Ripple is one of the most common cryptocurrencies in the market. Maybe after Bitcoin and Ethereum, it is one of the Cryptocurrencies that people talk about much. Now if you know what is XRP and you just want to exchange Ripple to PayPal or other Crypto or e-currencies, you’re in the right place, just you need to go the homepage and make that happen. But if you don’t know this Cryptocurrency that well and are wondering about what is Ripple, and why is it so popular? You do not need to open another browser tab. stay right here and continue reading as we are going to discuss everything about Ripple (XRP) in this guide.
What is Ripple?
Ripple is a peer-to-peer decentralized network that provides financial institutions with a digital payment protocol. If you want to send traditional funds in dollars or cryptocurrencies like bitcoin, Ripple makes seamless digital money transfer. This network offers its own token called XRP and is the sixth-largest cryptocurrency by market capital at the moment of updating this article. The fact that all XRP tokens are pre-mined is one of the interesting features of XRP; stay tuned to read more about this subject.
Driven by a server network, RippleNet is an open-source platform designed to allow inexpensive and fast financial transactions. The XRP token highlights a value transfer over RippleNet. It serves as an exchange mediator that enables users to purchase and sell both fiat and cryptocurrencies.
So, Ripple is different from both Bitcoin and Ethereum. While Ethereum is a forum for creating smart contracts, and Bitcoin is just a digital currency, Ripple is a modern payment infrastructure dedicated to international financial transactions.
How Does Ripple Work?
Ripple does not depend on blockchain technology, unlike other cryptocurrencies. As mentioned earlier, XRP coins are not mined, and proof of work or proof of stake protocol does not exist in this technology. It has developed and patented a proprietary technology called the Ripple Protocol Consensus Algorithm (RPCA) for processing and verifying transactions. It implies that all nodes on the network should agree unanimously to validate a transaction. This is one of the reasons why XRP transactions are relatively cheaper and use less power compared to Bitcoin.
It relies on a medium called Gateway, which acts as a link of trust for each party, to ensure smooth transactions between two parties. The same medium often sends and receives all types of currency using RippleNet to public addresses. A gateway can be signed up and initiated by both corporations and individuals to allow them to serve as a middleman to complete the transaction. In fact, XRP coins act as a bridge currency without any prejudice against digital or fiat currencies.
The average transaction verification time on the network takes less than 5 seconds and the system is built to be decentralized, despite not having a blockchain. The payment system is not controlled by any central department or authority.
Ripple vs. Bitcoin, Which one is better?
Earlier in this post, we talked about a substantial difference between Ripple and Bitcoin; that Ripple is a payment infrastructure while Bitcoin is just a digital currency. Below we can focus more on the differences between these two systems.
There are some notable ways in which Ripple sells itself, especially in terms of transaction speed. How long a transaction will take is one of the more noteworthy concerns about Bitcoin. With bitcoin’s intense uncertainty, it poses the possibility that you will not get the amount of BTC you expected when you first initiated it when the transaction is finalized. But with Ripple that is much less of a concern, while long transaction times takes up to 4 seconds. With hi.exchange you will get the exact Bitcoin amount you started with transferred to you in your desired currency.
Bitcoin is completely decentralized, as it was made for the purpose of facilitating financial transactions without the need for a bank-like third party. Ripple, on the other hand, offers its services to banks and financial institutions in the literal sense. The network is much more centralized, with much of the XRP being operated by the company.
In terms of coming under the big umbrella of “cryptocurrencies,” the purposes of both Ripple and Bitcoin could not be farther apart. Bitcoin was developed in the hopes of fully creating a whole new financial system. Ripple aims to support existing financial networks and upgrade their capacities for global transactions by developing its digital token to assist with asset transfers.
XRP: Ripple’s Digital Currency
XRP, the digital currency, serves as a currency bridge to other currencies. It does not differentiate between one fiat/cryptocurrency and another, thus making it easy to swap any currency for another. There is a gateway for each currency in the ecosystem, e.g. BTCbitstamp, CADBluzelle, and USDsnapswap. XRP, is reportedly able to settle a payment within 4 seconds and manage 1,500 transactions per second.
Although Ripple has differed in a variety of ways from other cryptocurrencies, one way it remains similar is that a finite amount of XRP is generated, and that is all there will be. There is 100 billion in the case of XRP, 60% of which is owned by Ripple.
Since Ripple owns so much XRP and is not actually used as a currency, some have alleged that it should be considered a bond . However, the CEO of Ripple said that he thinks it should not be, as it serves a practical function, and owning XRP does not mean owning a portion of the Ripple business.
How to Buy Ripple?
Buying Ripple is not yet as easily as it is buying Bitcoins or other cryptocurrencies. Some cryptocurrency exchanges will allow you to exchange USD for XRP, but that is rarely the case. However, with hi.exchange, you can exchange your Ripples to PayPal, Perfect Money, or Webmoney with the lowest commission and without any KYC requirement.
In order to purchase XRP, exchanges selling Ripple will need you to trade a different cryptocurrency like Bitcoin or Ether. You will need a Ripple wallet where you will receive your XRP, regardless of the currency you are exchanging for XRP.
What’s a Ripple Wallet?
If you want to securely store your XRP, you can use a wallet to ensure that coins are protected from any possible compromise. Some of the wallets that are best include: Ledger Nano S (Hardware wallet), Guarda (Desktop, web and mobile wallet), Edge Wallet (Mobile wallet), Toast Wallet (Desktop and mobile wallet), Gatehub (Web wallet).
How are Ripple Fees and Expenses
One of XRP’s essential benefits is its low transaction cost, which remains constant for the most part. At the time of writing this, the average transaction cost is $0.0002, which is incredibly inexpensive, especially given the fact that foreign payments are made possible by the network. The fee will bump up to $0.0004 if the network has a lot of traffic, which is still almost zero. Even the highest transaction fee reported by the network during the July 2019 upsurge was just less than 5 cents.
Remember that this is the expense of the transaction on the Ripple network. If you choose to buy, sell, or exchange Ripple through trading platforms or exchanges of cryptocurrencies, you can be charged with additional fees and commissions. Generally, with any sale and purchase, these services take a cut, although you still have to pay for the withdrawal costs. These fees, commissions, and charges are not set and rely on several variables, including the amount of XRP you exchange, location, structure of pricing, and more.
With hi.exchange, we offer you lowest commission fees on the market for your Ripple exchange processes, without any KYC needed.
Lastly, keep in mind that Ripple is a cryptocurrency that focuses on addressing cross-border money transfer issues. Many major banks and financial institutions are already using this.
When it comes to Ripple, the main problem is centralization. Fortunately, Ripple Labs has begun the decentralization of Ripple by taking action.
Let us know what do you think about Ripple and if you think XRP is going to prove more valuable as any other cryptocurrency, especially Bitcoin.
Image Credits: Freepik