What is ripple? (All you need to know)

What is ripple? (All you need to know)

What is ripple?

Ripple is a real-time gross settlement system (RTGS), currency exchange and remittance network using a common ledger that is managed by a network of independently validating servers that constantly compare transaction records.

Is ripple like Bitcoin?

In some ways yes, but there is a massive difference between ripple and Bitcoin.

1. Ripple is not a blockchain and does not require proof of work like Bitcoin.

2. Ripple is not mined, the company that founded ripple just picked a specific number (100 billion) and issued that many coins. The company has promised that this is the total amount of ripple coins that there will ever be.

3. Ripple’s token is called XRP.

 

What is ripple used for?

The ripple protocol (XRP) is meant to move large amounts of money in a short time period. The protocol also ensures that transaction fees will be very low, if you have been involved in currency exchange before, you will know that some currencies cannot directly be converted to another currency, hence the US dollar is usually used as a base currency to facilitate the exchange. This means that, for currency A to be converted to currency B, currency A has to be converted to it’s equivalent in the US dollar, before it is then converted to currency B. There is usually a double commission during this process, this makes currency exchange very expensive, Ripple intends to solve this by being the base currency, except this is more cheaper.

Ripple also intends to make international transactions faster, the ripple network’s average transaction time is 4 seconds, which when you compare it to bitcoin’s transaction time which stands at 1 hour or more and your average banking system which can take up to four days, ripple is lightning quick.

Ripple is able to handle 1,500 transactions per second. In comparison, Bitcoin can only handle 3 – 6 transactions per second, ethereum can only handle 15 transactions per second.

 

Should I invest in ripple?

Nobody can tell you exactly what it is all going to look like for ripple in the future, but we can make smart speculation, before you think of investing in ripple, you should know some of its problems.

1. It is centralized:

Lots of people do not classify ripple as a cryptocurrency, this is because of its centralized nature. Ripple unlike Bitcoin and the other popular cryptocurrencies is controlled by a company, this means that should the company decide to increase the amount of ripple tokens in existence, in theory, they can. This to many people goes against the main purpose of cryptocurrencies which means free from any one person’s or government control.

2. Competition:

Ripple faces stiff competition from stellar, and also big payment processing companies like visa, mastercard should they decide to get involved in blockchain technology.

 

Conclusion:

If more banks decide to adopt the ripple network as a means for their transactions, the higher the value of the XRP will be, as at the time of writing this article, ripple claims to have signed up at least a 100 banks.

This means that ripple are really working hard on getting more banks to use their network. If they succeed, the value of the XRP might really soar, so maybe it’s a good idea to buy some ripple coins.

 

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