Bitcoin might have some new competition, in the form of new cryptocurrency Ripple. Ripple is different to most other forms of virtual currency, and it is fast becoming the hot currency at the moment. We take a look at why.
Ripple is completely different to other forms of currency because it cannot be mined, and it cannot be used to go shopping in the same way that others can. It is operated by a private company, and it is much smaller than the likes of Bitcoin. This has not stopped it from soaring in price by a whopping 29,000 percent in the past 12 months.
Ripple is a token, that has been created and backed by the company Ripple Labs. It is a more centralised cryptocurrency, and is very different to others. Most cryptocurrencies, including Bitcoin exist for the purpose of existing as digital money, but Ripple has been designed to solve the global problem of transferring money from one country to another. It allows users to pay transaction fees between financial institutions, which allows the funds to be transferred between banks that have agreed to use this service in a matter of seconds. This is something that has not been done before.
There are a number of reasons that Ripple have suddenly increased in popularity, but the main thing that has sent the price soaring is because there are rumours that it will be added to the biggest cryptocurrency exchange in the US, Coinbase. This would allow anyone to easily buy them, and because there is a limited supply of tokens; this could raise the price of them.
Just like any new currency, there are of course sceptics, and Ripple is no different. Many are concerned by the price rise as Ripple has a very niche market, and there is limited use for it, which have led some to start questioning the value of the token.
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