New Listing on CODEX: XRP Token
XRP token, formerly Ripple, was created with an idea to improve transaction speed, reduce costs and increase liquidity across the whole banking industry. Curious about XRP? Learn more about Ripple technology in this article.
Ripple’s Technology and Technical Aspects
Considering the fact, that the current banking system is running on an old technology initially created by SWIFT, it possesses complex bottlenecks when it comes to transaction settlement. For the last couple of decades, it still takes from 3–5 business days to settle a single bank transfer, which is caused by the legacy messaging system used across all banks globally. Moreover, on average banks take 2% fees out of each transaction, which creates enormous overheads that should be covered by individuals and corporations.
Ripple aims to resolve these problems by implementing a technology which is based on the blockchain principles. They want to make all payments instant and pre-validated, source the liquidity on-demand unlocking more than $5 trillion in global liquidity, eliminate a 4% payment failure rate, and reduce global $1.6 trillion annual costs for payments down to almost zero.
At the same time, their technology can’t be fully considered as Blockchain. Since Ripple maintains a Unique Node List (UNL), there’s a number of trusted nodes deployed solely by Ripple that preserve the integrity of the network and process all payments. The UNL imposes network rules, and if someone deploys his node, it won’t work in tandem with trusted nodes. That means, technology is more centralized, rather than decentralized.
What Solutions Does Ripple Offer
Currently, Ripple has 3 solutions intended for banks, SMEs, corporations, and payment providers that fix described problems: xCurrent, xRapid and xVia. We’ll talk more about the first two solutions because the third one works as one standard payment interface that allows avoiding numerous payment networks integrations, which were customly designed by hundreds of banks during their existence.
RippleNet by itself can be used without the XRP token, mainly because banks need a new messaging system which comes in the form of the xCurrent solution, that can replace SWIFT. This product easily resolves problems associated with transaction speeds, payment failures, immense transaction costs, but it doesn’t fix low liquidity. And that’s where xRapid comes into play.
Breaking down the xRapid solution we can find that it uses the XRP token as the liquidity provider, which eliminates the need of banks to have nostro-accounts scattered all across the world. Nostro-accounts are simply one’s bank accounts that keep a foreign currency at another bank in order to provide sufficient liquidity levels when it comes to international money transfers where foreign-to-local currency exchange is involved.
Which means if banks don’t store money in nostro-accounts, then trillions of dollars are released and replaced by XRP token that works as the universal liquidity provider for all financial institutions. Thereby, if banks want their currency exchanges to be liquid they have to use the XRP. That’s the value proposition that Ripple boosts into the market.
Price And Capitalization of XRP Token:
The current XRP market cap is $13,239,875,898 and the trading volume is $797,971,69 ( 195,827 BTC) at the moment of writing this material. It is ranked 3rd on Coinmarketcap. The current price of the XRP is $0.317762.
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