There is no denying that cryptocurrencies have become more and more popular, but it is so important that you know what you are investing in.
Ripple is set to be huge this year, and is currently the third most popular cryptocurrency in the world, but here are just a few things you should know before you invest in the virtual currency.
It was not originally called Ripple:
The name Ripple is very catchy, but it was not always called this. The company that produced Ripple is called Ripple Labs, but in 2013, it changed its name from OpenCoin.
The actual digital asset that is associated with this company is also actually called XRP; but they stick with Ripple as it rolls off the tongue easier.
You do not have to own XRP to use the Ripple network:
Unlike a lot of other cryptocurrencies, you do not have to own the virtual currency in order to use the network.
The Ripple Labs say that using the virtual currency can help institutions reduce their costs whilst accessing new markets.
The company owns over half of the total possible supply of XRP:
At the beginning of the year, the company owned 60 billion XRP. The total possible supply is 100 billion XRP. Then fact that they have such a big stake in their own product does not sit well with some.
However, Ripple Labs believe that controlled release of the virtual currency actually gives it an advantage.
The supply gets larger every month:
Ripple put 55 billion XRP into escrow at the end of last year. They created 55 different escrow contracts, which are set to expire at a rate of one per month over the next 55 months, which will free up as much as 1 billion XRP into the market. Any unused XRP will get put back into escrow.
They used to provide their own XRP wallet:
When Ripple first shot onto the scene, the company actually provided a website that allowed people to buy, sell, trade and store XRP, acting as a digital wallet for all XRP transactions. However, in 2016, they discontinued this service and instead worked closely with a third party wallet provider GateHub.