What is Ripple? A detailed Guide to this Cryptocurrency

Coins / By / May 19, 2020
Ripple

Ripple: Everything You Need To Know

We’ve been exchanging goods and services with each other since the dawn of humanity. Our ancient ancestors deployed a fairly simple system for trading items. But they didn’t have the technology that we have today. We’ve made some great leaps in our exchange system.

Have you heard of cryptocurrency? This is a digital currency that helps us transfer funds between each other. And this operation takes place independently of a central bank. You may have heard of some popular cryptocurrencies, such as Bitcoin and Ethereum.

But we’re here to introduce Ripple (XRP) to you. Ripple is indeed a cryptocurrency, but it’s also more than that. Ripple is a platform of its own. The network itself is known as a distributed ledger, which means that there is no centralized administrator involved here.

Do we have your attention so far? There’s a lot more to Ripple than meets the eye. It’s a bit different than typical cryptocurrency. XRP itself wasn’t initially created as a way for purchasing various goods and services. We’re here to show you all the ropes of Ripple.

Ripple

RippleNet: Ripple’s Network

As we mentioned before, Ripple is more than just a cryptocurrency. It’s also its own platform. RippleNet combines different payment providers, such as banks and other businesses, that provide different monetary solutions to the people who are involved in transactions.

RippleNet is a decentralized system. This system has been welcomed with open arms by many different banks and payment providers alike. Experts have mentioned that this decentralized payment system from Ripple could save global financial institutions over $1.5 billion.

RippleNet is actually in strong competition against various legacy banking systems. One such system includes the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The US Federal Reserve has already started testing Ripple to seek its range of advantages.

XRP: Ripple’s Cryptocurrency

Now that we’ve established an understanding of RippleNet, let’s take a look at Ripple’s form of cryptocurrency. It’s known as XRP. All transactions that pass through RippleNet will use this form of cryptocurrency. International payments are made with ease with the use of XRP.

Ripple’s XRP cryptocurrency doesn’t discriminate when it comes to different fiat currencies. XRP can be thought of as a bridge currency. This is because it helps bridge the RippleNet system with global currencies such as the U.S. dollar and the euro. This is extremely convenient.

Ripple’s XRP has made some astounding gains over the years. Let’s consider the year of 2017. Bitcoin was a hot topic back then, and found itself reaching great heights. But did you know that XRP actually had bigger gains than Bitcoin in 2017? We’re talking gains over 30,000%.

The Business Solutions Of Ripple

As you can probably tell by now, Ripple brings a lot of advantages with its network and cryptocurrency. These advantages can be reaped by many different financial institutions and businesses alike. Let’s take a closer look at some of the business solutions provided.

  1. xCurrent: This is one of the biggest business solutions provided by Ripple. This form of processing payments, known as xCurrent, is currently giving competition to the well-known SWIFT system that has been in place for quite some time by financial institutions. This business solution is all about efficiently processing various transactions quickly and safely.
  2. xVia: Ripple has provided this business solution to enable efficiency when navigating through transactions in high volumes. It’s best fit for companies that participate in B2B. Ripple provides xVia to help companies work with each other to perform many transactions as needed without hassle. Ripple’s xVia is fairly new and is still a work in progress for the time being.
  3. xRapid: Before going into detail about xRapid, it’s best to understand a little more about liquidity first. Liquidity involves the amount of liquid assets (such as cash) that a company can use to operate the business at the current time. Ripple’s xRapid helps companies keep the costs of liquidity at a minimum when making transactions across the globe. It’s a big deal.

It’s good to keep in mind that these business solutions aren’t coming from some new-name startup company. Ripple is a reputable name that has made great leaps in the world of finance. The US Federal Reserve has actually begun testing the efficiency of xCurrent.

Ripple: Pros & Cons

Ripple has many advantages to its name. Below are some prime examples:

  • First and foremost, Ripple helps to minimize the costs of liquidity involved with transactions that take place between parties that are in multiple countries all over the globe.
  • While there are many financial systems that exist nowadays, Ripple provides business solutions that are taking the financial world by storm. These solutions are both quick and cheap.
  • There’s not much risk involved when it comes to investing in Ripple. This is because RippleNet and Ripple XRP go hand-in-hand and can’t function without each other.
  • Ripple doesn’t discriminate against the different forms of fiat currency. The amount of commission involved is held to a minimum. It’s a cost-efficient system in general.
  • Ripple is supported by many different banks all over the world. Some examples include Union Credit, Axis Bank, and UBS. These are just a handful of the many banks supported.

Let’s move onto the negatives. Below are the cons related with Ripple:

  • Every single XRP token has already been mined by the developers of Ripple. This means that Ripple Labs gets to decide the time that XRP is released, along with the amount of tokens.
  • Unfortunately, Ripple Labs owns a very strong majority of XRP. But exactly how many coins are owned by Ripple? They actually own over half the coins, at somewhere around 60%.
  • When it comes to Ripple, the software is open source. This means that the original source code can be freely distributed and modified. This could cause trouble due to hackers.
  • Unlike many other altcoins out there, XRP is actually somewhat centralized. Ripple Labs maintains ownership and can release coins in any amount at any time that they please.
  • While Ripple has a reputable name, RippleNet and XRP tokens are still fairly new in the world of finance. There’s still a ways to go before the masses begin to adopt the system.

So, what did you think of the pros and cons of Ripple? The key takeaways here include all of the beneficial solutions provided by Ripple, along with the frictionless transactions. On the other hand, Ripple is a bit centralized and still a fairly new system in the world of finance.

What The Experts Say About Ripple

Let’s first start with Roman Guelfi-Gibbs. He’s the CEO for Pinnacle Brilliance Systems. He mentions that he believes Ripple will make some great leaps in the future. He says that it will probably take a great deal of time for the market to take in the different business solutions provided by Ripple. He also mentions that the world of crypto is filled with uncertainty.

Next up is the president of Global Blockchain Technologies, Shidan Gouran. Shidan has a little less faith in Ripple. There are three main reasons behind this mindset. First, it’s because of the low market cap of Ripple. Second, Ripple is geared more towards trading than for spending. And third, Ripple may not be able to stand up against powerhouses such as Ethereum.

The associate director of Long Island University, John-Paul McCaffrey, has taken a fairly neutral stance about future predictions with Ripple. He mentions that there’s always room to grow, and Ripple is still a fairly new system in the world of crypto. John-Paul believes that the uncertainty of crypto can go any way, and that Ripple may make some big changes in the near future.

Ripple Protocol Consensus Algorithm (RPCA)

What exactly is a blockchain? Basically, it’s a system involved in cryptocurrency transactions which is maintained across a stretch of multiple computers. These computers are connected through a peer-to-peer network. And Ripple doesn’t have a blockchain at all.

But, wait a minute, how are the transactions of Ripple being verified if there’s no blockchain? Isn’t this a big issue with cryptocurrency? Well, Ripple actually invented its own system. And this system is known as the Ripple Protocol Consensus Algorithm. And it’s quite convenient.

It’s easiest to describe RPCA with a solid example. Let’s look at the key term “Consensus” in RPCA. Let’s suppose you attend a gathering that requires every single person to agree on something before it takes effect. If one person disagrees, then nothing will take effect.

Frequently Asked Questions About Ripple
  • Q: Can I use Ripple to make anonymous transactions?
    • A: You won’t be able to make transactions and stay anonymous at the same time. It’s not the primary goal of Ripple. Instead, they seek to improve existing financial systems. This doesn’t mean that there aren’t rules and regulations carried out to keep your information safe.
  • Q: How much does it cost for Ripple transactions?
    • A: You’re not going to rack up fees by carrying out transactions through Ripple. One major advantage of using XRP is the low transaction cost. Here’s what happens: a small amount of XRP gets annihilated during transactions. And this helps to prevent massive amounts of spam.
  • Q: Should I invest in Ripple?
    • A: This is a tough question to answer. When it comes to investing, there’s going to be a bit of risk involved. We definitely recommend keeping your eyes on Ripple in the near future to see how it fans out. It should be noted that there are unlimited tokens, making them cheap.
  • Q: Which altcoins are similar to Ripple?
    • A: There are a couple altcoins on the market that are extremely similar to Ripple. For example, QASH is a form of cryptocurrency based in Japan with its own business solutions. Stellar Lumens is similar as well, and was established by Jed McCaleb (the creator of Ripple).
Criticising Ripple

What do you think of RippleNet and XRP so far? It’s truly an established system of its own. There are plenty of advantages involved here, but Ripple has actually undergone some major criticism over its short lifespan thus far. Let’s venture further into this topic.

There are many banks that are already using and testing Ripple. There are also plenty that plan to use Ripple at some point or another. But it’s just a test right now. Ripple isn’t widespread by the masses right now. Most involved transactions use Ripple’s system, but not XRP.

There’s another big issue in the world of Ripple. You can actually have your transactions frozen. It’s possible that you can find a reversal on your transactions. And this isn’t just speculation. The creator of Ripple Labs, Jed McCaleb, has actually had a big transaction reversed.

It’s always good to keep these things in mind when you’re thinking about Ripple. Are banks really that interested in the network and the token? Will the freezing of transactions lead to the downfall of Ripple? These questions can be answered with time and patience.

Ripple Can Be A Game Changer

We no longer have to trade sacks of corn for hand-made tools. Our system of exchanging goods and services has come a long way since the dawn of humanity. And some of the big changes have happened recently since the boom of the internet and other technologies.

The world of crypto is still a bit complex and mysterious to many. There are many big names out there such as Bitcoin and Ethereum. But there’s another up-and-coming member trying to change the way the financial system works. And this member is known as Ripple.

Ripple is more than just a cryptocurrency. RippleNet is a network itself, and Ripple’s XRP is the token involved with the transactions. Ripple works to find business solutions for many financial institutions and businesses alike. The idea is for quick and cost-efficient transactions.

Ripple is still fairly new, and it’s worth keeping an eye on the system and its token. Many banks have already started testing the advantages that can be provided by Ripple. So, what do you think of RippleNet and Ripple’s XRP token? We hope we’ve given you some good insight.

Rickie
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