Cryptocurrency or as often known as Crypto, virtual or digital money, is nothing but a form of online currency which can be used to make payments that can also be used to exchange goods and services over the internet. Cryptocurrencies have a decentralized layout which helps them in working outside of government jurisdictions and thus having negligible government control. Also, it is worth noting that cryptocurrencies online uses cryptography to keep them secure for users which thus makes it next to impossible to counterfeit or double-spend for that matter.
This digital asset has been praised for some of its characteristics including portability, clarity in operations, resistance in inflation that it provides, and more but it is very crucial to understand that there are two sides to every coin and so does your virtual money. Along with being praised for its upsides, it has also been harshly condemned for some of its downsides as well which include its vulnerability, rapidly fluctuating rates, and most importantly the fact that it can be used for some activities which are against the law, this is something which cannot be overlooked by critics when making a judgment.
In addition to this, cryptocurrency can be held by owners in their online wallets for having to use them in case of buying or selling some goods and services online. Not just that, this digital asset uses a technology commonly known as blockchains which are used across several computer networks in order for it to record and verify every transaction made.
Having said that, by now you might have understood, why cryptocurrencies managed to seek a lot of attention from potential investors over the years. It is vital for you to know, there are quite a few virtual currencies that are available today in the marketplace in which you can invest including Cardano, Ethereum, Baby Dogecoin, Binance coin, XRP, and Dogecoin to name just a few popular ones.
I think you might have gotten a fair understanding of crypto by now and so, let us move forward to a cryptocurrency which of all the digital assets on the market, still continues to turn heads of potential investors, XRP.
What is XRP(Ripple)?
Today there are multiple options for investors looking for expanding their portfolios and experimenting with newer currencies on the crypto marketplace, which offers a different approach to the entire concept of virtual currencies. If so, Ripple’s XRP is the one for them. For many of you who are wondering what is Ripple? Let me help you with that. Ripple is the company that is behind the cryptocurrency XRP.
XRP is known to be a technology known for its digital payment protocol and networks, which is also the reason why XRP payment systems are often seen to be used in banks.
Having a lot of cryptocurrencies available, Ripple is definitely not the company you will want to overlook. Ripple was founded in 2012 and being the third-largest cryptocurrency on the planet based on market capitalization, sells exchange platforms and currency settlements in the marketplace. The digital currency is the domestic token on RippleNet. However, RippleNet is just merely a payment system operated by Ripple Labs, built over the XRP Ledger, being an open-source blockchain technology that is completely decentralized.
XRP has proved to settle transactions at speeds previously unseen by any of the traditional payment sectors. Ripple having to work on a peer-to-peer transactions system, users enjoy really low fees being charged, to as low as an average fee of 0.0003403 dollars, while its major competitors like VISA charges a fee which is nearly a thousand times higher if compared. It is being often said that the whole idea behind Ripple is much older than even the cryptocurrency ecosystem.
From the world outside the crypto industry, investing in virtual currencies often seems to be limited to just Bitcoin, it is one of the most popular and leading cryptocurrencies in the market but, XRP is no less. Bitcoin transactions have higher costs and may take up to several minutes for users to get confirmations of their transactions, while XRP transactions take up a little cost and provide users with confirmations within seconds of their transactions. XRP being a currency transfer tool and not a medium of exchange uses a blockchain technology that can easily process transactions which can process up to 215 times faster transactions when compared to the industry-leading Bitcoin, along with that, it is capable of eliminating mining as the only way possible to acquire such results.
In order for you to understand better, built on an XRP ledger, Ripple is a cryptographic virtual currency. The XRP ledger has over a hundred and fifty validators around the world while it uses a decentralized structure of governance. Not just that, the cost and speed of the transactions which is offered is surprisingly fast and cheap, as there is no central authority having control. Moreover, The XRP ledger supports RippleX and RippleNet as both are platforms’ most popular products.
In addition to this, XRP cryptocurrency is popular among many big financial institutions including American Express along with Santander as the token can remarkably facilitate the cross-border payments these institutions have to offer. XRP based on how it is designed allows users to swiftly transfer any fiat currency into another within no time, thus allowing huge financial institutions to move funds and transfer money from one currency to the other in just a matter of few seconds. As a matter of fact, XRP is capable of settling payments in just 4 seconds while processing fifteen hundred transactions each second. With all of this, you will not be surprised to know that financial institutions using Ripple don’t have to deal with cryptocurrencies having astonishingly slow transaction speeds like in the case of Bitcoin.
For Ripple to increase the speed of cross-border payment transfers and as a result significantly improve the already existing global payment system, the blockchain that the currency uses, RippleNet, just requires twenty-five independent nodes managed by several tech companies, and financial institutions along with Ripple itself, for all to see eye to eye on the actual state of the public ledger of XRP, thus validating its transactions. So, XRP being much faster than others is mainly because, instead of having millions of miners all over the world validating its transactions, XRP just requires twenty-five nodes to do it all.
How does XRP work?
The cryptocurrency, XRP, usually acts as a bridge between one currency to the other as it does not discriminate between fiat/digital currency making the entire process, much easier. Ripple is known to be a virtual asset that derives its strength using blockchain technology, just like many other cryptocurrencies in the market. As most of you are already aware about, many blockchain platforms often tend to obtain their consensus with the help of either Proof of Stake (PoS) or using the Proof of Work(PoW) mechanism. Proof of Stake system being faster and cheaper if compared to the Proof of Work mechanism which is the other way around.
However, XRP Ledger on the other hand uses a completely different form of consensus, known as the Ripple Protocol Consensus Algorithm(RPCA). Some of you might be wondering as to what is consensus? Let me make it easier for you, Consensus is basically how correctness and agreements are maintained among the nodes in a blockchain network.
Ripple has received nearly seven years of stability because of the consensus system they are using, enabling the developers to expand the product range of its ecosystem as a result.
Investing in XRP
Seeing all the virtual currencies available in the market, XRP still manages to turn the heads of potential investors. The cryptocurrency’s value increased from 0.00634 dollars in January 2017 to nearly 3.60 dollars at the beginning of next year, being January 2018, resulting in an overall increase of even more than a recorded 59000 percent. Due to its holdings of XRP, Ripple has now become the most valuable startup venture in the United States, after WeWork, Uber, and Airbnb. Although we saw that Ripple did quite well but lately we have got to see the downward price trend it has with an all-time daily low of 0.12 dollars on march 13, 2020. However, cryptocurrency prices often fluctuate and as of May 20, 2021, XRP price could be seen close to 1.18 dollars.
Unlike Bitcoin, XRP is not a virtual asset that is mined so, all the units that exist today of the currency are already developed with most of them owned by Ripple itself and others held by individuals and companies.
XRP mainly presents two major reasons for why it is worth investing in. Today it has a broad appeal in the mainstream and it is still growing. RippleNet is one of those projects which has completely shaken the global payment systems and not just that, more is expected to come in the near future. The possibility of the increasing price of XRP in the coming future should provide potential investors with a good enough reason to invest in Ripple today.
Furthermore, another reason for the digital assets value is that it legitimately solves the problems that businesses and many individuals have faced for many years. While businesses want speedy transactions, regular customers want the cheap cost of transactions and that is exactly what XRP provides them with. If the world continues to shift towards digital payments, there is no doubt then that Ripple will play a crucial role in international payments.
If by now you are wondering, how to buy XRP? It actually depends on who you are. If in case you are a financial institution, it is best for you to directly contact Ripple but on the other hand, if you are an individual investor looking to invest in XRP, you can do that by just using any cryptocurrency exchanges which have XRP listed on their platforms such as Kraken, GateHub, and Bitstamp to name a few. Having said that, it is also important for you to know that XRP has been de-listed from many of the well-known exchanges including Coinbase, BinanceUS, Crypto.com, and many more. Also, it is difficult to buy XRP in the US because of the very same reason.
Recently XRP prices rose by nearly eight percent and was trading at 1.123621 dollars, which is nearly about 10.14 percent, last Friday, being the largest one day gain in percentage since August.
In conclusion, reading so far, you now might have a fair understanding of XRP and you will be able to decide if you should invest in Ripple or not. It is very crucial for you to understand the fact that XRP like any other virtual currency has its own risks and you should only invest in it if you are willing to take those risks and bear losses if at all necessary.
What are your thoughts on XRP? Do let us know in the comments below. To know more about various cryptocurrencies, do check out other articles we have on our website. Thank you for your time & if you found our content informative, do share it with your investor friends!
Also read: Cardano: Everything you need to know