transaction processing capabilities. At the moment, the ripple network can process up to 1,500 transactions per second, while bitcoin can process only 10.

However, both networks are underpinned by powerful Blockchain technology. This refers to the system that is responsible for recording all transactions made on the network, like a digital ledger, but also for encrypting transactions. While bitcoin utilizes its vast community of miners to verify transactions and mine new Bitcoin, the Ripple network is mainly controlled by its startup. However, since expanding they have started to utilize third parties to aid in verifying transactions.

This system has allowed for increased stability on the ripple network. The company stated in a recent blog post that they were planning on shifting from single-handedly managing their own nodes, to employing trusted third-parties to perform this service instead.

While some cryptocurrency advocates feel that ripple’s system is still too centralized, ripple responded by locking their remaining cryptocurrency holdings in an encrypted account and now only releases a limited amount per month.

What causes the ripple price rise?

The ripple price has grown immensely in the last few weeks. At the start of December 2017, XRP stood at $0.25, reached $1.00 at the start of January and has since grown to $2.20. This sharp price increase is considered to have come about due to investors cashing in their bitcoin to invest in other cryptocurrencies. This accounts for the fact that the ripple price has continued to grow despite the fact that the bitcoin price has decreased.

In addition, the price boost has likely been encouraged by the fact that several major Japanese credit card companies announced that they would be conducting test pilots using ripple for projects that include international payments. Ripple is also significantly cheaper than bitcoin which makes it an easier investment.

At the moment, there are 28 billion ripples in circulation compared to bitcoin’s 16.7 million. Ripple boasts a total market cap of just over $90 billion, which makes it the world’s second-biggest cryptocurrency. Second only to bitcoin.

How to invest in ripple

Ripple is widely available on most of the world’s biggest cryptocurrency trading platforms such as Kraken and BitStamp. To buy ripple, you would have to create an account on the exchange of your choice and verify your personal information. After your account has been verified, you can deposit funds into your account to purchase XRP.

At the moment, the ripple is available on over 50 exchanges, with many more promising to add support for it in the near future. However, the cryptocurrency is still unavailable on one of the world’s largest cryptocurrency exchange platforms, Coinbase. The exchange’s CE, Brian Armstrong, previously stated that ripple was merely a distraction from bitcoin.

According to a virtual currency analyst from Interactive Investor, Gary McFarlance, there are several cryptocurrencies that are similar to ripple. A notable one is Stellar Lumens, which was created by a previous ripple executive. Stellar has also shown impressive growth but is yet to match that of ripple.
Considering ripple’s rapid rise to prominence, it is still too early to tell whether Ripple will hold onto its current value. In addition, the fact that it’s becoming widely utilized by centralized institutions makes it unlikely to ever truly overtake bitcoin, however, it definitely makes for a worthy competitor.