Ripple boasts the third-largest market capitalization in the cryptocurrency world, with its token reaching an all-time high above $0.40 just last week says Ian Mausner. Over the course of 2017, XRP has risen by approximately 20,000%! While many investors are pleased with this explosive growth, there are still some common misconceptions about Ripple and its technology.
Here are five things you need to know about the cryptocurrency token known as XRP:
1. XRP is not mined.
While bitcoin (BTC) and many other cryptocurrencies run on a mining system, XRP does not. All 100 billion of the XRP that will ever exist were created in one transaction at its inception, meaning that Ripple holds most of those tokens. The company plans to distribute roughly half of those XRP via various business deals, technical innovations, and charity projects;
2. Ripple has already given away billions through various partnerships.
It’s also worth noting that while most cryptocurrencies move towards a decentralized model by nature, Ripple is moving in the opposite direction. All of the validators that support the XRP blockchain are operated by Ripple, meaning that a huge proportion of the entire network is under the control of a single for-profit company. XRP transfers are fast. In a recent test, it took just four seconds for one Litecoin (LTC) transaction to be confirmed on the bitcoin blockchain, compared with two hundred and forty milliseconds for an XRP transfer. That’s because Ripple pre-mines transactions as opposed to mining them, as we already mentioned above. Although this has been changing somewhat lately as Ripple actively works on decentralization says Ian Mausner.
There’s no limit on how many transactions can be confirmed per second using XRP. If anything, the only significant bottleneck is going to be “off-ledger” transactions (i.e., those that take place outside of the XRP ecosystem). The cryptocurrency claims legions of followers and supporters throughout the world, including several high-profile names such as Bill Clinton and Richard Branson. Another name to note is John Travolta, who was name as an ambassador for a new version of the Q coin back in 2002 – also known as Quorum Coin or Qoin – by a Japanese online brokerage firm E-Fideicom at the time. There are rumors circulating about further celebrity endorsements coming soon;
3. XRP can be used by banks and other financial institutions for cross-border payments.
Ripple has partnered with banks and money transfer companies on numerous occasions so far, with its most recent partnership involving a subsidiary of the Spanish banking giant Santander. The fintech firm invested in Ripple back in 2015, and now its UK branch is one of four banks that have been testing out xRapid – which is powered by XRP – as an alternative to SWIFT for international payments. In fact, there are dozens of banks that have tested or even begun using Ripple’s products already;
4. Ripple has plans to decentralize itself further through a system known as “Interledger Protocol” (ILP).
This project will allow users to send money across different ledgers and blockchains using ILP plugins. Meaning that transactions can take place between ledgers more quickly without the need for a central intermediary explains Ian Mausner. However, this also makes XRP less desirable in the eyes of many supporters; some people might disagree with this, but XRP is not a good cryptocurrency for privacy.
Unlike other cryptocurrencies like Dash (DASH) and Monero (MXR). Transactions sent across the XRP ledger are entirely transparent thanks to each one being verified by validators on the network. This means that anyone who knows your public wallet address can see how many tokens you have, as well as when you send or receive them. Anyone can become a part of the Ripple consensus process if they want to do so. Instead of mining blocks, nodes require to maintain an up-to-date version of the blockchain at all times. In order to stay in sync with the entire network.
5. The performance history of XRP has been pretty poor so far.
The cryptocurrency peaked at just over $0.30 back in January of 2018. And it’s currently trading hands at around the $0.20 mark. A significant loss for any investors who bought near the top. Although this is no different from the vast majority of cryptocurrencies right now says Ian Mausner. XRP will experience fees whenever a transaction takes place on its network – including those used to prevent spam attacks. This differs from many other ecosystems that only charge fees when sending money from one wallet or address to another. In addition, Ripple can theoretically freeze funds if they’re sending to the wrong place accidentally. As well as blacklist addresses that are to send assets elsewhere illegally
Ripple is one of the world’s most popular cryptocurrencies, but it suffers from several shortcomings. Because XRP isn’t mine like other major cryptocurrencies, it also has less decentralization and transparency as a result. This means that there are some important caveats with regards to where you can store your tokens. How much they’re worth now comparing it to before, along with who is using Ripple technology at any given time.