What Is Ripple?
Using Ripple technology, you can receive payments for financial transactions as well as cryptocurrency. Based on a joint invention of Chris Larsen and Jed McCaleb, it was released in 2012. Payment settlement and remittance is the main process of Ripple, which is similar to the SWIFT system for international money transfers and security transfers, which is used by banks and financial middlemen.
XRP is the ticker symbol for the cryptocurrency token that uses pre-mined coins. The company and network are called Ripple, and the cryptocurrency token is called XRP. As a temporary settlement layer denomination, XRP serves as an intermediary mechanism between two currencies or networks.
This is a currency exchange and remittance network that independent servers verify and is known as XRP – Real Time Gross Settlements. Transfer times are immediate, and the currency is known as XRP. The main selling point of XRP is the lack of fees and wait times associated with banking. The currency is exchangeable for the majority of other currencies. The currency cannot be mined because the coins are finite – there are 100 billion. The platform is not built on a blockchain, but rather on a Hash Tree. Although the XRP token isn’t required for every transaction, it’s popular with banks and institutions.
XRP is part of The CoinDesk 20 cryptocurrency platform, which features cryptocurrency price history, a ticker, a market cap, and live charts. Additionally, CoinDesk offers a range of institutional-grade price indexes
XRP Ledger: How Does It Work?
XRP Community members, including Ripple, maintain the ledger.
XRP transactions are approved and validated by independent validators. Known as consensus, it serves as an irreversible and final resolution in the case at hand. All outstanding transactions are aggregated into a new ledger every 3-5 seconds. Validators can be anyone, and today there are universities, exchanges, and financial institutions participating in the ledger. The current number of validators is 36, with Ripple running six of them—16%.
 XRP Mining Guide
Almost all blockchain-based cryptocurrencies use the “mining” system to verify transactions. As well as facilitating transactions, it provides the mechanism for introducing new currency into a cryptocurrency system, typically as a reward for supporting the network. When more and more transactions are verified, Bitcoin’s supply limit gradually increases to 21 million tokens.
For example, XRP was pre-mined, meaning 100 billion tokens were created by the XRP Ledger before their continual release into the public sphere. As an incentive, Ripple owns about 6% of the cryptocurrency, as a way to help it succeed over time. About 48% of the remaining production is held in a reserve for regular release into the market through sales.
Due to the sheer volume of XRP that will be released, there are concerns that it may dilute the value of other XRP already in circulation since part of the value of any currency comes from its relative scarcity.
Digital Capital Management’s Tim Enneking notes that the company has implemented many mechanisms (trust, predictable release, etc.) to reduce uncertainty. Mining vs. pre-mining may also be contributing to the SEC’s conflict with XRP, since the SEC views XRP more as a security, like a stock, that is subject to a different set of regulations.
 Benefits of Ripple
Quick settlement
Upon confirmation of a transaction, it is completed very quickly. For example, banks may take days to complete a wire transfer, while Bitcoin transactions may take minutes or even hours to verify.
It’s very affordable
With the current exchange rates, it costs just 0.0001 XRP per transaction on the Ripple network.
A network of versatile exchanges
XRP is not the only currency used by the Ripple network, but the system can also support other currencies as well as for cryptocurrencies and commodities.
A large financial institution uses this. Ripple can also be used as a transaction platform by large enterprises. This network is already being used by Santandar, Axis Bank, and Yes Bank, showing it has a larger institutional market adoption than many cryptocurrencies.
The downsides of ripples
Quite centralized
Unlike corporations and governments, cryptocurrencies are decentralized. This was one of the reasons they became popular. In contrast to this philosophy, the Ripple system has a default list of validators, which can be somewhat centralized.
There is a large supply of pre-mined XRP
Ripple’s supply not in circulation is escrowed, but large amounts may be issued at inappropriate times, which could in turn negatively impact XRP’s value.
XRP was recently sanctioned by the SEC
A lawsuit was filed against Ripple by the SEC in 2020, claiming the company should have registered XRP as a security because it can decide when to release it. If this issue is not resolved, institutional use could be slowed. In addition, XRP has been delisted from several exchanges due to this matter.
Is it worth buying XRP?
The vision and benefits of XRP might appeal to some, but White is concerned that the SEC lawsuit might hurt those who wish to invest. There are deep differences between the SEC and them; however, the SEC sees them as a settlement layer. As long as Ripple’s legal issues are not resolved, they will not be able to onboard any customers,” he says.
Enneking warns that this uncertainty can make XRP a high-stakes gamble that is not for the faint of heart. The announcement from the SEC caused XRP’s price to plummet, he notes, making this cryptocurrency a particularly volatile investment until things are settled with the SEC.
Having said that, if you think Ripple will remain the dominant payment system and will continue to take over the world as a result of the SEC lawsuit, then XRP might be worth the investment. If you gamble, make sure it’s with money that you can afford to lose.
