Bitcoin's Biggest Competitor: What You Need To Know About Ripple

Summary

• Ripple's XRP has quickly risen to the second most valuable cryptocurrency, with a market cap of over $130 billion.
• XRP is much different than other cryptocurrencies as it is controlled by Ripple, a San Francisco-based corporation.
• Some cryptocurrency proponents have expressed doubts about XRP, stemming from Ripple's creation and control of the system.

Summary and Thesis

^{SOURCE: AUTHOR BASED ON DATA FROM COIN MARKET CAP}

Ripple's XRP has quickly grown to the second-largest cryptocurrency by market cap. XRP is much different than many popular cryptocurrencies. Most of these differences stem from XRP's creation and ownership: XRP was created by a corporation, Ripple, to offer a service to financial institutions. Ripple still owns the majority of XRP, and is worth $200 billion, by some estimates. Its founders are richer than Google's founders, on paper.

However, others have expressed belief that XRP is a bad investment and perhaps a money-raising scheme from a corporation. I have done my best to present their arguments and fears about XRP. Most of these are related to Ripple's control of the XRP ecosystem, and concerned about future actions that Ripple could take which would hurt XRP investors.

I do not plan to invest in XRP, but I can see why it has and will attract others. As a cryptocurrency, it offers great performance, with low fees, quick speeds, and great scale-ability according to Ripple.

Ripple's Meteoric Rise

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Bitcoin (COIN, OTCQX:GBTC) has always been the largest cryptocurrency. Satoshi Nakamoto invented cryptocurrency and developed the first popular cryptocurrency. Until 2017, Bitcoin had maintained 80-95% market share of the cryptocurrency market, by market cap. That lead has weakened substantially, as I described in Bitcoin Is Weaker Than Ever But Ripple Is Not A Good Alternative. One of the biggest reasons for this weakening, with Ethereum, is the rise of Ripple's "XRP" tokens.

^{SOURCE: AUTHOR BASED ON DATA FROM COIN MARKET CAP}

XRP had a phenomenal year. During 2017, XRP gained an amazing 37,400% (CoinMarketCap). During the same time, XRP's market cap increased from $237 million to $89 billion. (There are a few different ways

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I own BCH (a remnant from the fork) and ETH.