Any discussion of the world’s cryptocurrency sector would be incomplete without discussing Ripple. It has now become the world’s 3rd largest with a market cap above $7 BLN, following only Bitcoin and Ethereum. Ripple is however considered more than just a cryptocurrency, but rather a payment network within which Ripple tokens are transferred. If adopted on a large scale, this would revolutionize the world of bank transfers and payments, enabling money to be sent via the blockchain instantly, globally and with minimal costs. How exactly does Ripple work and how will it disrupt the $135 TLN-a-year global payments market?
Ripple – A New Payment Framework
The development of Ripple began in 2004. It was eventually released in 2012 as a decentralized, distributed real-time payment and settlement system. It is constructed on an open source, consensus ledger with a corresponding token called XRP (or “ripple”). In other words, the Ripple algorithm searches for the fastest and cheapest way of converting assets, including foreign exchange, cryptocurrencies and even airline miles.
RippleThe number of existing tokens is limited by the software protocol to 100 billion XRPs, which unlike Bitcoin are not “mined”. Transactions are processed and completed in 3 to 4 seconds, and Ripple’s fee corresponds to 0.001% of an XRP. This compares to up to a week of time and 1-5% fees for transactions completed with the SWIFT system. In addition to having no counterparty risk, the Ripple network is made secure by the XRP Ledger, where transactions are recorded by a team of full-time engineers and trusted validators.
Ripple & The Banks – A Growing Partnership
The main aspect that differentiates Ripple from Bitcoin and other crypto currencies is that it is not addressed to the consumer market but to financial institutions. That is the reason why the banking sector has taken a growing interest in Ripple. Santander became the first bank to allow cross-border payments using Ripple in May 2016.
In March 2017, Ripple announced that a consortium of 47 Japanese banks had completed a pilot with its enterprise software. At the present time, 75 financial institutions are active on Ripple’s network, and the company is partnered with a further 90 worldwide, including major players like Standard Chartered Bank, Westpac, Banco Santander, National Australia Bank, Akbank, SEB and BBVA.
Ripple has also its sights on the world’s central banks, and their $25+ TLN of balance sheet assets. In July 2017 the Bank of England tested in partnership with Ripple an inter-ledger system for cross-border payments. Ripple’s management also met with Bank of China officials in September 2017 to discuss the development and use of blockchain in China.
Growing Investor Interest
At the end of 2016 the Ripple network consisted of 170,000 credit links. and 100,000 wallets, or 6.6 times more than the number in 2013. XRP is now trading on 30 exchanges. Unsurprisingly, Ripple prices have been rocketing since the beginning of 2017, together with those of other cryptocurrencies:
Growing Investor Interest
In the first part of 2017 alone, the price rose an unprecedented 3,977%, making it the best performing crypto currency in the world.
Ripple Trading With IQ Option
IQ Option offers you a recognized, award-winning platform for trading Ripple. Ripple could well become the future network by which all international payments are made. If this were to happen, investor interest in Ripple will inevitably increase in the coming months and years. The large price volatility of Ripple creates countless opportunities for traders to profit from both upward and downward moves.
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Crossposted from blog.iqoption. Image source: 1.
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