Ripple is a cryptocurrency, real-time gross payment and remittance settlements system, and currency exchange service all at the same time. It was created by Ripple Lab Inc.’s co-founder Jed McCaleb in 2012. Like Bitcoin and Ethereum, Ripple aims to digitize traditional fiat currency-based transactions with its native token XRP.
The beneficiaries of Ripple are financial institutions, such as banks and payment services providers. These companies utilize the RippleNet network to make instant and frictionless cross-border transactions using the On-Demand Liquidity (ODL) service since Ripple interferes with the transactions made using its token or the RippleNet network.
Unlike blockchain, RippleNet is a peer-to-peer payment system hosting a network of validating servers. The servers consist of trusted banks and institutional payment facilitators known as gateways. These gateways rely on the Ripple transaction protocol to facilitate international financial transactions and currency exchanges.
The technology that powers Ripple for verifying transactions is known as the Ripple protocol consensus algorithm. Every transaction taking place through RippleNet is stored on a distributed ledger. The ledger ensures that transactions are based on consensus and are transparent.
Ripple’s currency: XRP
XRP is the native digital asset or token used for the transfer of assets across RippleNet. Compared to other digital assets, XRP transactions are quicker, cost-effective, sustainable, and scalable, thanks to the XRP Ledger’s open-source and permissionless blockchain technology. Because of its groundbreaking technology, XRP has been widely adopted by more than 100 financial institutions—it is no surprise that XRP enjoys the fourth spot after Bitcoin, Ethereum, and Tether in the list of cryptocurrencies with the highest market capitalization.
XRP is used as an alternative to traditional payment systems, such as the Society for Worldwide Interbank Financial Telecommunications (SWIFT). Gateways use XRP for sourcing liquidity in cross-border transactions. In return, they benefit from lower exchange fees, reduced operational costs, and instant settlements. XRP’s primary role is to serve as a bridge between two currencies and settle transactions in approximately 3-5 seconds.
Do Ripple and Bitcoin have anything in common?
Bitcoin and Ripple are poles apart in their design, features, and purpose—but they are similar in a few ways:
- They’re both listed on major crypto exchanges. , respectively.
- Both facilitate peer-to-peer online transactions.
- Ripple and Bitcoin are speculative investments.
- XRP and BTC transactions are secured via cryptographic keys or hashes.
- Both use consensus algorithms to verify transactions over their network.
- Both cryptocurrencies have a fixed supply.
- They have gained traction in the traditional financial markets.
- Ripple and Bitcoin are in the top four biggest cryptocurrencies in terms of market capitalization.
- Both facilitate instant, secure, and low-cost transactions.
The best books on Ripple
There are plenty of resources available that can provide a better understanding of what Ripple and XRP are and how they work. Below is a list of recommended readings (in no particular order) that we hope you will find helpful.
- Ripple and XRP for Beginners: The Guide to the XRP-Coin and the Blockchain Technology by Roman Alexander.
- Ripple: The Ultimate Guide to the World of Ripple XRP, Ripple Investing, Ripple Coin, Ripple Cryptocurrency, Cryptocurrency by Ikuya Takashima.
- RIPPLE XRP: The Virtual Opportunity by Michael Redcar.
- Ripple: The Ultimate Beginner’s Guide for Understanding Ripple Currency And What You Need to Know (Beginner, Mining, Step by Step, Trading, Basics, XRP, Cryptocurrency) by Elliott Branson.
- Cryptocurrency: The Ultimate Guide to Understanding XRP Ripple by Jared Snyder.
- Discover the full potential of Ripple & XRP: Advantages – Vision – Investing – Community by Arndt Podzus.
- Ripple Cryptocurrency Report: How XRP Is Changing the World of Financial Transactions and Why You Should Invest Now (Altcoins, Cryptoassets, Cryptocurrency) by June Sato.
Can you mine Ripple?
Ripple comes with a pre-mined supply of 100 billion XRP. Ripple Labs holds about 60 percent of total XRP in escrows and keeps releasing 1 billion XRP every month to prevent crashing of prices. Out of 100 billion XRP, 50 billion is in circulation at the moment.
Technically, one can purchase Ripple by joining RippleNet only. Consider mining other cryptocurrencies such as Bitcoin or Ethereum and then convert them to Ripple using a cryptocurrency trading platform.
Wallets for storing XRP
XRP holders need a wallet to store, manage, and use their XRP. Ripple wallets require users to pay 20 XRP. With that said, there are several Ripple wallets available to be used on mobile, desktop, online, or as hardware or paper.
1. Mobile Wallets
- Atomic Wallet
- Abra Wallet
- Toast Wallet
2. Desktop Wallets
- Atomic Wallet
3. Online Wallets
4. Hardware Wallets
- Ledger Nano S
- Ledger Nano X
5. Paper Wallets
Ripple aspires to become the next-generation global payment processor. Instead of relying on third-party software like conventional international payment networks, Ripple uses RippleNet to create an ecosystem of financial institutions, resulting in swift and cheaper cross-border payments. For that reason, more and more banks are adopting Ripple and joining RippleNet.
XRP can be used for transferring fiat currencies, cryptocurrencies, and commodities. Even though mining Ripple can be difficult, it’s possible to obtain it via RippleNet or other trading platforms and manage it through wallets. However, if interested in buying Ripple, then first check on XRP Price Prediction 2021 to know what further price changes can occur, and according to this, you can easily decide the right time for investment in it.