Bitcoin continues to lose dominance by market capitalization on the cryptocurrency market. At the beginning of 2018, the index of dominance according to Coinmarketcap bitcoin continues to decline and is currently at 34%. It is connected not only with the advent of many new cryptocurrencies, but with a significant increase in the old rivals, first and foremost, Ethereum and Ripple. We should highlight the last one, which only from the beginning of December rose by more than 10 times despite a strong correction in recent days. What is the reason for ripple’s growth, and whether it be real, not paper, in competition with bitcoin?
Ripple price rose to nearly $4 a week ago, on 4 January 2018 – this is a big part of 2017 it was trading significantly below $ 1. Although this figure seems ridiculous for those who compares it with the current price of bitcoin, the market cap of Ripple at the peak exceeded $ 110 billion, surpassing the air and becoming the second largest cryptocurrency in the world, which is ahead of only bitcoin. Today it fell back to $75 billion, again giving way to the airwaves, and the price of XRP token again went below $ 2.
Thus, to directly compare Ripple and bitcoin are incorrect, although many make this mistake, believing that all cryptocurrencies are equal. However, in this case they are absolutely not similar. If you delve into technical details, it is worth noting that Ripple is generally not a cryptocurrency and token. Ripple has no blockchain and no intrinsic value. Simply put, if you want the usual dollar did what can bitcoin do for making a quick international payments, you will get something like Ripple.
Unlike the Creator of bitcoin Satoshi Nakamoto, the identity of the creators of the Ripple is known to all. Ripple Labs is the company behind the token XRP. In addition, it is largely monitored and maintained by their creators, that makes it much less decentralized than bitcoin. In addition, one of the founders of Ripple is jed McCaleb, the Creator of MtGox, rather controversial figure.
«Ripple is very centralized, and wallet XRP is more like PayPal than bitcoin …. It is difficult to find any reasonable reason for the existence of XRP except for the fact that Ripple could earn money. A lot of money,» said
Laura Shin (Laura Shin), the editor of Forbes.
Ripple and altcoins
Even if we take bitcoin out of the equation, the Ripple will continue to be largely different from any other cryptocurrency. Unlike most altcoins, it can reach thousands or even hundreds of dollars, as token created 100 billion XRP, of which in circulation is about 38 billion, and the rest are on the accounts of the creators.
In addition, most digital currencies exist with the sole purpose of providing an alternative to traditional money. Ripple was designed for low-cost high-speed international money transfers in different currencies, the Ripple network actually plays the role of mediator — a kind of global online Bank. In addition, Ripple actually zeroes out the cost of interchange fees that can significantly speed up the transfer process.
Large financial institutions such as American Express, have partnered with Ripple to optimize their banking processes. Recently this cooperation has started and a major money transfer system MoneyGram. This is not to say that Ripple is really common in a large number of institutions in the banking sector.
Although the Ripple will never reach the heights of bitcoin, the value of its token still affect supply and demand. Before Coinbase has denied the rumors about adding cryptocurrencies to the platform, the price of a token soared, as people hoped to catch the wave and benefit from.
Ripple and cryptocurrency community
In the community of cryptocurrency attitude towards Ripple is extremely controversial and cautious, and activists of bitcoin often resort to outright criticism. If you eliminate the speculators, for which any cryptocurrency, regardless of the internal content is just a way to earn, most users of cryptocurrency are looking for this critical project.
For anybody not a secret that the supernodes, or gateways, of the Ripple network is another important element of centralization, as these gateways are responsible for converting one currency to another inside the network and the actual transactions. These nodes can lock in their user tokens with the real owner of the money has nothing to do with it. Network is not transparent, as it does not have a public blockchain, although it has some semblance of browsers addresses and transactions, but available information is not as detailed as in the classical blockchains. This means that you can trust money Ripple quite risky if you are in trouble with the government and the banking system, or don’t want to advertise their financial transactions.
On the other hand, it is obvious that the Ripple good prospects in cooperation with banks and regulators, and this means that the token XRP can be attractive for investment.
About the history of the founding and the details of the operation of the system Ripple read our article.