Ripple is a growing concept and term in the area of cryptocurrencies. Many experts joke that it has created a ‘ripple effect’ in terms of the traction that it has gained in recent years owing to the brilliant performance and fast growth not only as a cryptocurrency but also as an overall digital payment network. Founded in 2012, the main purpose of this network was to act as a payment settlement and asset exchange system. Overall, it was quite similar to SWIFT – the international money transfer portal. Ripple soon became the top contender for cross-border transfers even among larger business institutions owing to the fast speed and negligible transaction fee. Even in India, the businesses and institutes slowly began giving it a thought to adopt the ripple network as all they would have to do is convert the value of XRP to INR and the payment would be initiated in a matter of seconds.
Here are a few key highlights associated with Ripple that you can be aware of for the purpose of knowledge, education, and also for investment.
- The digital currency – The token associated with ripple is XRP which acts as a bridge for other currencies. This means that there is no discrimination between fiat and cryptocurrencies that makes exchanging it easier.
- The working – It does not run on the traditional Proof-of-Stake or Proof-of-Work mechanism. Instead, the transactions are based on a different consensus protocol that helps to validate the account balances and every transaction on the system. This consensus also takes into account the preservation of the integrity of the system by restricting double-spending.
- The purpose – The need and importance of keeping free-flowing money are recognized by ripple and the overall purpose is to help the banks and other institutions fasten the transfer of funds with lesser transfer fees or delays in processing. Of course, the overall value of XRP would not be much compared to the value of BTC to INR but the holistic purpose of Ripple as a network and mechanism is what makes it different from every other cryptocurrency currently in circulation.
- The utility – Originally, XRP was designed for financial institutions. Understanding the utility and purpose of the coin would help you gain an insight into how it is distinguished from the others. The uniqueness of this coin lies in its original designation towards the needs of larger financial institutes, businesses, and payment services. Any party using the Ripple network would be able to easily transfer funds using XRP without a high foreign exchange fee.
- The advantages – There are several major advantages of this network. Arguably, the biggest one would be the use of XRP in cross-border payments. This is due to the extremely low transaction fees and super-fast transfer rates. The transfer fee is approximately less than a penny which makes it affordable for anyone. Moreover, the estimated transaction time is a mere 5 seconds which is another added benefit.
- The backing – Ripple is currently partnered with 300+ financial companies and large-scale institutions. These companies are placed in over 40 countries. This backing and support from renowned and popularly-used companies like American Express, TransferGo, Bank of America, etc have boosted the value and also the confidence among laypeople and investors.
- The security – The whole purpose of cryptocurrencies would be defeated if they weren’t secure. Ripple, therefore, has ensured the maximum level of safety and security of its users. The ledger wherein all the transactions are stored is an open-source-based one that is supported by millions of users worldwide. An expert team of engineers spends time actively developing and maintaining the ledger.
Ripple has only emerged into existence in 2012, and since then, its growth has been phenomenal. Many call XRP to be the ‘future’ due to the support from bigshots and industrialists. Purchase and invest in XRP to be a part of its magnificent growth.