By Ryan Velez
Cryptocurrency is hot news, and it’s starting to move out of the realm of hype to something that is changing the way that we think about economics. Celebrity Net Worth tells one interesting story from the industry, and the shocker is that it has nothing to do with Bitcoin. Ripple, another cryptocurrency, propelled its owner to the 7th richest person on earth, briefly.
Ripple is one of the more popular cryptocurrencies of note lately. Unlike Bitcoin, Ripple is a pre-mined currency, which means all the coins are already available and owned in the world. Ripple started out with 100 billion coins (Bitcoin will ultimately have 21 million coins after something like 100 years of mining). Of those 100 billion Ripple coins, a large percentage are owned by the founders. These two points make it unpopular in some cryptocurrency circles. However, that didn’t change its surge in value this past December.
The total market value of Ripple soared 1,400% on the hysteria that Ripple (traded as XRP) was about to be the next Bitcoin. In mid-December, Ripple was trading at around $0.27 per coin. On January 4, a single coin topped off at $3.84. One of the co-owners is a gentleman by the name of Chris Larsen. Larsen owns 17% of the company that created Ripple (the company that controls 61% of all coins). He also owns an additional 5.19 billion XRP as a personal stake. On January 4th, his net worth topped $60 billion.
There’s one major hitch here: the bulk of this net worth isn’t liquid. Had he tried to sell even $1 billion worth of his XRP last week, the market would have been flooded with coins. This would have lowered the price of the coins drastically. At the time of this writing, the value of Ripple has declined to around $1.98. At that level, Larsen is still worth around $30 billion. There’s still more news on the horizon, though.
Ripple is planning to start a partnership with payment transfer giant MoneyGram. The partnership plans to build a financial liquidity tool for banks using a new service they will call xRapid. This announcement caused shares of MoneyGram to soar 13%. XRP was also up around 2.4%.