Ripple coin is a real-time gross settlement system (RTGS), a currency exchange and a remittance network. It was launched in 2012. Ripple Coin (XRP) is the native currency of the platform. Contrary to popular belief that the sole purpose of a cryptocurrency is to cut off intermediaries, in 2013 Ripple was the first to think of taking the blockchain to the enterprise.
It’s important to note that Ripple is a platform that makes use of a currency. The platform is an open-source protocol that is designed to allow fast and cheap transactions.
More on this will be discussed in the later paragraphs.
What is Ripple Coin (XRP)?
XRP is the token that is used to transfer value on the Ripple Network. Its main function is to be the mediator for both crypto and fiat currencies. Think of it like a joker, the card that can play any other card.
If for example, one wants to exchange Euros to Japanese yen, XRP can be euro to euros and Yen to Yens, and this minimizes the transaction cost. These type of transactions usually cost Ripple $0.00001.
An amount that disappears from the platform and can’t be replaced. It’s a tactic that is put in place to prevent spammers. Also, it means the world gets $0.00001 poorer with every transaction.
Nevertheless, there is a huge miss consumption between Ripple and XRP. This we will also treat at the end of this post but for ease of understanding, Ripple and XRP will be interchangeably used.
People that created Ripple
Even though Ripple the platform was launched in 2012, its working prototype has been in place since 2004. In 2013 Jed McCaleb invited investors to invest in Ripple Labs.
McCaleb is a well-known entrepreneur and programmer. He is responsible for cofounding several crypto startups including Ripple, eDonkey, Stellar, Overnet as well as the Mt. Gox crypto exchange. In the case of the latter, he sold his share way before the infamous hack.
Larsen is considered to be the wealthiest man in cryptocurrency. He is an angel investor, a privacy activist, and a business executive. He is well known for co-founding many startups in the field of online financial services.
The Ripple protocol
Ripple coin (XRP) is unique from other cryptocurrencies because it lacks a blockchain. Instead, the platform has its own patented technology that goes by the name; The Ripple protocol consensus algorithm (RPCA). It works well as long as all nodes are in agreement.
Ripple Coin as an investment
XRP is the third largest cryptocurrency with a market cap of $19,414,716,305. On the positive side of things, the parent company has the trust of many banks. As more financial services companies use it to transact, the higher the value of Ripple Coin will go. However, it’s important to note that no investment is always 100 percent safe.
On the negative side, it’s highly centralized, which goes against the underlying principle of cryptocurrencies. It means that Ripple developers can decide when and how main coins they can or can’t release. It’s also open source, and when the code is accessible to everyone, there is a chance someone may try to hack it, and they could succeed.
Benefits of using Ripple Coin
It’s designed to be used in day to day payments systems, and this makes the Ripple coin more convenient than BTC. As a result, its transactions are cheaper and quicker.
Ripple coin also has the ability to be exchanged to any currency or valuable at low fees. More importantly, the platform has an organization that works closely with regulators to ensure XRP is usable by financial service providers.
A move that exempts it from being keenly scrutinized by regulators like other cryptocurrencies. It is for this reason that Ripple coin is a favorite cryptocurrency for many who want to invest in cryptocurrencies but fear sanctions from the government.
Use cases of Ripple coin
Ripple Coin can be used to conduct low commission currency exchange. Currently, there are fiat currencies that can’t be directly exchanged for each other. The USD acts as a mediator in these cases, but the problem is that its commissions are quite high. XRP can also serve as a mediator but a much cheaper one.
Also, XRP offers fast international transactions. The average transaction time is only 4 seconds. Making it lightning fast compared to an hour or so Bitcoin takes and days that the regular banking system takes.
On its future, some experts believe 2019 could be the year when Ripple Coin and its platform takes off. Roman Guelfi-Gibbs, the CEO of Pinnacle Brilliance Systems Inc. believes next year may see more projects that are coded in the XRP and ETH algorithm. A move that will see Ripple outshine the others.
Biggest misconception between Ripple and XRP
What many, including people who have invested in the token, still get this wrong. Ripple and XRP are two different products/services. XRP is the token is the cryptocurrency which we have been referring to as Ripple coin in this post.
Ripple, on the other hand, is a software company that uses one XRP as one of its solutions. Ripple officials, though hold a very large position of XRP tokens has distanced themselves from the company.
However, many believe they are distancing themselves to avoid the SEC considering XRP, a security. More on the difference between Ripple and XRP can be read here.