SAN FRANCISCO — Thanks to the Bitcoin craze, cryptocurrencies are being thrust into the limelight- and now it's Ripple's time to shine.
According to CoinMarketCap, Ripple is currently the second most valuable digital currency on the market, second only to Bitcoin. It's both a payment network and a cryptocurrency. It uses blockchain technology, but is differentiated from other platforms by its ties with legitimate financial institutions, reports CNN Money.
Ripple's currency is known as XRP and is not mined by users. The company has control, initially creating 100 billion coins, with 38 billion currently in circulation.
The rest of the coins will reportedly be released into the market gradually- up to a billion XRP tokens a month.
Other cryptocurrencies have a stored value and can be used to buy goods and services. But XRPs mainly cover transaction fees as an anti-spam measure, and are destroyed soon after.
Ripple's main purpose is to facilitate global money transfers. Banks take 3 to 5 days to process cross-border payments, but transactions on the Ripple network are cleared in only 4 seconds.
The platform also boasts low fees, and can handle up to 1,500 transactions per second, compared to only seven on Bitcoin.
By and large, the core function of Ripple is markedly different from other cryptocurrencies available in the market. Whether or not it's a good investment is another thing entirely.