Ripple

Solution for moving your money from one corner of the world to the other.

What is it?

The technology was introduced to the world in 2012 when Ripple was co-founded by Chris Larsen and Jed McCaleb. Ripple acts in two ways. First it acts as a cryptocurrency, which you can find and buy on many exchanges. Next it works as a digital payment network for financial transactions.

Token — XRP

As I mentioned before, the token, which you can find on internet exchanges, is called XRP. Today the XRP is seated at the seventh place according to its market cap. The tokens are already pre-mined. The amount of the tokens is 100 billions XRP with 47,1 billions XRP now circulating. As I said, it works as a cryptocurrency and as a payment network and the purpose of XRP is to act as some sort of a middle man mechanism of exchange between two currencies or networks.

Technology

As many others networks, the Ripple runs on an open-source and peer-to-peer decentralized platform. This allows seamless transfer of money and it does not care which currency you are transferring, if it is euro, yen, Litecoin or BTC. Unlike other cryptocurrencies, Ripple is using consensus protocol (the XRP Ledger Consensus Protocol), which makes transactions rely on in order to validate account balances and transactions on the system. The consensus works to make the integrity of your system protected against double-spending.

Advantages

This section needs no introduction so, lets start. Fast transactions. In case of Ripple it takes only around four to five seconds, to complete a transaction, compared to the minutes or potentially hours it takes for Bitcoin transactions to be verified. Very low fees. The cost to complete a transaction on the Ripple network is just 0.0001 XRP. This represents very small fraction of a penny at current rates. Network. The network can process not only transactions with XRP, but it can also be used for other fiat currencies and cryptocurrencies. As I said before this network is used by large financial institutions. This demonstrates that it already has a large potential and institutional market adoption.

Disadvantages

In comparison with other cryptocurrencies, XRP is somewhat centralized. That is because of its default list of validators. The large amount of XRP is pre-mined. Almost half of tokens is in circulation, but more than 50% of tokens is still stored. That could have an impact in the future on XRP’s value. In 2020 the SEC filled a lawsuit against Ripple. The reason for this is, that they are unhappy with a fact that the network can release the tokens whenever they want to. So, the SEC wants them to be registered as a security. This could slow down the adoption, until it is resolved.

Thank you for reading.