Third to Bitcoin and Ethereum, This Crypto is Creating Buzz

Investing Ripple may be the latest craze in the cryptocurrency world. Although its price still lags far behind Ethereum and Bitcoin, it has nonetheless gained 3800% in recent months, catapulting it to the number 3 spot on the list of over 100 cryptocurrencies with regard to market capitalization.

What’s more important, perhaps, is the technology that Ripple offers aside from its currency. Ripple has, in this way, broken a barrier that virtually no other cryptocurrency has, by finding a way to integrate itself within the broader financial world.

To some, this spells a new way for the future of the digital currency industry. To others, though, Ripple has some significant security weaknesses. What could bring down this rising star? “Strangers” can thus be connected to one another via a few intermediary people, all of whom know each other in some capacity.

For Ripple, this idea holds for transferring money: Ripple users establish connections with other users that they trust, and then funds are transferred along a chain to reach the ultimate recipient in a transaction. Within Ripple, if a user has connections to two other users, the amounts of funds entrusted to each will likely vary, while the total transferred is kept constant in order to generate liquidity.

Each user has an incentive to act as the intermediary, as he or she receives a small payment for the role. With this protocol, Ripple allows users to move funds quickly and for much less money in transaction fees than many other methods of money transfer. The openness with which the Ripple network operates has, on the other hand, also allowed for vulnerabilities to develop.

Researchers at Purdue University have found that, although the core of the network remains highly liquid , that the structure also allows for attacks on certain nodes within the network to cripple some users’ access to funds. In fact, some 50,000 wallets may be immediately at risk if such an attack were to occur.

However, the researchers suggest that the fact that they have been able to detect weaknesses in Ripple’s system is actually a good thing, as the conventional world of banking often lacks transparency in this regard. Having identified those weaknesses, Ripple’s developers may be able to work to correct them.

Crytpo Times