Bitcoin rival Ripple COULD take over CEO
Decrypted: The rapid rise of Ripple has attracted attention in recent weeks. At the beginning of year, its market capitalization was more than $100 billion. This value represents growth of almost 8000% during the course of 2017.
But Bitcoin’s popularity has caused demand for all cryptocurrencies to skyrocket in 2017, pushing crypto like Ripple and Ethereum, to also benefit by the cryptocurrency craze.
Our take: Ripple started 2017 at $0.006 and it’s now traded at $1.84. Can you imagine? This is a tremendous return! Far beyond anything Bitcoin did in 2017, which grew about 1400% last year.
The key difference between Ripple and Bitcoin is that it is not mined. The process that requires Bitcoin users to use algorithms to verify transactions. In contrast, Ripple is controlled by a San Francisco-based company. It creates the currency and releases new batches periodically. This frees Ripple from some of the Bitcoin’s recent criticism, which pointed to the enormous amount of energy used during the mining process.
So why is Ripple’s price rising?
Firstly, rather than naively view centralization/decentralization as binary, Ripple recognizes that decentralization can take many forms and likely resembles more of a spectrum than a dichotomy. “The view that something is either decentralized or centralized is harmful and draws attention away from what we should actually care about — to what extent particular systems have particular beneficial characteristics,” said David Schwartz, Chief Cryptographer at Ripple.
Another reason is there was a change in how prices are calculated. The crypto exchange CoinMarketCap made a change recently, excluding many Korean exchanges from its price calculations. Previously, CMC did not reflect what U.S. holders could actually sell for, and that caused a lot of confusion. The new price is more accurate and meaningful.
Lastly, XRP’s appeal to businesses is strengthening. Ripple announced that three of the top five money transfer companies worldwide will be implementing Ripple’s XRP token in their payment flow systems this year. The company’s emphasis on facilitating global financial transactions means it has been adopted by banks and other financial institutions, including Santander, the Bank of America and UBS. Ripple says it has licensed its blockchain technology to more than 100 banks to date.
Can Ripple replace Bitcoin?
The use of Bitcoin and Ripple is completely different. Ripple is faster and cheaper than Bitcoin, You can move stuff around faster and it’ll cost you less than Bitcoin, a least for the time being.
But I don’t think its going to replace Bitcoin. Ripple is trying to replace Swift and inter-bank transfers, that process more than 5 trillion dollars per day.
Bitcoin on the other hand is intended as a currency, which is developed to be used as mode of payment. Ripple is not a cryptocurrency.
Ripple has a bright future. It transfers money internationally at minimal fee avoiding currency conversion charges. It provides blockchain software to banks and has its own native currency (XRP), for working with regulators.
Ripple can succeed with or without Bitcoin. It can succeed without mining technology and it has a slew of big names behind it already. Ripple could be the first cryptocurrency used by big business, since it seeks to disrupt a current financial service.
Blockchain News 15 January 2018