Bitcoin is not the only booming cryptocurrency in the second third of 2017. Ripple was the second digital currency to pass $10 billion dollars. In May the remittance exchange and remittance network hit the prestigious mark, but in April its value was only a tenth of that. But what makes Ripple successful?
What is a Ripple?
Ripple is a real time gross settlement system, as well as a remittance program that also features currency exchange.Yet at the same time, is also a cryptocurrency; XPR. While also boasting their own virtual ledger keeping track of all transactions.
The difference with Ripple
Ripple is unique. No other cryptocurrencies are intended to be created out of XPR. XPR is constantly decentralizing allowing the consumer to be more in control, and soon will be more decentralized than bitcoin. However, both cryptocurrencies boast a set capacity built into the formatting.
But unlike its counterpart, Ripple is a deflationary cryptocurrency. After every transaction a small number of tokens are destroyed and removed from the system. As time goes on this will increase the value of the left over tokens.
The intention is for banks to utilize what an enterprise solution cryptocurrency. Over one thousand transactions are able to occur every second with ripple. And the currency was designed to work alongside governmental regulations.
How does the decentralization occur?
Ripples owns about 60 billion of the 100 billion token limit. While this is very centralized the company intends to put 55 billion into an escrow account making them untouchable for 4 years. This will limit the total number of tokens in the market increasing the value of the cryptocurrency.
The Ripple effect
Ripple aims to be used as a bank to bank currency on an international level. A volatile market that can be changed at any moment is something they do not want. This is why the market is being limited. The transfer time is only a few seconds, but when transferring a large amount of currency even a small change in price will have harsh repercussions.
At the moment Ripple is even working with nearly 75 banks to work within a remittence network. And topping this off, some regulators are PUSHING for XPR to be adopted and used. Ripple wants to replace the current intermittent network SWIFT which currently takes days to process transactions.
As stated the aim to become a currency used in banks across the globe. Boasting speedy transactions of XPR while also offering a very stable value that will not fluctuate sporadically. In a few short months XPR has grown in value, and that is something the company is using as a driving force; yet at the same time banks desire what is being offered. The nature of XPR is what makes it unique and an asset for the future of banking internationally.