Guide
Understanding Ripple
Ripple is a real-time gross settlement system, remittance network, and currency exchange. Unlike Bitcoin, Ripple doesn’t rely on Proof-Of-Work. The common ledger is managed by a network of independently validating servers which continuously compare transaction records.
The Ripple Protocol enables the direct transfer of money between two parties. It can exchange any type of currency from traditional fiat currencies. Ripple claims to reduce the fees and transaction time when compared to traditional banking, which is why many payment providers are adopting the technology. Since its release, Ripple can process more than 35 million transactions. Ripple can handle 1,500 transactions per second, which have been updated to scale to Visa levels of 50,000 transactions per second. In comparison to Ripple, Bitcoin can only handle 3-6 transactions per second, and Ethereum can handle 15 transactions per second.
Another thing to note here is that XRP, which is a Ripple’s native token, cannot be mined like Ethereum, Bitcoin, Litecoin, and other cryptocurrencies.
There are 100 billion XRP tokens issued by Ripple, and the company promises that this is the total number of XRPs that will ever be. Ripple positions XRP as a tool that is fungible with any type of currency. Ripple can settle a payment in 3.5 seconds through XRP and make it available and spendable.
How aggressively is it going?
Ripple aims to expand its offerings and focus on becoming the best Blockchain-based protocol for fiat transfers. It can perform its function in a much better way than the SWIFT network, which it seeks to replace. However, the company and the XRP coin are at the crossroad where competition is significant.
Last year, Santander Bank announced that it would be expanding its use of Ripple’s xCurrent network in the western hemisphere. Investors are pleased when XRP token is on the news. However, xCurrent doesn’t use XRP, and most of the progress is made by the platform, which is related to Ripple Labs, which manages the token and is independent of the token adoption and its use.
Many believe that if Ripple Labs is progressing, so will XRP, which is not necessarily true. With the progression of Ripple, there are myriad of regulatory issues that it has to navigate. Considering the remarkable volatility of the crypto market, Ripple’s ability to make its position is impressive. It’s too early to predict the success of Ripple.
However, it has successfully demonstrated to banks that it is a better choice when it comes to money transfer. With the new players already in the market, it now depends on the future to show what the fate of Ripple holds.
