Ripple is a technology that is both a cryptocurrency and a digital payment network used globally for financial transactions. For better comprehension, Ripple can be described as a money transfer platform that is created to assist the demands of the financial services industry in today’s world. Just like all other cryptocurrencies, Ripple has a native token called XRP. At present, this token is listed among the top 10 best cryptocurrencies by market capitalization.
Ripple – Definition
Ripple is the firm that is behind the development of XRP. Also, it is a payment settlement network and currency exchange like this review of Binance that processes transactions internationally.
Ripple works as a trusted intermediary between two parties in a transaction as this network can quickly verify that the exchange went through properly. Ripple platform offers exchange opportunities for multiple fiat currencies and crypto assets including Bitcoin, Ethereum, and many others. To make a transaction over Ripple’s network, a small fraction of XRP is deducted as a gas fee.
All transactions made through XRP are dully trustless, quick, and cheap and facilitate cross-border money settlements. Ripple XRP was launched in 2012 with the most go-getting goals in the entire crypto world.
Let’s see how XRP is different from Bitcoin Blockchain. Bitcoin blockchain lets everyone contribute computing power, authenticate transactions, and secure the software it is using. On the contrary to this, XRP Ledger only allows selective network members to assist in the authentication of transactions and securing of the network. There are around 150 participants in the XRP network that are known as the Unique Node List.
Is XRP Decentralized?
When XRP was launched, almost 100 billion tokens were pre-mined and consequently circulated to specific people, firms, and members through various gifts, rewards, and giveaways. At that time, this move gave rise to new concerns about its decentralization as few entities regulated a huge supply of coins.
In whatever ways Ripple participates in the market, it depends on a for-profit company known as Ripple which works as the key player in the XRP ecosystem.
Ripple Company maintains the XRP Ledger and performs a pivotal role in the development and progress, at the same time being a primary XRP token holder.
In a nutshell, the Ripple network is decentralized but owned and regulated by a private firm, Ripple.
How Ripple Advantages Us?
Ripple has several benefits for those who particularly want to make cross-border transactions. Other than this, there is a list of perks Ripple gives us. Below are a few of them.
Quick Settlements
When you make a transaction over the Ripple platform, the confirmation comes in quickly within a matter of seconds. Comparing it with the time banks take to complete a single wire transfer or the hours it takes for Bitcoin transactions to be verified.
Very Fewer Charges
The charges to complete a transaction on the Ripple Network are almost equal to zero, 0.00001 XRP. This is a very small fraction of a penny at present prices and rates.
Wide Varieties
Ripple is a very versatile exchange platform. It not only deals with transactions using XRP but also deals with other fiat currencies and crypto assets.
Huge Exposure
Huge firms and large companies use Ripple as a transaction platform. Santander and Bank of America are a few examples of this showing how Ripple is flourishing all around the world.
Issues Faced Due to Ripple
Though Ripple proved to be a revolutionizing creation for the world, there are still some issues that are bugging investors and users.
Centralized or Decentralized?
The main reason for cryptocurrency’s popularity was its decentralization, that there was no intermediary or controlling authority like the traditional financial systems. The Ripple system is somewhat centralized as it is owned by a company and has a built-in list of validators, which goes against the concept of decentralization.
Huge Pre-Mined Supply of XRP
The remaining supply of the Ripple is stored in escrow, but due to pre-mining, Ripple’s value might get affected.
SEC Issue
In the year 2020 in December, the SEC filed a complaint against Ripple, declaring that they have the authority to decide the release of XRP. As a result, the company denied all allegations.
Bottom Line
XRP Ripple can be a good investment, but for now, it is a gamble and faint-hearted people should stay away as much as possible. Make sure to purchase Ripple with the money you can afford to lose.
