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How Would You Put Ripple?
Simply put, Ripple is a blockchain-based technology which is actually a digital payment network system. It has its own cryptocurrency, XRP. The main fundamental behind Ripple is an asset exchange payment process and money settlement system. The Ripple payment system shares similarities with the widely-used SWIFT method for transferring funds and securities across international borders. This platform is frequently utilized by major financial institutions and intermediaries to facilitate cross-border transactions. More Bitcoin scalability challenges by clicking here.
The Ripple system operates using pre-mined tokens, which are denoted by the symbol “XRP”. The primary function of XRP is to serve as an intermediary in the exchange of various currencies, thereby enabling more efficient and cost-effective international money transfers.
An Insight Into Ripple
Ripple, like other cryptocurrencies, runs on an open-source and decentralized platform that is also a peer-to-peer platform. It will help to conveniently transfer money in any form anywhere across the world. It can transfer any currency be it dollars, Euros, yen or any other cryptocurrency. Ripple is a global name and has customers like some of the world’s major banks and financial institutions. And transactions are done super quickly.
A Brief History Of Ripple
The earliest version of Ripple came into existence under software developer, Ryan Fugger in 2004. It was then used for helping others with credit within the community. So technically speaking it was the first ever crypto, even before Bitcoin reared its head. But at that time it was not functioning like crypto.
Later in 2011, Jed McCaleb developed the XRP blockchain and cryptocurrency in its present form. Once he rounded up a team of developers and found investors, he approached and asked Fugger for the rights of Ripple to which he readily agreed in 2012. This is a brief background history of the crypto.
What Is XRP And How Is It Related To Ripple?
Ripple is a network that facilitates the smooth transfer of money and securities across borders. XRP is the currency that it uses. XRP, the currency of the system functions on the XRP ledger which is a blockchain technology. XRP can be purchased as a form of investment. It can also be utilized as a cryptocurrency that can be exchanged with other cryptocurrencies. Another way in which XRP can be used is to finance transactions on the Ripple network.
But one major difference of the Ripple blockchain is that it functions in a bit different way from other blockchains. The consensus agreement is the fundamental mechanism utilized in this system. Users can choose trustworthy nodes from the node list to validate their transactions. In contrast, other blockchain technologies, such as Bitcoin, require all nodes on the blockchain ledger to validate and verify transactions. The transaction can only be considered valid when a majority of the ledger holders agree to its validation.
How Does XRP Work?
Here the consensus protocol is used to validate transactions, unlike the crypto blockchains. As and when new transactions enter the ledger the validators will keep on updating their ledgers every 3-5 seconds to ensure that their ledgers match with that of others. If a discrepancy is noticed, the system stops to view and analyze what went wrong where. This system of verification is actually a good practice because inconsistencies will at once be notified and looked into. This reduces the chances of fraud and malpractice. The validation of transactions is done most effectively. In this aspect, the Ripple network receives an edge over the other cryptocurrencies.
And the good news here is that an XRP transaction takes even lesser time than Bitcoin transactions to take place. The fees charged are nominal in comparison to the Bitcoin ecosystem.
Mining Of XRP
Mining is the process of completing complex mathematical calculations and computations to come up with a new coin. It consumes a lot of time and is very complex. And once a coin has been successfully mined they are added to the blockchain after which the miner is rewarded handsomely. So mining is a system of distributed verification used by a majority of the cryptocurrencies available.
But when you dwell on the XRP network, you will understand that the XRP coins are pre-mined. When the Ripple network came into existence it came with a cache of 100 billion pieces that were then gradually and systematically released into the system. So they are not mined over time like Bitcoin and others.
Advantages Of Ripple
Ripple has a few advantages:
- Quick settlement
- Extremely low fees
- The exchange network is flexible
- Many big financial institutes use Ripple on an everyday-basis
Ripple or its currency XRP can easily be bought with apps like Yuan pay group for a smooth purchase.
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