Understanding the Allure of Ripple XRP
Just as is the case with Ethereum, the name of a technology platform and the cryptocurrency it supports often get mixed up. So let’s start with uncluttering the name and figuring out which is the technology and which is the cryptocurrency.
Although Ripple is a distributed ledger system, it is NOT a blockchain technology. Blockchain depends on mining either through a proof of work or proof of stake system to validate transactions. Ripple, however, depends on a distributed ledger system run by a network of separate servers which draw comparisons between transaction records and reach a consensus.
Despite the difference in operating procedures, the motivation behind Ripple and blockchain technologies still remain the same. And that is the facilitation of quick and seamless transfer of funds between parties without the need for a centralized controlling system. Ripple also provides the blockchain advantage of lower transaction fees, in fact, it does this perhaps better than the more popular cryptocurrencies.
Beyond just facilitating transactions between users, Ripple goes a step ahead and allows various financial institutions to carry out transfers amongst themselves. In actual fact, the Ripple protocol was initially designed for transfer between finance institutions. The launch of the XRP cryptocurrency only came a while after.
Considering the fact that various transactions are carried out on the Ripple platform,the XRP is used to mediate exchanges on the Ripple platform. What this means is that if you want to make payments between two currencies, the transaction currency is converted to XRP, and sent, and on the other end, the XRP is then converted back to the second currency’s equivalent amount.
Thumbs Up to XRP
Ripple is a very flexible platform that accommodates a lot of businesses and financial institution. If you’ve provided a service to someone or a company, you can request for payment in Ripples XRP rather than the regular fiat currency. This will be especially advantageous to you if you’re a frequent user of the ripple platform. Having a good amount of Ripple XRP in your account means you always have something left over to cover any emergency transaction fees should they come up.
From all indications, the Ripple platform is being rapidly adopted by so many traditional finance institutions with many more indicating interest as well.
In fact, Ripple went as far as launching an iOS app back in 2014 that enabled iphone owners to make transactions right from their mobiles. Although the app has since gone under, it goes on to show how useful and permeating the platform is in the financial world. It is therefore a good idea to make transactions on the platform, own XRP tokens, and generally be involved in the scheme of the technology as it evolves.
We’ve all seen the disruptive potential of cryptocurrencies and the distributed ledger system and everyone can agree that the smartest thing to do is to jump on the bandwagon. Although care must be taken to ensure that investment funds are not lost in so-called “shitcoins”, Ripple XRP looks safe enough to bet on.
With its level of penetration into the banking and finance industry, Ripple XRP is definitely the cryptocurrency of the future and some units are worth stashing away for the halcyon days.