As Bitcoin takes a dive, many other digital currencies have begun to get their turn in the spotlight. Having quickly moved up the ranks, Ripple is currently the second most valuable virtual cryptocoin.

Throughout this week, the value of Ripple has skyrocketed and is currently sitting at $3.62. Its valuation has launched Ripple into second place, behind Bitcoin, and beating out Ethereum. Yet, just a year ago, Ripple was worth half of one cent.

Even though Bitcoin still holds its top position amongst digital currencies, many have voiced concerns about its slow transaction speeds, and use of energy in the mining process, along with a few other problems.  It doesn’t appear like Bitcoin is going to go down in ranking anytime in the near future, having established relationships with many large companies.  However, Ripple is in direct competition with it, due to several qualities it has to offer.

Ripple’s agenda is to establish itself as a key choice over other digital currencies by putting emphasis on its direct relationships with large financial institutions. Ripple was originally created to assist banks in speeding up and improving how they paid each other.  Around 100 banks are currently signed up to utilize its payment system.

They also like to use a measure called market capitalization to display just how significant a force a digital currency like Ripple, or actually its crypto-currency, XRP, has become.

Ripple’s market cap has been determined by multiplying the number of XRP coins that exist by the current dollar exchange rate. Yet, Ripple has no solid assets or other revenue streams to back that rate up.  Therefore, changing it into fiat currency may pose a problem if everyone tries to at once. So it’s important to continue to exercise caution in all crypto-currency transactions.

One reason for the rise in Ripple’s value may be that three of Japan’s large credit card companies agreed to use it to handle payments. Several other banks, located in South Korea and Japan have also jumped on board with Ripple to handle cross-border transactions.

One stark difference between other digital currencies and Ripple is that the digital tokens are not currently being mined by network members.  The coins have already been mined and are set up to be slowly released as the network sees use.

Ripples unique approach seems to be a hit among investors who have hurried to buy it this week.