Bitcoin always seems to take the spotlight away from all the other Cryptocurrencies. In 2021 people barely talk about the other Cryptocurrencies that exist, such as Ether, Ripple, Tether, Lite Coins, etc. These altcoins, too, possess all the potential that Bitcoins carry and are equally important.
So as a Crypto Investor, I thought it is about time we talked about Ripple, one of the most underrated Cryptocurrencies in the world.
As you are reading this article, chances are you too take a keen interest in Cryptocurrencies and want to find out more about Ripple (XRP). If that is indeed the case, you are going to have a nice time through this article; I will be telling you everything you need to know about XRP, from its origin to its uses and the difference between Ripple and Bitcoin.
So without wasting any further time, let us get started with Ripple (XRP)
XRP, more popularly known as Ripple was founded by Chris Larsen and Jed McCaleb in 2012. XRP is a Cryptocurrency as well as a payment network for Crypto transactions.
It is one of the rarely used Cryptocurrencies. The reason why you probably have not heard much about Ripple is that it is mostly used as a payment protocol rather than a Cryptocurrency.
Ripple is actually more famous for its open-source peer-to-peer decentralized platform. It allows smooth transaction of money in all forms; it does not have to be just Cryptocurrencies; it can be the normal US dollar, Japanese Yen, etc. In simple words, the Ripple Network acts as a middleman between the sender and the receiver. One of the most important things that are required by the Ripple Network is trust.
Ripple’s Cryptocurrency – XRP
XRP is the currency made by Ripple. XRP is one of the least favorite Cryptocurrencies. It is because Ripple is not just a Cryptocurrency, but it acts as a bridge between currencies.
Fiat Currencies and Cryptocurrencies both work as the same in front of Ripple. Ripple offers different gateways to their Cryptocurrency. There are many gateway options that you can choose from there are CADbluzelle, USDSnapSwap, etc.
How Does Ripple Work?
In order to understand exactly how Ripple Works, you have to read this example properly. Take two people, Jack and Mike. Jack has offered some service to Mike. Now the only valid payment mode available to Jack is Bitcoins, so Mike owes some Bitcoins to Jack.
Suppose Mike does not have Bitcoins. He can use the Ripple platform to send the money, and it will automatically be converted to Bitcoin. Mike can send the money in normal USD, and Jack will receive the money in Bitcoin. Multiple gateways are used to initiate such transactions.
The way Ripple works are quite unlike the conventional banking system. There is always an element of risk since a large amount of money is stuck at the payment gateway. The gateway has to honor the IOU, or the whole money of the user stuck at the gateway can be lost.
Ripple Explained In Detail
Now that you know the basics of how Ripple works, it is time for you to get a glimpse of how Ripple works in detail. I would suggest you read this part very carefully. Ripple does not work like other Cryptocurrencies work; it doesn’t have proof of work and proof of stake.
It works on consensus protocol; whenever a transaction takes place, it is verified by all the active users available on the network. There is a facility of Consensus spending that checks and avoids double-spending. It actually improves the integrity of the system.
Take, for example, a Ripple user who has $50 if the Ripple user wants to send the same $50 through multiple gateways. When any Ripple user initiates a transaction through multiple gateways, the first transaction gets deleted, then a consensus is conducted, and polls are made. The results of the pole come in less than 5 seconds.
Ripple is very authentic since it keeps track of all the IOU in a given currency. All the information related to all the financial transactions is available on the Ripple Consensus ledger.
The data is publicly available on the Blockchain network, but that does not mean it is interfering with your privacy. No ID is linked with any transaction detail, so you need not worry about your identity. Now let us briefly take a look at the difference between Bitcoin and XRP.
Ripple vs Bitcoin
There are many differences between Ripple and Bitcoins.
Speed and Cost of Transaction
Ripple is a payment network. The average speed of transaction for Ripple is 5 seconds; the transaction is very fast in the Ripple network. The cost is very low, and it is very little to no processing fee.
On the other hand, Bitcoin is a decentralized Cryptocurrency that is used for making transactions. Transaction time takes up to 10 minutes in Bitcoins.
Mining Cap (Supply)
The mining cap for bitcoin has been set to 21 million. After Bitcoin reaches its mining limit, the rewards for Bitcoin mining will be no more.
Things work a little differently when it comes to the entire supply of XRP is 100 Billion. Currently, there are 45 million XRP in circulation.
The technology used for these two Cryptocurrencies is quite different from each other. Bitcoin works on Blockchain technology which works on the principle of a distributed public ledger, whereas Ripple uses a consensus ledger. Ripple Network uses a number of validators to validate the transaction.
There you have it; now you have all the nitty-gritty of Ripple (XRP). I do hope that this article has provided you some insights about Ripple(XRP). Ripple is a very resourceful platform for transactions; it is not as famous as Cryptocurrency.
It is, in fact, the seventh most popular Cryptocurrency in the world, with a market capital value of $20,247,427,036. It is not as volatile as Bitcoin and can serve as a good substitute.