Ripple is a blockchain-based platform that allows users to transfer digital assets among one another.
XRP is the asset developed by Ripple and functions similarly to Bitcoin — but with improvements. Some of the core features of this native token include:
- Fast transfers
- Low cost
- Low energy
The network is intended to support banks and other larger monetary institutions. However, individuals can pursue investment in XRP.
As the popularity of Ripple and XRP grows, there are opportunities for individuals to invest in them. Play-to-earn (P2E) games, such as crypto casinos, and even games, such as Plinko 3, use cryptocurrency to make transactions safer and easier.
Ripple has a complex history and continues to develop itself. Due to its benefits, XRP could transform the world of cryptocurrencies for the better. It is to gamers’ advantage to better understand this network and how it could affect the future.
The History of Ripple
Inspired by Bitcoin, the creators of Ripple wanted to establish a digital currency that would not require mining. The mining aspect of Bitcoin is crucial to maintaining its value; however, it is not environmentally friendly.
As a result, Ripple’s founders first launched XRP Ledger in 2012. The network underwent a couple of reworkings, holding the names Company NewCoin and OpenCoin before officially becoming Ripple.
Network developers provided 80 billion tokens to Ripple after the launch of XRP Ledger. This contribution would help transform the platform into what it is today.
Additionally, in 2020, the nonprofit XRPL Foundation provided funds to enhance the platform, improving its infrastructure and overall development. Today, Ripple has grown into a digital network that offers assets that transfer safely and more efficiently.
How It Works
The major difference between Ripple’s XRP and Bitcoin is that XRP does not require mining to give it value. Instead, XRP operates based on the Ripple Protocol Consensus Algorithm (RPCA). This validates each transaction and does so within a matter of seconds.
Transaction confirmation that complies with the RPCA allows the payment to be recorded into the blockchain. There must be at least 80 percent agreement across the authorizing nodes. If there is more than 20 percent agreement of flaws, the transfer is not successful.
Although Ripple approves transactions using the RPCA, there is no singular authorizing entity. Therefore, the network is decentralized. It does not adhere to one central body of regulations or limitations.
The Functionality of XRP
Ripple created its form of currency as an alternative to the Society for Worldwide Interbank Financial Telecommunications (SWIFT). This system allows for the easy, safe, and accurate transaction of bank information across country borders.
The main difference between the two platforms is that Ripple is faster than SWIFT in completing transactions. SWIFT still operates with a larger clientele but is conscious of the effectiveness of Ripple and XRP.
Both platforms challenge each other to improve their services and make international bank exchanges quicker and more cost-effective.
How Ripple Can Transform Payment Transactions
An attractive component of Ripple is that it does not need a mediator. Two parties can transfer the XRP funds between each other almost instantly and with little cost. As a result, businesses can streamline their transactions and save money.
Additionally, since Ripple operates using the blockchain, there is heightened security. Business names and other information are not necessarily recorded when the transaction is validated. However, the blockchain could remove this invisibility if needed.
How Does Ripple Compare to Bitcoin?
Bitcoin is the most popular cryptocurrency in the world. The name is practically interchangeable with crypto — even if it is not completely accurate. Still, BTC is the top dog of the industry, but Ripple gives it a run for its money.
Essentially, Bitcoin operates on the blockchain just as Ripple’s XRP does. Both cryptocurrencies are subject to the same security sanctions. This also means that XRP can experience similar pitfalls regarding the protection and preservation of assets. Nevertheless, there is always the opportunity for improvements in the future.
Both cryptocurrencies are decentralized and do not adhere to one main authority institution. However, Ripple uses a consensus system to verify the authenticity of transactions.
When an exchange is requested, a series of participating nodes determine the validity of the transaction. If more than 80 percent verify it, then the transaction becomes successful.
Due to this system, Ripple is much faster than Bitcoin. It makes transactions — even across the world — much simpler and safer.
Additionally, XRP differs from Bitcoin in that it does not need proof of work. Bitcoin requires that it be mined, which takes a lot of time and energy. Using the RPCA, XRP helps prevent conspicuous transactions, such as double-spending.
What Does Ripple Mean for the Future?
Ripple’s XRP improves on several components that Bitcoin lacks. It also compares competitively to SWIFT, making worldwide transactions quicker. However, many experts are identifying Ripple and XRP as a force in cryptocurrency that is going to revolutionize the industry.
A significant component of Ripple is that it is more efficient than Bitcoin. BTC cryptocurrency has a more complex method of verifying transactions since the system needs to authenticate the proof-of-work.
This is a step that Ripple removes, making verification take less than one minute. Additionally, there is a smaller cost to verify each transaction.
In the most general sense, Ripple is fast and cost-effective. When improving business or making enhancements to industry, these are the most important components to implement. As such, Ripple is not the most popular system for crypto, but it serves as competition to other cryptocurrencies that may seek similar improvements.
The Bottom Line
Ripple is a cryptocurrency system that allows users, particularly financial institutions, to make transactions with another user in a separate country. When competing with an organization such as SWIFT, Ripple must have unique and appealing selling points to make it a top competitor in the crypto world.
Therefore, the system is fast and cost-effective. Its unique cryptocurrency, XRP, is ranked as one of the most used cryptocurrencies. There is some conflict that the platform must address with the SEC, but if successful, it could become a household name in finances.
