The value of RaiBlocks (XRB) has increased exponentially over the past month, going from under $0.10 at the start on November to a current all-time high of $1.42. This is despite RaiBlocks still only being available on the minor exchanges BitGrail, Mercatox, and BitFlip.
What is RaiBlocks? And why has its value shot up so suddenly?
Both of these questions are best answered with reference to IOTA, the innovative cryptocurrency that moves beyond blockchain to settle transactions peer-to-peer.
The biggest problems preventing mass adoption of Bitcoin as currency are slow transaction times and high fees. The more popular Bitcoin gets, the more congested its network, and therefore the more entrenched both these problems become.
There is also the additional problem of the energy-intensive Bitcoin mining process. With increasingly powerful hardware needed to mine blocks, Bitcoin poses a serious threat to efforts to combat global warming. Bitcoin mining already consumes more energy than many developed countries, and this problem will only increase as both Bitcoin’s popularity and the difficult of mining each block increases.
IOTA does away with these problems with ‘the Tangle.’ The Tangle sees all transactions recorded directly peer-to-peer and then added to the network at a convenient later time.
IOTA plans to use the Tangle to connect all manner of devices that are part of the Internet of Things (IoT). With zero transaction fees and instant transaction times, IOTA allows devices to share data instantaneously. This has proved of huge interest to technology firms, as IOTA provides a way for them to monetize the mountains of data that are generated through the IoT.
IOTA’s breakout moment came when a partnership with Microsoft was announced. After months of trading at around $0.50, IOTA hit $1 on November 27 and $5.34 on December 6. The price has fluctuated wildly in the $3 to $5 range since then, but even at the lower-end of IOTA’s new normal, it represents an incredible return on investment for those who got in at the sub-$1 stage.
RaiBlocks operates on similar principles to IOTA, creating ‘timeless’ transactions that don’t require updating the entire blockchain to be processed. Just as with IOTA, RaiBlocks allows for instant transfers, zero transaction fees, and has added benefit of being eco-neutral.
Whereas IOTA is primarily intended for machine-to-machine (M2M) transactions, RaiBlocks is almost entirely focused on being a peer-to-peer (P2P) method of transferring value.
It seems extremely likely that the surge in RaiBlock’s valuation is at least partially attributable to the IOTA Effect – investors who missed on the explosive rise in IOTA’s valuation over the past few weeks saw a chance to get in before the boom with a similar coin.
IOTA has already surged to the top of the coin market cap rankings and has spend the past few days duking it out with Litecoin for fourth on most lists. With a market cap closing in on $12 billion, IOTA is an incredible success story even by the lightening-fast standards of the cryptocurrency market.
At the time of writing, RaiBlocks is at number 55 on the ranking of top coins by market caps, with a market cap of under $200 million. As already mentioned, it has yet to be listed on any major exchanges, but has already seen a surge in its valuation. Supply of XRB is restricted to just over 133 million coins, which gives each coins’ value further room to grow against IOTA, with a total supply of almost 2.8 billion MIOTA.
Both RaiBlocks and IOTA are examples of Direct Acyclic Graph (DAG) coins, which is a short-hand for the innovative way transactions are directly and instantly recorded without requiring blockchain-wide confirmation.
The other major DAG coin currently available is Byteball, which has a similar market cap to Raiblocks but a much more limited supply of just 1 million coins, resulting in a current valuation of around $290. Byteball has seemingly similarly benefitted from the IOTA Effect, almost doubling in value from just over $150 on November 12.