Ripple and XRP
Ripple and XRP have become two of the more popular digital currencies of late. They’re used by banks, services, and individuals alike to process payments, exchange currencies, and send money all over the world with minimal fees, in seconds.
But what exactly is Ripple, and how does the XRP operate within this digital asset? With plenty of confusion and misinformation circulating the crypto sphere, we’ll provide a comprehensive, end-to-end guide to Ripple and XRP—clarifying everything you need to know.
A Brief History of Ripple
First launched in 2012, Ripple is an American blockchain company developing the Ripple Payments Network for global payments—enabling speedy and cost-efficient transactions for banks, financial service providers, and other institutions.
XRP Is An Integral Part Of The Ripple Netowrk
More specifically, Ripple uses its cryptocurrency XRP (Ripple’s native asset) to bridge different currency types, helping facilitate cross-border payments and currency exchanges. Compared to its predecessor, Ripple is extremely efficient, making it the perfect choice for banks and financial institutions.
For the most part, Ripple differs from other decentralized blockchain networks—as the majority of XRP’s associated network and protocol remains in the firm’s control, not released as an open-source network.
How Does Ripple Work?
Ripple enables an all-in-one platform for global payments—featuring on-demand liquidity, funds management, and real-time gross settlement in one cost-effective and time-efficient system. Moreover, Ripple makes use of innovative Ripple Protocol Consensus Algorithm (RPCA)—ensuring users can send and receive payments much quicker than on other payment networks (with transactions settling in 3-5 seconds).
To understand Ripple’s functionality, it’s important to break down the five essential components of its payment system:
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The Ripple Network
Ripple’s underlying infrastructure consists of two separate ledgers—the ledger of XRP and the ledger of RippleNet. XRP is the cryptocurrency used on this platform, allowing users to transfer its currency among other institutions. Meanwhile, RippleNet is the payment settlement system designed for banks and financial institutions. -
Gateways
A gateway is a financial service that acts as an entrance point to RippleNet. It acts as an intermediary between two Currencies—allowing users to both exchange and transfer their funds via RippleNet. -
Pathfinding
Pathfinding enables users to find the most cost-efficient exchange options available. This process helps users determine the lowest-cost and most efficient network path to reach their desired destination. -
Distributed Exchange
The distributed exchange—or DEX—is the decentralized trade engine built on RippleNet—allowing users to convert their currencies into XRP and trade with other users directly. -
XRP Ledger
Ripple’s XRP ledger underlies the RippleNet payment system—ensuring users can both send and receive payments and access XRP liquidity.
What Is XRP?
XRP is Ripple’s native asset—used as a bridge currency when exchanging different types of cryptocurrencies. Unlike Bitcoin, you can’t mine XRP—meaning it’s a pre-mined, non-inflationary asset.
Moreover, XRP helps facilitate fast, low-cost payment settlements on RippleNet—delivering settled payments in as little as four seconds, at a fraction of the cost of traditional payment networks, i.e., SWIFT.
How To Buy XRP
If you want to be a part of the XRP story, you’ll need to find a crypto exchange that enables you to buy and sell XRP.
Popular exchanges include Kraken, Bitstamp, and Bittrex—offering XRP to fiat currency trading—as well as Coinbase and Coinmama—which enables users to purchase XRP with cryptocurrencies or fiat currencies.
Additionally, you can invest directly via Ripple’s official website—allowing users to purchase the digital asset with a variety of methods such as debit cards, credit cards, or a bank transfer.
Advantages Of Ripple
Since Ripple is a revolutionary payment platform, it offers numerous advantages—making it increasingly popular among institutional investors and banks. In particular, some of Ripple’s advantages include:
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Faster Transaction Settlements – Payments settle in a matter of seconds—enabling users to seamlessly transfer funds across borders.
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Low Fees – Transactions on Ripple’s network are much cheaper than those via traditional banking networks.
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Ability To Exchange Any Currency – Unlike most networks, users can send any currency with Ripple—regardless of the currency used.
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Scalability – Ripple’s system can process up to 1,500 transactions per second—outpacing Bitcoin’s 7 transactions per second.
So, Is Ripple Worth Investing In?
Ripple’s latest series of partnerships focuses on extending the utilization of XRP—which, in turn, has fueled demand for XRP tokens. With further practical use cases and adoption in the future, Ripple is slowly becoming more reliable—indicating there may be future value in XRP.
All in all, Ripple and XRP have become two of the most talked-about digital currencies in recent times. Ripple’s RippleNet has enabled users to seamlessly pay with XRP—allowing cost-effective, time-efficient international payments.
Moreover, XRP has the potential to become an even more lucrative asset in the future—as banks and financial institutions increasingly rely on RippleNet for quick payments. Indeed, Ripple could very well be worth the investment in the long run.
