How Ripple Works and Why It's Surging

Ripple is just the latest digital currency that uses blockchain encryption to gain prominence over its rising value.

Released in 2012, Ripple provides a “basic infrastructure technology for interbank transactions — a neutral utility for financial institutions and systems.” It’s designed to make it easier to send money across borders between people with different banks, quickly and easily. It’s a “real-time gross settlement” system, which means it happens fast (as in “real time”), it happens in full (“gross”), and there are no give-backs (“settlement”).

See also: Is Ripple Coming to Coinbase?

Last week, Ripple — whose cryptocurrency goes by the name XRP — became the second most valuable cryptocurrency on the internet, topping Ethereum. On Tuesday, its market cap was $92.3 billion, far exceeding $84.7 billion for Ethereum. (Bitcoin was at $253 billion at the same time.) It had the biggest 2017 of any cryptocurrency, surging in mid-December from around $0.25 a coin to its current valuation of $2.38, which is still low enough to get in early for anyone who’s watched bitcoin’s dramatic rise.

The video above was released by Ripple in 2016, explaining how it enables cross-border payment transactions, using XRP, between banks. Ripple wants to partner directly with banks, and in recent months it has partnered with American Express and Santander.

Ripple boasts a faster transaction time than bitcoin — a few seconds instead of more than a hour — which means transfers can happen easier and more frequently.

The surge has been celebrated by the people who work at California-based Ripple.

It’s also made people who own a loot of XRP very rich, very fast.

See also: How to Buy Ripple in 4 Steps, the Cryptocurrency Surging in Value

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