The idea behind Ripple is to remove the US Dollar as the standard currency of exchange between two small-cap currencies. It operates on an open source and decentralized peer-to-peer platform that allows monetary transfer measured in seconds, rather than days. It could drastically improve the speed at which we do business on a global scale, but there are a lot of factors to consider before investing in this cryptocurrency.
Ripple Operates on a Consensus Protocol to Validate Account Balances
While cryptocurrency rivals like Bitcoin and Litecoin operate on a proof-of-work system that pays out those who contribute to the pool through mining, Ripple, and the XRP cryptocurrency operate on a consensus protocol to validate transactions. This different approach prevents double spending from XRP users attempting to send the same amount of money through multiple gateways. These confirmations take around five seconds compared to Bitcoin’s sometimes lengthy confirmation procedure, making it ideal for decentralized money transfer.
XRP is the Third Largest Cryptocurrency by Market Cap
While XRP trades for as little as $0.30 compared to other cryptocurrencies like Bitcoin and Ethereum, it is the third-largest cryptocurrency market cap hands down. BTC has a market cap of around $45 billion, ETH is around $31 billion, and XRP is $12 billion. That is slated to grow as it becomes the preferred platform for global instant money transfers.
XRP is Gaining Positive Reception in the News
Three highly liquid cryptocurrency exchanges will begin accepting XRP as an on-demand liquidity tool to transfer cryptocurrency between them. Those exchanges are Bittrex, Bitso, and Coins.ph. Each of these exchanges is located in the United States, Mexico, and the Philippines respectively. These exchanges are turning to XRP as a means of transfer for its speed and the ability to move capital from one jurisdiction to another with low costs. So far, technical analysis of XRP based on this news shows a bearish trend with a target of $0.15 before it bounces back up. The current bullish resistance for the cryptocurrency sits at $0.40, and buyers have not been able to reverse the current bearish trend. If the price can edge past $0.35 in the next few weeks, we could see another bull run for value past $0.40 per XRP.
XRP Value is Closely Tied to Bitcoin
Much like other altcoins, the value of XRP rises and falls with the price of Bitcoin. It’s important to understand why Bitcoin’s prices have such a volatile tide associated with it so you can better understand whether you should invest in XRP. It’s also worth noting that the exchange you trade on and the volume there closely impacts the price, too. Bittrex and Bitfinex are the two most popular exchanges for XRP and other cryptocurrency pairs, so start there if you want to ride the bull and bear tides as they come in.
XRP Founder Has a 17% Stake in the Company
Chris Larsen is the founder of Ripple and the XRP cryptocurrency, and he’s a big believer in his platform. He holds a 17% stake in the Ripple company, which saw massive gains in 2017 as cryptocurrency trading turned into a frenzy. These big players can make or break a cryptocurrency with their movements, so it’s important to see whether they’re holding or selling before you make your trading decision. Larsen himself is a firm believer in the power of Ripple as an asset exchange service between two currencies, which is why he continues to hold it and BTC at significant levels.