Ripple second most valuable cryptocurrency in the world after bitcoin

In recent weeks, the value of ripple has increased, making it the second most valuable digital currency and making it get recent attention.

The relatively dark cryptocurrency, also known as XRP, is now worth about $ 2.6 with a market capitalization of more than $ 100 billion, according to Coinmarketcap. At the beginning of December, it was trading at only 25 cents.

Even with the increase, ripple is worth considerably less than a bitcoin . After a tumultuous December, bitcoin traded at around $ 15,000 by the end of Tuesday, with a market capitalization of more than $ 250 billion.

What is different about ripple is that it is controlled by only one company: Ripple, based in San Francisco. There are reports of current and former executives of Ripple who became billionaires of cryptocurrency from its recent peak.

Ripple was launched in 2012 to facilitate global financial transactions. It differs from other digital currency platforms by its connections with legitimate banks. Companies that use the Ripple platform include Santander, Bank of America and UBS.

In recent weeks, financial services companies in Japan and South Korea have adopted Ripple technology, helping to increase the price of cryptocurrency.

According to Stephen Powaga, head of research at investment firm Blockchain Momentum, ripple and other crypto currencies have relatively low transaction costs, which makes them popular when people started looking for alternatives to bitcoin.

But unlike bitcoin, Ripple is not created, or "mined" by users. The company has control.

Initially created 100,000 million ripple coins and 38,000 million of them are in circulation at this time. Ripple administrators can release up to 1 billion coins per month, which Powaga predicts could overshoot the market.

"This is a concern for me, because if they choose to release them as fast as they can, in just four years, we will see the supply of Ripple doubled," he said.

That could put pressure on its price.

"I'm not sure that some of the newest players in the market fully appreciate the potential for inflation," Powaga said.

Payments that cross borders that can take hours with bitcoin or days with traditional financial transactions can happen in a matter of seconds with Ripple, according to the company.

Like bitcoin, Ripple's payment network, RippleNet, uses blockchain technology.

A blockchain is a public ledger that contains the transaction information of anyone who uses the service. Transactions are added to "blocks" or code links that make up the chain, and each transaction must be recorded in a block.