Marc Serafino
Ripple is very different from most cryptocurrencies such as Bitcoin and Ethereum — it has a clear purpose and does not aim to replace regular, fiat currencies. Ripple’s coin is marked as XRP, and it isn’t as valuable as bitcoin or an ether coin. Nevertheless, it shows clear signs of growth and we think it has a solid future. To prove that, we have prepared the list of 10 things you should know about Ripple. Let’s dive in, shall we?
1. Ripple is also a payment protocol
It is not just a cryptocurrency; rather Ripple is a real-time gross settlement system (RTGS), currency exchange and remittance network. The Ripple Transaction Protocol (RTXP) or just the Ripple protocol, is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples). It is made to enable “secure, instant and nearly free global financial transactions of any size with no chargebacks.”
2. Ripple is specifically designed for financial institutions and payment providers
Unlike most other cryptocurrencies, Ripple has a clear purpose — it is specifically designed for financial institutions and payment providers. In contrast, Bitcoin is meant to store value and be used for general transaction. Ethereum and Lisk are similar to Bitcoin in that sense although their platforms support running of third-party apps which are not limited to any specific industry.
3. Ripple does NOT aim to replace fiat currencies
Quite the contrary, Ripple is meant to act as a bridge between government-backed fiat currencies, to help transfer value across borders quickly and efficiently. Instead of requiring entities from two different countries to pre-fund a foreign account or go through a foreign bank, Ripple enables local banks and payment providers to offer instant, on-demand payments. With no account pre-funding or foreign exchange fees, XRP makes for a faster, cheaper settlement. Speaking of which…
4. Ripple makes cross-border payments faster, cheaper and more reliable
Generally speaking, it takes about 3-5 days to send money from one country to another through a bank, involving high fees and the risk of the payment being delayed. Worse yet, some businesses may be forced to pre-fund nostro accounts in the recipient’s country, which ties up capital. Ripple hopes to fix these shortcomings, with an average settlement time of 4 seconds, at a fraction of the cost.
5. Ripple is faster and more scalable than Bitcoin
Since Ripple is all about transactions, it is only natural that it excels in that category. What’s more, it is designed to be able to handle the amount of transactions Visa handles — that’s 2,000 transactions per second, on average. In sharp contrast, we have Bitcoin that can process up to seven transactions per second, any of which can take more than two hours to clear. This, according to the “Ripple people,” proves that Bitcoin does not have the scalability to meet typical customer demands.
6. Ripple is secure
Again, Ripple is designed for financial institutions and it is only obvious that security has been put at the forefront of its development. The XRP Ledger, where XRP transactions occur and are recorded, is an open-source code base that is supported by a community of trusted validators and a team of full-time engineers that actively develops and maintains the ledger.
7. Ripple is NOT mined
Unlike Bitcoin, Ethereum and most other cryptocurrencies, XRP is not a mined digital asset and every single unit of the currency that exists now has already been created, with most owned by Ripple (55 billion of which are held in escrow) and the rest held by companies and individuals. This makes Ripple more sustainable as it doesn’t have to use the computing power and electricity for creation of new coins.
8. Many banks are already using Ripple
The Ripple protocol has been increasingly adopted by banks and payment networks as settlement infrastructure technology. Among those that are either already using or testing Ripple are such banks as UniCredit, UBS, Santander, MUFG, BBVA, SEB, Akbank, Axis Bank, SBI Remit, Cambridge Global Payments, Star One Credit Union, National Australia Bank, National Bank of Abu Dhabi, Canadian Imperial Bank of Commerce, Mitsubishi UFJ Financial Group, Shanghai Huarui Bank, and many others.
9. Ripple performed extremely well during the first half of 2017
At the moment of writing of this article, Ripple is the third most prominent cryptocurrency in terms of market capitalization with a great first half of the year (2017) behind it. Ten additional financial institutions have been added to Ripple’s global network, while XRP was up 1159% at the end of the second quarter (Q-o-Q). Also, at the end of the period, XRP was trading on in 30 exchanges.
10. You can buy XRP at most major exchanges
As noted in the point above, you can now buy XRP in 30 exchanges. Unlike Bitcoin, you don’t need a small fortune to get a single coin — rather you can buy a few Ripple coins for one dollar (as of mid-2017). So, you can start with pocket change and perhaps — if it works for you — build from there.
Whether you decide to invest in Ripple (buy XPR coins) is totally up to you. We think it has a bright future, but we cannot provide an investment advice and cannot be held responsible if something goes wrong. Think it, rethink it and make a move (or not). 😉
