what is ripple cryptocurrency and how does ripple work
Bitcoins are feasible currencies that have the capability to remain for a longer time as they are now used by most businesses and marketing agencies. These are the easiest ways of transferring the value irrespective of the distance and any centralized authorities.
Along with the bitcoins, many alternate coins have emerged. Bitcoins already got supreme importance followed by Etherum cryptocurrency. The third cryptocurrency that has gained the importance is Ripple cryptocurrency.
So, what is Ripple?
Ripple is a digital processing system also known as XRP. You might be familiar by now that bitcoins are processed by a ledger technology called Blockchain and are mined through a process called mining. On the contrast, ripple is owned by a company. It is released in 2012 and is a real-time gross settlement system ( RTGS).
Ripple makes it easier for banks for quicker and convenient transactions. It is a network of payment providers such as banks. It owns about 60 billion XRP and 55 billion in an escrow account. Of these over one billion XRP are sold per month. Its fast transaction rates will help the large financial company to easily transfer the money.
What is ripple cryptocurrency?
XRP is said to be the digital asset of Ripple representing the transfer of value across the network. It settles a payment within 4 sec completing 1500 transaction per 1 second. It is an open source ledger that it aims to offer affordable cross payment. Ripple is used for liquid transactions. This feature of Ripple is very uncommon from the other cryptocurrencies.
Do you need to mine Ripple?
Bitcoins are generated by mining which requires high energy and is on the expensive end. Whereas there are about 100 million pre-existing XRP. Ripple has a supply of 39 billion XRP. You Purchase it in exchange with the cryptocurrency. This is a means to save a lot of money from spending on mining rugs.
Wondering, how the transactions are verified without a blockchain?
Yes, For this you need to know about the Ripple protocol consensus algorithm(RPCA)
- Ripple protocol consensus is a patented technology of ripple to verify the transactions made. “Consensus” ensures that every node is in agreement with each other creating no issue. The transactions are made public displays as a list known as “Candidate list”
- Each server then integrates with the candidate sets and initiates accuracy on of the transactions
- To complete the consensus it requires 80% of servers’ UNL(Unique Node List which is a set of servers that determines consensus) agreeing on transactions. When the transactions meet its requirements the ledger is closed.
Benefits of Ripple
- It is a regular payment system
- Quicker, convenient and cheaper transactions
- No multiple regulations and checks
- Exchange with any currency or valuable things (gold)
- Long term stability
- Low volatility
- No special formalities required to get into ripple
- Whole coin ownership
Uses
- Low commission currency exchange
- Acts as a mediator for currency exchange
- Quicker international transactions which will take less than 4 sec
- Can use the native currency for the exchange
Do Ripple wallets exist as bitcoin Wallets?
Yes, they do and resemble the bitcoin wallets. They are secured with the keys which allow safer transactions. These require a minimum deposit of 20XRP.
There are other cryptocurrency wallets like software wallets and mobile wallets that are compatible with both Android devices and iOS. Unlike bitcoin hardware wallets, you can also store your Ripple on Hardware wallet. This offline storing is the secured way of saving the contents.
A hardware wallet is manufactured with the ripple ledger called Ledger Nano S that supports the storage of ripple.
Worth of a Ripple
They were at 115/ $1 and now the price has been reached to 1000/ $1
How is Ripple different from Bitcoins
| Bitcoins | Ripple |
|---|---|
| High transaction speed Increased Volatility Risk-orientedYou may not get the expected bitcoins after a long transactionDecentralized Nothing is owned by the centralized authorities Created a brand new financial system |
Low transaction speed Decreased Volatility Low riskThe transaction takes place in 4 sec with the expected value Associated with the banks selling its servicesXRP is owned by banks Assists existing financial system in upgrading the capabilities |
Want to purchase Ripple currency?
Here’s how you can do it.
It’s not as easy as buying a Bitcoin.
- Unlike a cryptocurrency exchange for a bitstam, Exchange an XRP for other currency
- To sell a ripple you can either exchange it for a cryptocurrency or an ethereum
- You will need an account and a ripple wallet to exchange the currencies
- Initiates the transfer and the other receives it within 4sec
Conclusion
Ripple is trusted by many banks as the fraud rate is very less. This is because the ripple is pre-existing currencies which are difficult for any alterations to be made. This acts as a medium of exchange for the transactions with lower costs. The more banks use it for transactions the more will be the XRP rate. If banks decide to use the ripple for any currency exchange. It will drive the fruitful results in the future for who have invested in ripple.
