A co-founder of Ripple, a virtual currency, could briefly lay claim to being the world’s fifth richest person on Thursday, bypassing Mark Zuckerberg, as the Bitcoin boom widened. Thursday bitcoin competitor the value of Ripple has soared. Internet Explorer 9 or earlier. Go to the home page to see the latest top stories.
Chris Larsen, a co-founder of the Ripple virtual currency, at Ripple’s headquarters in San Francisco. He briefly became the world’s fifth richest person on Thursday as the value of Ripple has soared. SAN FRANCISCO — The virtual currency boom has gotten so heated that it is throwing the list of the world’s richest people into disarray. Consider what has happened to the founders of an upstart virtual currency known as Ripple, which has seen its value skyrocket in recent weeks. That would have briefly vaulted Mr. Larsen ahead of Facebook chief executive Mark Zuckerberg into fifth place on the Forbes list of the world’s richest people. Other top Ripple holders would have also zoomed up that list as the value of their tokens soared more than 100 percent during the last week — and more than 30,000 percent in the last year.
The boom has turned Ripple into the second largest virtual currency, within striking distance of the original behemoth, Bitcoin. These coins — with names like Cardano, Stellar, and Iota — are generally new twists on the Bitcoin technology, which uses a decentralized network of volunteer computers to keep a record, known as a blockchain, of all transactions. While most of these currencies were worth nearly nothing a year ago, many are now responsible for creating billionaires — albeit with rapidly fluctuating fortunes. If this is a tulip fever, the fever has spread to chrysanthemums and poppies. Larsen’s soaring wealth sparked a few congratulatory messages on Twitter on Thursday, even if the value of Ripple — and his Forbes ranking — dropped later in the day. But his net worth, and the ballooning value of Ripple tokens, mostly drew comments about the irrationality of the virtual currency markets, which appear to be largely driven these days by the fear of missing out, or FOMO. Jeremy Gardner, an investor who previously worked at the virtual currency hedge fund Blockchain Capital, which invested in Ripple.
There’s absolutely nothing driving this rally except rampant FOMO, misinformation, and speculation. Ripple, whose tokens are known as XRP, is far from the only virtual currency being fueled by the hysteria. 1 billion — when all the outstanding tokens are counted at their current value — despite many of them not having been used in any sort of transaction other than speculative trading. Bitcash, a Blockchain exchange office in Seoul, South Korea. Much of the frenzy around virtual currencies, including Ripple, has been driven by South Korean investors. Against this backdrop, Ripple could be considered a staid institution, though one with a colorful history. The company helped develop an open source Ripple software that makes it possible to move money between digital wallets.
The Ripple token is one of the currencies that can be transferred with the software. 20 billion at Thursday’s prices, putting him close to 40th on the Forbes list. The actual list is only published once a year, and no big virtual currency holders have been officially added. 14 billion on Thursday, making it the seventh largest virtual currency. Yet the fortunes of Mr. Larsen are not nearly as durable as those of other people on the Forbes list given that the value of virtual currencies fluctuates wildly. Larsen wanted to access his wealth by selling Ripple tokens for dollars, it would likely drive down the value of Ripple tokens — and his riches.