What is Ripple cryptocurrency and what is the secret of its popularity?
Generally, cryptocurrencies are divided into bitcoins and other cryptocurrencies (altcoins). With that, despite some differences, altcoins are supposed to be quite technologically similar to bitcoins in some core features. The majority of altcoins do resemble bitcoins. Isn’t it the same for the other alternative cryptocurrencies?
The close inspection of the issue reveals that there are cryptocurrencies (including pretty popular and successful) that differ much from the traditional majority. Ripple (XPR) is thought to be one of the most perspective cryptocurrencies in this group.
History of Ripple cryptocurrency and the way it works
The fundamental principles of Ripple appeared long before the advent of bitcoin and cryptocurrency, in general. In 2004, Ryan Fugger thought how to create an Internet-based settlement system with the help of a brand new technology, which would no longer depend on the traditional monetary system. However, his peer-to-peer network project with the users, who were able to open the credit lines to one another, was not realized due to the lack of investments. The Fugger’s ideas could not be implemented till 2009 when Satoshi Nakamoto first introduced bitcoin.
In 2010-2011, the Ripple developers looked through the popular bitcoin technology and started to advance Ripple technology in cryptocurrency way. The Ripple developers did not intend to copy the bitcoin technology fundamental ideas, but they still adopted a lot of crucial decisions. As a result, the investors became more eager to invest into a new advanced product – Ripple cryptocurrency, and that has enhanced its development, in consequence.
Ripple cryptocurrency was designed to be used not only to exercise the Internet-based individual payments but a much greater number of tasks. Though Ripple can be applied for individual payments, it has another intended purpose – decentralized processing technologies integration and traditional bank case data storage, making the last more technically upgraded.
It is essential to understand that Ripple application is useful not only for the bank owners; those clients, who start using Ripple, can experience a greater number of a bank system opportunities, in fact. Along with that, price and speed of the payments change to good for the clients (the contractors’ payments are made through Ripple, avoiding traditional bank channels).
When it comes to payments, the principle of Ripple work can be explained as follows (to make the things simpler, let us change currencies used in Ripple into ordinary goods). Supposing you have an old and useless telephone, and your friend has the headphones, which you would like to have. You are asking him to barter his headphones for your telephone, but he says that he does not need the old telephone, and he can only sell his headphones for some money, or barter it for a trendy cover for a tablet, for instance. If you are not comfortable with any of these variants, you can always put your telephone on the Internet-based auction to buy the headphones for the traded money. However, there is strong likelihood that the dealers only, who won’t offer a good price, will be interested of the telephone deal; it also takes a lot of time. However, if you use a global Ripple network to search for a person, who would need your telephone, somebody could (directly or indirectly) offer you a cover that you need to get the desired headphones. Moreover, due to the credit existing in the network, your contact can get a cover directly from a telephone buyer’s, to whom you will give the telephone then; evidently, in this case, the trade processing is much shorter.
Within Ripple network, a wide range of currencies and valuable assets can be used – these can be ordinary fiat currencies (dollars, rubles, and so on), cryptos, precious metals, and any other valuable assets including oil barrels. The mentioned assets are transferred via Ripple coins (XRT): first, you buy Ripple as a source currency, then, transfer XPR to your contact’ Ripple wallet. After this, your contact sells Ripple at the needed currency (transfer fee is also taken in XRP). Consequently, XPR – is just a ‘fuel’ for a payment system work, and the whole money transfer process through XPR is aimed to exchange Ripple twice, as it has been described above.
What makes Ripple similar to traditional cryptocurrencies?
Now, it is time to compare Ripple to the traditional cryptos, namely, bitcoin. As we know, Ripple has been long developing independently from bitcoin.
1. Within Ripple system, fees do not include ‘miners’ fees’, which are common for any transfers (miners’ fees are not needed because Ripple mining is not carried out within the stated system). However, within Ripple network, there are still small transfer fees, aimed to fight with the ‘dust’ (minor ‘spamming’ transactions, used potentially for DDoS attacks on any cryptocurrency). Nevertheless, having reached its purpose, these payments destroy themselves, instead of enriching the payment system’s developers.
2. We have mentioned above that Ripple mining does not currently exist. Initially, when the system was first created, 100 bln of XRP coins were generated; two-thirds of these coins were distributed among the developers, and the rest – among the first users. Hereafter, as the system was advancing, the developers exercised the additional XRP transfer to those, who assisted them in Ripple work organization.
3. In the Ripple network, there is no blockchain, as it is meant traditionally; however, the users’ data (Ripple wallets) is stored in a distributed manner in the identical registers, kept on the Ripple network servers, synchronizing effectively as the changes occur (here, some similarity to bitcoin can be traced as on every node of the bitcoin network, a full and accurate blockchain copy is stored; read more about blockchain technology in this article
4. The network transactions are carried out really fast due to the registers are renewed every few seconds.
5. In the Ripple network, the so-called gates exist; these are payment gateways used by the stated system to enter the new markets or connect new services (including large banks). Those services, that wish to contact with Ripple through the gates, guarantee the overall system financial accountability.
Where is it better to buy, sell, or exchange Ripple?
The perspectives and popularity of Ripple cryptocurrency can be seen through the following factors: an increase in the number of partners (including banks) and Ripple growing market price rate. Over the last half year, Ripple market rate has increased from 0.005 USD to 0.2 USD, that is meant, by 40 times; those, who sold Ripple at its price peaks, could have even profited by 6000% more.
It is strongly recommended to buy Ripple exceptionally on the respected cryptocurrency platforms that encourage Ripple trading. The number of cryptocurrency platforms with Ripple is growing steadily because many providers want to trade this currency, and many investors want to buy Ripple, or maybe, exchange Ripple to the other cryptos. So, as soon, Ripple trading will be open
on EXMO – reputable and recognized cryptocurrency platform.
Additional materials that may help you:
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Cryptocurrency: Where to start? Pt.4 How to Ensure the Safety of Your Crypto Assets
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TOP-5 facts about Ethereum
What are the pros and cons of investing into cryptocurrency
Why do miners choose exchanges to exchange cryptocurrency for fiat funds
Thank you for staying with us!
Your respectfully, EXMO team
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