Ripple XRP is a cryptocurrency which was launched in 2012. Ever since its inception, it grew to become one of the world’s largest cryptocurrencies which offers fast, affordable and reliable cross-border payments.
Both XRP as well as the XRP Ledger are used by the US technology Ripple which stands behind these solutions and develops a range of additional projects with the main goal of transforming the global payment industry.
As a San Francisco based company, Ripple’s team counts more than 300 employees, led by Brad Garlinghouse who is the company’s CEO. The main aim of this cryptocurrency is to create a technology which will distribute a global settlement network for more efficient transactions between the world’s financial institutions.
The platform behind Ripple is designed to allow users to transfer money from any currency to any other currency in a matter of seconds – literally anywhere in the world. This ambitious goal has made Ripple (XRP) a direct opponent to the older and established systems like SWIFT.
It is very important to note that the term “Ripple” is being used interchangeably – to describe both the cryptocurrency behind Ripple (XRP) as well as the company and the technology that it represents.
Therefore, to clarify:
RippleNet is the network of payment providers around the world (providers which use Ripple). This network serves as a main connection point for banks, payment providers, digital asset exchanges and corporate entities. It is designed to accept both fiat and cryptocurrencies.
The term “Ripple” is commonly used to describe the XRP cryptocurrency. As we said above, this is in fact incorrect.
While Ripple is the American company that develops these payment solutions, XRP is its independent digital asset that carries out the transactions. XRP can be bought at exchanges while Ripple is a company which is associated to XRP, RippleNet and other solutions.
If you are asking yourself how the token XRP works, it basically represents a new revolution of sending money. In times when there are many ways to send money from one location in the world to another which are outdated and slow, XRP streamlines a lot of things.
Instead of directly competing with banks, XRP has a unique plan to partner with financial providers around the world and offer a similar blockchain-based solution. As the company advertises, the benefits for financial institutions is the ability for them to process their customers’ payments anywhere in the world instantly, reliably and cost-effectively.
Let’s give an example on a XRP payment (transfer).
A bank named ‘Bank A’ in the United States wants to send money to a bank named ‘Bank B’ in Pakistan. Now, rather than converting USD dollars to Pakistani rupee and battling the exchange rate margins and processing fees while facing slow transaction tames, it can use XRP to send money digitally and through the Ripple’s wallets that both banks (in this case) have. Later on, the money would be converted to the local currency.
The speed of this transaction would be around four seconds and the minimum transaction cost in cases like these will be 0.00001 XRP. When it comes to capacity, the Ripple network is capable of handling more than 1,500 transactions per second.
The XRP blockchain works differently when compared to Bitcoin, Ethereum and most others. Because of this, it has often been seen as being not truly decentralized. In fact, the point of decentralization is primarily to ensure that it is impossible to interfere with the network just like it is impossible to block or reverse transactions or trying to trick the network.
XRP Ledger, however, is a fast solution compared to Bitcoin and other public blockchains. The main reason for that are its trusted nodes (they come in a faster set) which do the heavy lifting.
Since it is a company which aims to innovate the money-sending business, Ripple must have partnerships in order to survive. The good news is that Ripple is a partner to many companies including the CIMB Group (ASEAN’s fifth largest bank), PNC Financial Services (top ten bank in the US), Santander (Spanish bank), IndusInd (India), Unibanco (Brazil), Moneygram (popular payment service) and many other financial institutions around the world.
The biggest obstacle for Ripple in its mission to dominate the world is the adoption of XRP (as cryptocurrency) by banks and financial institutions in the world. This is why the focus is set on people and why many believe that by purchasing XRP, they would contribute to Ripple in its quest for global domination.
Its direct competitor is SWIFT, which has more than 11,000 companies and financial institutions in its own network. Obviously, it is hard to rival a payment solution like this but the bottom line is that Ripple is a major player in the crypto world and its focus is to bridge the gap between the traditional banking industry and the new age of digital currencies.
For more news on Ripple XRP, make sure to check out our coming altcoin news!
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