What is Ripple Cryptocurrency and How Does Ripple Work

by anne jane in Blockchain on 6th December 2018

After Bitcoin has proved itself as a potential currency, other cryptocurrencies have evolved raising to make their way to dethrone it. Among the top two cryptocurrencies (Bitcoin and Ethereum) in the world by the market cap, the third biggest currency is Ripple. It is originally the name of the company that is responsible for creating and transferring global payments using XRP. This system offers to break free all the walled gardens which the financial network makes with currency exchanges, processing delays and fee structure. Ripple platform is created to provide the users to transfer amount from different currencies in a fraction of minutes, from anywhere around the globe. This is one of the ambitious aims intended to reduce the need for an older system like SWIFT or Western Union.

Few terms associated with Ripple

XRP: It is the name given to a digital currency which helps in the transacting the money on a Ripple network. It works as a liquidity source whenever it is necessary besides acting as a bridge among the two currencies. XRP, which is an open source blockchain operates on the interface of peer-to-peer servers. At the same time, it belongs to the asset class of the XRP ledger.

Ripple: It is an American based technology firm that designs the Open coin also called as Ripple Payment Protocol(RPP) and network. Before Ripple, it was initially been traded as Ripple Labs.

RippleNet: This has been the Ripple’s network of institutional payment providers like money services or banks around the world. It unites various payment networks like Digital Asset Exchanges, banks, corporate entities and payment providers and accepts both cryptocurrencies and fiats.

Benefits of Ripple

Current methods which are used for sending money to different countries internationally has been outdated. Besides, Ripple solves this problem and plans for a collaboration with financial systems throughout the world and offers a solution via blockchain. By following Ripple’s global network, financial institutions process the user’s payments from anywhere in the world cost-effectively, reliably and instantly.
Ripple is initially created for the daily payments, so it is designed with power safe technology than Bitcoin. Consequently, transactions are much cheaper and fast. They can exchange with any value or currency such as gold, with a unified low commission.

Bitcoin Vs.Ripple

Bitcoin that is a type of cryptocurrency with its most significant market cap, is an obvious comparison while discussing the other cryptocurrencies. Moreover, there are many differences between Ripple and Bitcoin.
Few of the notable ways is how Ripple is marketed especially in regards to the transaction speeds.
Secondly, it is all about the duration a transaction can take. The risk involved with the extreme bitcoin is the amount cannot be equal to what the first initiated money. Bitcoin is wholly decentralized as this was created with the sole purpose of providing the financial transactions without any third party involvement. In Contrast, Ripple sells their services to financial institutions and banks. As most of the currency, XRP is controlled by the organization, it is more centralized.

Furthermore, Bitcoin is made with the sole purpose of serving brand new financial institutions. On the other side, Ripple with its virtual tokens help the transfer of assets and seeks to support its already surviving financial networks and update the capacities for worldwide transactions.

Conclusion

Finally, Ripple is a type of cryptocurrency that is designed for financial industry or banks. Banks to use the Ripple network for making payments across different countries in a quicker and with less expensive. This Ripple is a type of blockchain system, where all the information is transparent and immutable. The only drawback with Ripple is centralized, but it is one of the popular cryptocurrency.

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