Is it time to start using Ripple as money? Crypto-investors are asking themselves this question as the business-focused token’s value surged by a whopping 70 percent, and re-took its place from Ethereum as the world’s second-largest cryptocurrency by total market cap.
Bitcoin still stands as the hot digital currency product, so users of BTC needn’t fret too much, but Ripple has been waiting in the wings for years for its chance in the spotlight. It appears that moment may have come.
The currency’s market cap now stands at $76 billion, approximately $3 billion above that of Ethereum following an announcement that several major financial groups (including three of Japan’s largest credit card companies) had begun using its currency token XRP.
It is now estimated that over 100 separate monetary institutions employ Ripple for business transactions.
We should point out that Ripple XRP previously held the number two market cap rank for years, before Ethereum’s value began to surge in 2016.
However its status was often disputed and even discounted in some rankings — after all, BTC is $13,900 per token and XRP is just $2.65.
The reason is that Ripple functions quite differently to other blockchain-based cryptocurrency networks. Its entire supply of 38.74 billion XRP tokens has existed since it launched in 2012, rather than coming into existence gradually over many years via a mining process.
As with bitcoin, skepticism lingers in the wind. Chief executive of Coinsilium Eddy Travia, for example, seemed slightly confused about Ripple’s recent rise to power, and his latest words suggested doubt over whether Ripple’s stance could last, since users likely aren’t focusing on the right aspects.
“Ripple has done a good job of convincing big institutions to use their currency,” he explained. “The worry is that when the price goes up so much, it moves the focus from the technology to just the speculation.”
Ripple’s chief executive Brad Garlinghouse, on the other hand, spoke with great enthusiasm of the currency’s rapid move upstream, saying:
“2017 has been the year of the digital asset, and XRP has clearly outperformed every other digital asset. The reason for that is the market has realized that XRP is a highly efficient payments mechanism that is solving real world problems for real world customers with real money. People are increasingly realizing that bitcoin is not going to be a panacea for all these payments problems that people imagined it would solve.”
At press time, XRP was trading at roughly $2.65. This is a massive hike from the mere $0.36 it stood at in May. The purpose of Ripple is as an exchange facilitator, offering more cross-border payment options to customers who can then use XRP to move funds smoothly and instantly between currencies and countries alike.
“Payments with XRP settle in a few seconds,” Garlinghouse stated when discussing its advantages over other cryptocurrencies. “But if you buy a cup of coffee with bitcoin, it will be cold by the time the payment has been settled.”
According to Ripple’s website, XRP has a mere four-second settlement period, while Ethereum allegedly requires two minutes and bitcoin takes over an hour.
The jump in XRP’s market cap now places Ripple amongst the world’s 30 largest banks. It currently ranks ahead of Lloyd’s Banking Group in the U.K. and the Mizuho Financial Group in Japan.
Will Ripple’s price stay solid, or are we likely to notice some slumps as with bitcoin? Post your comments below.
Images via Ripple, Twitter