Ripple Crypto-Currency: A Complete Guide

What is Ripple, and what is Ripple's crypto currency than XRP is different from bitcoin, what are the pros and cons of this platform and how to buy its tokens.

What is Ripple?

Ripple - a global system of mutual settlements, which allows you to transfer almost any currency to anywhere in the world in seconds. Compared to Ripple, traditional methods of money transfers through SWIFT or Western Union seem outdated. At the moment, Ripple is fully focused on working with banks, offering them a more efficient and economical way of making remittances in real time around the world.

Let's consider an example. Translate currency from Japan to Nicaragua (JPY / NIO) is almost impossible, therefore individuals and banks usually have to exchange JPY for USD, and then USD for NIO. At each stage, you need to pay a commission, and as a result, money transfer becomes quite expensive.

Using Ripple, you can exchange JPY for XRP (internal platform currency, "ripple"), send XRP to the recipient - either to an individual who has a Ripple wallet, or a bank in Nicaragua - which then exchanges XRP for NIO. Although the essence of the process remains the same, the commissions at each stage are much lower. In other words:

XRP is an intermediary currency that allows you to easily exchange any other currencies on the Ripple platform.

While banks as a whole are in no hurry to accept Ripple, but there is no doubt that the future is behind payments in real time. The Ripple platform provides banks with a huge advantage both in competition and financially.

Ripple is focused on the principle of "Internet values" - this means that in the technological era, money transfers must be made at the same speed as information exchange. With Ripple, you do not have to pay a fortune and wait a few days before your money reaches the recipient, even if it is on the other side of the world.

Why do banks use Ripple?

Several banks already now enjoy the benefits of Ripple, including Santander, Axis Bank, Yes Bank, Westpac, Union Credit, NBAD and UBS. According to Ripple, thanks to the platform banks can save an average of $ 3.76 on each transaction. Given that banks carry out thousands or even millions of transactions per year, this is a very significant saving.

If something can attract the attention of banks, it is a technology that simultaneously allows you to earn more and save more. That's why Ripple - an inexpensive global network of calculations in real time - is waiting for a brilliant future. The company offers financial institutions a new way of doing business, which will allow them to keep up with the demands of the times.

Ripple is headed by Brad Garlinghouse, but the technology side of the business is handled by David Schwartz, chief cryptographer. The Ripple team is constantly improving its algorithms and looking for an approach to banks at the international level.

The company, based in San Francisco, employs the best specialists from around the world and strives to simplify remittances between any countries and organizations. Ripple can rightly be called one of the most interesting finteh companies; Forbes even includes it in its Fintech 50 rating.

What does the Ripple course depend on?

Large investors can invest in Ripple directly, but for most, only one option is available - investments in XRP, domestic currency Ripple. This year, XRP has risen sharply - from less than $ 0.01 to more than $ 0.3 per token.

Such a sharp surge is explained by the growing popularity of the platform among both banks and speculators. Ripple currently ranks third in the market for crypto currency after bitcoin (Bitcoin) and ether (ETH / USD), according to Coinmarketcap.

In a sense, XRP serves as a reserve currency on the Ripple platform, which allows users to exchange almost any currency on XRP to transfer electronic money to anywhere in the world. Then the recipient can exchange XRP for any currency of his choice.

Every time some currency is exchanged for XRP and vice versa, Ripple's liquidity increases due to the growing demand - like the cost of XRP. According to the idea of

the creators, sooner or later the XRP should turn into a global reserve currency, although it is still far away.

However, the translation of XRP is the simplest and least expensive way of making money transfers using the Ripple protocol. At some point it may turn out that the most reasonable decision is not to translate XRP into some other currency, but simply use them as the main means of settlement. If private users and banks around the world decide to use XRP and do not exchange it back for fiat money, the value of the crypto currency will undoubtedly begin to grow rapidly.

To banks accepted XRP, it should become a stable currency with relatively low volatility. Right now, many banks do not want to deal with XRP, because the cost of crypto currency can change dramatically. To mediate these risks, Ripple has already begun to cooperate with BitGo, so you can expect that the XRP positions in the banking environment will continue to strengthen.

How to invest in Ripple?

Long-term growth in the value of XRP is the main goal and strategy of Ripple, as the company owns most of the released tokens. This means that the investment in XRP is in essence little different from investing in the company itself.

It should be noted that Ripple also offers consulting services to financial institutions and has no problems with attracting investments, so it can be called an appropriate object for long-term investments.

How many XRPs exist in the world?

Total issued 100 billion XRP tokens, with Ripple owning 61 billion. To win the trust of investors, Ripple has blocked 55 billion owned by XRP through 55 smart contracts, one for each billion tokens. Each month, one of the contracts expires, releasing the corresponding amount.

Over the last year and a half, the company spends about 300 million XRP per month to cover operating expenses. Such operational transparency should convince skeptical investors that Ripple does not plan to drift away from the market, selling its reserves and thus destroying the cost of XRP.

What are the advantages of Ripple?

The main advantage of XRP in comparison with other crypto-currencies, of course, is that Ripple works directly with banks. Some principled investors will not want to invest in Ripple from the reluctance to maintain a banking monopoly, but they are clearly in the minority. From the point of view of business, Ripple has definitely made a reasonable decision by establishing links with those corporations that control global finance.

Most likely, investors will be able to earn at a constant increase in value, simply by making a long-term investment in XRP. Simply put, a good solution is to buy XRP and forget about it: in the long term, the value of your assets can grow by tens or even hundreds of times.

Ripple works amazingly fast - the transaction confirmation takes less than four seconds. In other words, the platform can be used for daily purchases - of course, if it gets enough distribution.

In addition, Ripple boasts good scalability: the system regularly processes up to 1000 transactions per second. It has been shown that, with the same success, it is capable of processing more than 50,000 transactions per second - as much as Visa.

What are the advantages of Ripple compared to bitcoin?

Bitcoin is an excellent crypto currency, but, unlike Ripple, it is not really a fast and convenient way to calculate. In addition, the cost of transactions in the bitcoin system has grown significantly, and the transmission of XRP is still inexpensive; Moreover, it is known that Ripple will not "get bogged down" in a large number of transactions, as it happens with bitcoin.

Ripple's original goal was to develop a platform that would not consume as much power as mining bitcoins. To completely abandon the mining, all 100 billion XRP tokens were issued in advance.

Many criticize Ripple for centralization, but the company does its best to change the situation. The platform is becoming more decentralized due to the variety of node-validators. The company's management claims that already now its system is more decentralized than bitcoin.

One of the greatest advantages, at least from the investor's point of view, is that Ripple establishes ties with banks around the world, while many consider bitcoin and other crypto-currencies to be partisan with the established financial order. In other words, banks are more likely to support Ripple and XRP, not bitcoin.

What are the disadvantages of Ripple?

Since Ripple was originally claimed as a system that would allow ordinary people to make money transfers around the world, the focus of the company exclusively on banks is a lot of criticism.

However, if you like the platform itself, but do not like the company, you can use Stellar, the Ripple fork from Jed McCaleb, based on more altruistic principles.

As mentioned earlier, all XRP tokens were released at once, and Ripple owns most of these tokens. Despite the fact that now these funds are blocked and the probability of selling is not high, this problem still worries many. In a sense, Ripple is the central bank of XRP.

Researchers at Purdue University have determined that the Ripple platform has some vulnerabilities: because of the open nature of the network, its nodes can be attacked, which prevents some users from accessing their means.

Many people may decide not to invest in XRP for personal reasons - especially if they invest in crypto-currencies to avoid banking and state control. On the other hand, investors who are eager for profit and do not see anything wrong with Ripple's business model have every reason to buy XRP.