What Is Ripple XRP Used For? How Does Ripple Work?

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Since it’s only third for Bitcoin and Ethereum, I would presume that you’ve heard about the coin Ripple. It is the third most expensive cryptocurrency with a record of $31.36 billion market capitalization. Yeah, right?

You wonder what Ripple is and why is it so popular? You do not need to look further, as I’ll cover this guide exactly.

I will send you a complete overview of how Ripple operates, what are its advantages and disadvantages and answering FAQs. You will also learn its safety features at the end of this guide — one of the most important aspects of all cryptocurrencies!

So, let’s start! Let’s start!

What is RippleNet?

RippleNet is the network of institutional payment providers, including banks and cash services companies, that use Ripple’s solutions to deliver frictionless money worldwide.

Let’s give an example: first, Mr. Jones is living in New York and does not need a chocolate box. He has a lot of interest in watching a baseball match, but he has no reservation. First, Ms. Smith lives in Los Angeles. She wants to give away a special stamp to a chocolate box. Eventually, we have Mr. Brown living in Alaska searching for a strange photo, and he’s a baseball game played in New York.

Such people probably would never meet each other in our current system and continue with their “not worthy” beliefs.

But they could say in Ripple universe, “Oh, I have candy, I want baseball,” and the machine would search for the shortest and cheapest combination.

Also, in any currency, including Bitcoin, the platform allows payments to be made with a minimum internal transaction fee of $0.00001, indeed, that is the right zero number.

What is XRP?

XRP is an alternative digital currency used to enable Ripple Network transactions. The code behind the cryptocurrency is called the XRP Ledger and functions as the ledger that houses the XRP coin. The directory is community-based, meaning that only users can decide whether or not it succeeds.

The virtual currency serves as a bridge and a source of liquidity between various fiat currencies. The first version of the cryptocurrency was created by web developer Ryan Fugger in 2004. Nevertheless, the protocol in its current form launched in 2012, and Ripple Labs came into being shortly after OpenCoin.

Developed as a currency to power the Ripple Network, XRP enables people to digitally send money. The cryptocurrency was developed as an update to Bitcoin to resolve problems related to the common digital coin with high transaction costs and slow transaction speeds. Compared with Bitcoin, XRP can process transactions in as little as 4 seconds. It can accommodate up to 1,500 transactions per second as well.

Ripple Labs helped develop XRP, producing 100 billion XRP tokens for the Ripple Network project to run and fuel. Although XRP and Ripple are the same people, they all operate independently. The fact that the network is open source and XRP can be bought means that the two are separate.

Ripple Labs has 60 billion XRP coins of 100 trillion originally produced. The rest of the coins are freely traded on the market. Although it is the main operator, Ripple uses only the XRP tokens in one of its items, xRapid. The platform was designed to provide the XRP token with a form of liquidity while serving as a cross-border payment bridge. The success of Ripple, the company, is in no way linked to the value of XRP in the currencies.

Who created Ripple (XRP)

The protocol was created in 2004 as a working prototype.

Though, the real story starts in 2013 when the EDonkey network’s founder, Jed McCaleb, invited several global investors to invest in Ripple Labs.

Who are Ripple Labs founders

Chris Larsen

Chris Larsen

Chris Larsen is an angel investor, business manager, and a privacy activist, recognized as the wealthiest in cryptocurrency. He is best known for being a co-founder of several start-ups, starting with an online mortgage lender E-loan in 1996.

Jed McCaleb

Jed McCaleb

Jed McCaleb is a successful programmer and businessman. He created many crypto-start-ups, including Ripple, Stellar, eDonkey, Overnet and a crypto-currency exchange Mt. Gox (he sold his stock and re-codified the site before the infamous hack), which mainly handled more than 70% of all Bitcoin transactions worldwide.

https://i.imgur.com/AzcmGcE.png

What Does Ripple (XRP) Aim to Achieve?

Technology has gone so far that things like self-driving cars have come true. Nonetheless, international payment transfers are one area that has not made much progress.

Two major problems impact international payment transfers:

1. They’re expensive

If you have experienced cross-border transfer, you will know the expensive fees. High-street banks are typically the worst for this, but even services like PayPal are high-making a foreign payment using PayPal costs about 2,9 percent.

https://i.imgur.com/bfdh8EI.png

Consumers lose money because currency conversion is also taking place.

2. They’re slow

Foreign transactions can take anywhere between days and weeks in the age of the internet. No explanation except the fact that financial institutions do not want to update their systems–a terrible excuse!

Financial institutions make a lot of money in this cycle and the consumer suffers. Ripple aims to change this and make transfers quickly and easily globally.

Ripple is the Web for the world’s banks and is called the “Internet of Value” term.

Since the launch of Ripple in 2012, it has worked to resolve this problem and has generated a lot of investment interest. Let’s look at Ripple XRP’s historical performance.

Ripple (XRP) Historical Performance

Ripple coin is one of the oldest, but it was not always so common. As you can see from the screenshot below, the price of Ripple began to increase only in April 2017.

In January 2017 Ripple coin traded at about $0.0066 and in January 2018 hit its highest ever level of $3.65. Could you guess the return percentage?

That’s right! That’s right! This is a return of 55,203%.

https://i.imgur.com/EmbgiLh.png

Like all other cryptocurrencies, Ripple coin also saw an enormous price crash in the first half of 2018. During the past 1 month, there has been a slight revival of its quality, but this is not so important.

Ripple continues to enjoy third place among the top 10 market capitalization cryptocurrencies. This is because of their experience in developing technology and establishing partnerships.

How Does Ripple Work?

RippleNet is a community of network validators-financial institutions reading-on the network which uses the network’s solutions to benefit from the above listed time and cost savings and to benefit from liquidity procurement. In the SWIFT network, messages are sent from one member bank to another, until they get there, whereby payment is carried out between the source and destination banks (SWIFT participates in the actual settlement of funds.) When the user wants to transfer money to someone else in another country, he or she essentially tells the bank,’ I’d like to transfer the amount ‘ X’ to the’ Y’ destination.’ Such information is transmitted to the destination bank at which point the XRP representation is translated to the local currency equivalent. Whilst source and destination gateways may not explicitly trust each other, intermediate gateways may support all parties as trusted recipients and senders. It is similar to the idea of mutual friends.

Nevertheless, unlike SWIFT, users can send both fiat and crypto funds. XRP may be the network native token, but a token can be used if it is authorized by payment gateways. XRP is the currency of the bridge.

What is Ripple used for?

  • Low currency exchange commission. Most currencies can not be converted to each other directly. Banks must, therefore, use the US dollar as a mediator. A double commission is available: currency A is converted to USD and currency B is converted to USD. Ripple is also a mediator, but far cheaper than USD.
  • Quick transactions internationally. The transaction time average is 4 seconds. Compare it for Bitcoin for hours or more and regular bank networks for a couple of days.
  • Ecosystem bill. Essentially, users can issue their currency for quick and cheap transactions. For example, a currency can be produced to buy vinyl or action figures between collectors and to see them.

What are Ripple’s benefits?

  • XRP has very short transaction times, it takes about 4 seconds for a transaction to be processed.
  • XRP has really low transaction fees currently under a penny of $0.004 (less than 1/2 a cent) per transaction.
  • Also, Ripple has agreements with more than 100 banks, including Bank of America, UBS, Standard Chartered, HSBC, JP Morgan, Santander, and American Express.
  • XRP blockchain adds transparency and protection of transactions by adding a public ledger to each transaction that can not be manipulated or modified.
  • There is no central failure because XRP transactions are peer-to-peer.

Why could XRP (Ripple) expand exponentially in the next few years?

XRP (Ripple) is currently the world’s third most expensive cryptocurrency, with a Ripple XRP increase of 35,000 percent throughout 2017.

For this year XRP’s growth surpassed Bitcoin and Ethereum. Also, Ripple already has over 100 different banks, including Barclays, JP Morgan and Bank of America.

Ripple is trying to get money sent and received from banks anywhere in the world at a very low cost, using its XRP cryptocurrency.

The major companies that will benefit will be banks (yes I know many crypto people hate banks, but we can’t be closed in mind.

Ripple will save banks a large amount of money in fees and since transactions take just a few seconds, it ensures that a great deal more transactions can be made.

The public ledger of Ripple also provides a security layer to transactions since the ledger has been built on the Ripple blockchain itself which can not be manipulated or changed in any way.

Ripple / XRP will have a lot of potential alongside civilian peer-to-peer transactions.

Ripple has also gained recognition from cash-enabled cryptocurrency exchanges, with London-based CEX and, for example, European exchange BitPanda already adding Ripple to its platforms.

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