By Mark DeCambre, MarketWatch
Will Ripple eventually surpass bitcoin in the digital-currency world?
The virtual currency known as Ripple coins soared to a record on Wednesday, solidifying a rally in the world's No. 2 digital asset and closing in on bitcoin for dominance of the nascent industry.
Ripple has surged over 120% over the past week, with a single coin valued at $3.17 trading at intrasession record, according to research site CoinMarketcap.com (https://coinmarketcap.com/). That puts San Francisco-based Ripple Labs's total value at about $123 billion. However, factoring the total supply of Ripple coins, including some 55 million Ripple coins held in escrow by its executives, the total value of Ripple is over $300 billion. That technically exceeds bitcoin's value, which is at $254 billion at a price of about $15,200, according to the site.
Ethereum stands squarely in third position with a total value of $90 billion, after Ripple rocketed past the formerly No. 2 currency just last week (http://www.marketwatch.com/story/watch-out-bitcoin-ripple-coins-march-higher-threaten-to-overtake-ethereum-2017-12-29).
The move for Ripple would mean that the so-called flippening (https://www.flippening.watch/), to determine which of the alternative coins supplants bitcoin, may already be under way.
Ripple's "XRP" coin, as its currency is referred, has surged more than 48,000% since the end of Dec. 2016. That means that $100 invested in the company from the end of 2016 to its current level would be worth about $48,000, representing a stunning return, even when compared with bitcoin's roughly 1,440% surge over the same period. For further comparison, the Dow Jones Industrial Average soared 26% over the same time, while the S&P 500 index has returned more than 20%.
What is Ripple
Ripple Labs launched its blockchain protocol in 2012 as an initiative to provide a payment processing system for financial entities. Among a barrage of digital-currency companies offering blockchain, or decentralized, distributed-ledger technologies, Ripple is considered the outfit with the most legitimate business model from a Wall Street perspective.
XRP tokens are used to help facilitate its intra-bank transactions, and boasts a faster processing time than bitcoin--seconds versus minutes.
Read: 7 cryptocurrencies to watch in 2018 if you're on the hunt for the next bitcoin (http://www.marketwatch.com/story/7-cryptocurrencies-to-watch-in-2018-if-youre-on-the-hunt-for-the-next-bitcoin-2017-12-12)
So-called blockchains, the record-keep technology behind bitcoin and other cyber units, have garnered wider acceptance in recent years, notably because it promises a decentralized means of doing business and exchanging money, with a community of so-called miners who verify transactions instead of one central entity or bank. That decentralization has been one of the main appeal of many of those with a more antiestablishment sensibility in the bitcoin universe.
However, Ripple run by CEO Brad Garlinghouse is controversial among digital-currency purists because it caters to the establishment and provides a blockchain that is centralized, meaning a third-party helps to mediate money transfers.
The New York Times once described Ripple (https://dealbook.nytimes.com/2013/11/11/the-rush-to-coin-virtual-money-with-real-value/?_php=true&_type=blogs&_r=0)as "a cross between Western Union and a currency exchange, without the hefty fees" because it's not only a currency, but also a system on which any currency, including bitcoin, can be traded.
Why has 'XRP' been on a tear?
A number of Asian financial institutions have signed on to adopt Ripple's blockchain technology, bringing the company's roster of financial clients to over 100 (https://www.cnbc.com/2017/10/10/ripple-has-over-100-clients-as-mainstream-finance-warms-to-blockchain.html), including American Express (https://www.cnbc.com/2017/11/16/american-express-santander-team-up-with-ripple-on-blockchain-platform.html), Standard Chartered UniCredit, UBS and others.
There are also unfounded rumors that Ripple coins will eventually be on popular currency exchange Coinbase, which has added to speculative buying.
-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires