Ripple is facing an unique dilemma. Ripple Labs, the parent company is now holding XRP digital coins worth $30 billion. Its founders are now facing an issue to find new users to buy these coins. Ripple is a real time payment settlement network where transaction fee is paid by users in XRP tokens. The digital token cannot be mined. Hence 100 billion XRP coins came into existence at the time of its launch. Some of it has been released while the rest will be released by the team in the future.
A $30 billion dilemma
Financial institutions can use this payment system to transfer funds instantly across 27 countries at low fees. The network can handle 1500 transactions per second while bitcoin can only handle 3 to 6 transactions each second. Ripple has different applications as compared to other digital currencies. Any financial institution can use any of the three payment transfer solution. The biggest opportunity for Ripple lies in the banking industry. It is being tested or used by over 100 global banks. Banks using the platform pay a transaction fee in XRP which is sold to them by the company.
The company distributed XRP tokens in the community to gain more users. But it came into attention after its prices rallied in January 2018 as investors began buying more of the digital coin. Ripple has great potential and a unique advantage over other cryptocurrencies. It is built using the same blockchain technology as cryptocurrencies. But, it uses a distributed consensus ledger. Bitcoin can only be used to transfer payments from one user to another. Many financial companies are using it for faster payment settlement.
The idea of a faster and advanced payment system was conceived by Ryan Fugger in 2004. He developed an early prototype of his project. In 2011, Jed McCaleb was working on a digital currency system. Chris Larsen joined him after a year. The two discussed their idea with Ryan Fugger. Ryan Fugger then decided to hand over his project to the two Ripple cofounders and thus Opencoin was born. Opencoin was later renamed to Ripple Labs.
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