Ripple is the world’s third most popular cryptocurrency with a market capitalization that once exceeded $129 billion USD. Now, the cryptocurrency has reduced to .44 USD. Furthermore, it now holds the power to provide the highest long-term returns to investors.
Along with the popularity of the cryptocurrency, there are many confusions within the Ripple space that may come as a surprise to newcomers. With that in mind, we have combined the list of three things that you should know about Ripple.
Ripple, a two sided currency
At its core, Ripple has many differences as compared to popular cryptocurrencies like Bitcoin or LiteCoin. Ripple consists of two parallel developments: a transfer network called RippleNet and a cryptocurrency named XRP.
The Ripple Network helps to connect banks and other financial institutions in making payments and transfers much quicker than the old SWIFT Network.
The SWIFT Network can be viewed as an increasingly outdated method for making international transfers. Which help make cryptocurrencies such as Bitcoin and Ripple that much more attractive as future prospects.
Designed to handle no less than 1500 transfers per second, the network moves more quickly than any other means of transferring value for long distances.
The Future is Trade
Ripple has many functionalities that give it an edge over competing cryptocurrencies. Ripple’s main product is xCurrent, which does not use XRP at the moment. xCurrent has several salient features:
- Facilitating banks and financial institutions. It is made to help banks in transacting between one another.
- A bridge between currencies. It seeks to provide similarity between all currencies, fiat and cryptocurrencies included. This will help override the current norms, which need foreign exchange conversions and overseas bank transfers for most cross-border trades.
- Fast and cheap cross-border trades. Building on the last two-point, transactions through Ripple are faster and cheaper than past methods. For example, a person in Mexico needs to make a payment for goods bought from a person in the USA. At present, this needs a transfer of funds to a bank in the USA or the availability of dollars in a bank account at home. This needs expensive money transfers. With Ripple, this process is avoided through the use of a common transfer protocol.
xTrade, another product of the Ripple network, enables the use of XRP within this network; making the network more efficient and user-friendly.
New enough to be used by most banks
Despite its popularity, Ripple’s use by any big bank to date is still due. There are many issues that critics highlight which are actively slowing Ripple’s fast adoption:
- Any major changes are likely to offset or disturb the procedures and databases established over decades. Adopting the Ripple Network, therefore, will require a significant parallel effort over several fronts.
- Lessening transaction times is not a top priority of banks. The cost-effectiveness of any nascent technology as well as it’s working with other systems’ employed by banks remains crucial forsmooth functioning. Until this network shows cross-functionality and shows major uptake by banks across the world, it is unlikely to see formal introduction within the banking sector.
- Banks are unlikely to adopt XRP until they are sure that it is a good currency whose value does not move too much; the market correction in early 2018, XRP prices are still considered to be high.
Ripple is unique amongst major cryptocurrencies due to it’s focused purpose and goal. It’s success is largely dependent on how fast it is able to use it’s inherent advantages by replacing the previous SWIFT protocol. It’s in all those currencies that are used internationally and makes the payment method much easier.