There is a new heir apparent in the cryptocurrency world. Ripple, or XRP, a cryptocurrency established by Ripple Labs Inc., surpassed Ethereum in trading New Year’s Eve to become the second-largest coin or token behind bitcoin by market capitalization.

Ripple Labs was founded in 2012 with XRP being released in August 2013 as a cryptocurrency that could be used to facilitate global interbank transfers as an alternative to the Society for Worldwide Interbank Financial Telecommunication or SWIFT network. Although Ripple Labs has had some success in establishing partnerships with global banks, such as through the Global Payments Steering Group that includes Bank of America Merrill Lynch, Santander, UniCredit, Standard Chartered, Westpac Banking Corp. and Royal Bank of Canada, it has primarily stayed off the radar — until recently.

Swept up amid the mania that saw bitcoin surge to a high of nearly $20,000 after starting the year just below $1,000, XRP gained attention as an altcoin — an alternative cryptocurrency. Unlike many new coins and tokens entering the market during a surge of initial coin offering, XRP actually had a provable business case and an established company behind it.

XRP began the year at $0.006 and now sits at $2.25, a staggering rise of 35,000 percent to give it a market cap, as of 11 p.m. EST, of $87.6 billion, according to data from Coinmarketcap. Bitcoin is valued in total at $321 billion and Ethereum at $72 billion.

Although it’s surging in popularity, not everyone is a fan of Ripple Labs and XRP. Some claim that XRP is not a real cryptocurrency because at its core, it does not operate on an open blockchain mined like 99.99 percent of other coins and tokens. As Investopedia pointed out earlier this month, XRP is a compromise between crypto and fiat money that wasn’t designed to be a coin, or a normal cryptocurrency by the standard definition. “Ripple does away with the idea of XRP as any kind of investment asset and instead focuses on making the blockchain as strong as possible… for the good of the institutional entities that Ripple serves, like American Express or Santander Bank,” the site noted.

Because XRP is not on an open blockchain, it sits on a set allocation as determined by Ripple Labs, so far 100 billion XRP. And the company itself holds the majority of the coins. So the current price surge reflects a scarcity of XRP available. But unlike bitcoin or Ethereum, Ripple Labs can potentially add more liquidity to the market should it decide to do so.

Regardless of whether the underlying technology and coin allocation is sound compared with others in the market, there’s no question that it has turned out to be a popular altcoin choice for investors, at least so far.

Image: Ripple Labs