Coin Diary Crypto Learning, What is XRP? #3
Grab your life vest, because we’re going to dive right into XRP! 🏊🏻♂️
Are XRP and Ripple the same?
In a nutshell – NO!
If you’ve heard of Ripple, you might know that it’s actually a payment platform, or a real-time gross settlement system (RTGS) currency exchange and remittance network, designed to allow seamless transfers of money in any form, be it USD, Litecoin, Yen or others.
The idea behind the creation of this platform was to enable almost instant global transactions at low costs. This drew the attention of some of the worlds biggest financial players, including Santander, UBS, American Express, RBC and more. They liked RippleNet as it meant they could send large sums of money, without the huge bank fees and long wait times, traditionally associated with international payment systems such as SWIFT.
And then there was XRP – a digital asset for payments, otherwise known as a cryptocurrency or token.
So how is XRP different from other cryptocurrencies?
In a similar fashion to a company releasing stocks, Ripple released 100 billion XRP tokens. This is the maximum amount of tokens there will ever be.
To dive a little deeper – Bitcoins are released as rewards for for the ‘miners’ in order to incentivise the continuation of the network, whereas XRP tokens have already been created and are released when Ripple chooses to do so. And if all that sounds like crazy talk to you – put simply – we don’t know exactly when Bitcoin will reach its supposed limit of 21 million Bitcoins, but we do know exactly how many XRP are in existence. Make of that what you will!
One of the key elements of other cryptocurrencies is the fact that they are totally decentralised and not owned by any one authority or individual. Bitcoin for example is reliant on its huge number of global miners for it to function, grow and develop – which effectively means that no one person has full control over the currency.
Other cryptocurrencies are based firmly on the idea of separating themselves from financial institutions and authorities, whereas Ripple and XRP actively welcome them.
Some crypto fans aren’t keen on the fact that this currency is owned by a company with centralised control and is therefore more regulated, whereas others see this as a sign of security and the potential longevity of XRP.
Another defining difference between XRP and other cryptocurrencies is the speed at which payments can be processed. A transaction made with XRP is settled in just 3.5 seconds. Bitcoin transaction sometimes can vary depending on how congested the network. (can take 10 minutes to extreme cases of 16 hour).
Cryptocurrencies like Bitcoin were created as a peer-to-peer payment system, with the purpose of cutting out banks and government control.
XRP was actually intended as a ‘bridge currency’ for financial institutions. This allow them to make simple, fast, cross-border payments, without the need for multiple middlemen.
Although XRP isn’t necessary to use the Ripple platform to make payments. CEO of Brad Garlinghouse tweeted that banks and payment providers are “indeed planning to use XRP.”
🤩 You can now buy XRP & BCH, as well as BTC, LTC & ETH using the Revolut App 🚀!
So that’s our lowdown on XRP. “We hope that we’ve shed some light on one of the more talked about tokens, made things clearer and helped you to understand how and why it differs from the other cryptocurrencies out there!
There’s no question XRP is one of the most interesting tokens out there. They are offering what could potentially change inter-bank transactions and subsequently the monetary system as we know it.
A lot of cryptocurrencies are trying to disrupt the way we use and circulate money. However only time will tell how we adopt the changes put forth by this up-and-coming technology.