Introduction to Ripple
Ripple has always been in the top five cryptocurrencies. Considered the banks favorite, Ripple was staying in the shadows of Bitcoin and Ethereum and was not talked about as much. But it is pretty different than most cryptocurrencies. With the recent big surge in price, Ripple is drawing all attention and is making people wonder: “Is this the future of banking?”
This guide is intended to give you an introduction to Ripple and its network. For the most detailed explanation read their whitepaper. This guide is not intended as an investment guide, rather to inform the readers about the project, the company behind the project and the currency. If you are new to cryptocurrencies and you need to catch up, you can read our Bitcoin Guide or our detailed Ethereum Guide.
What is Ripple?
Ripple is a digital currency, with the acronym (XRP) and an open payment network created in 2012. The currency is specifically designed for financial institutions and payment providers. Also they are a profit generating company and a venture backed startup. The payment network is called RippleNet and it connects banks and other institutions through “gateways”, also allowing them to transfer money and assets through the network.
XRP offers payment providers and banks a reliable, on demand source of liquidity for cross-border payment. This allows financial institutions to source liquidity on demand, in real time without having to go through foreign transaction fees, thus creating a common standard for payments. Ripple provides global financial settlement solutions to ultimately enable the world to exchange value like it already exchanges information – giving rise to the Internet of Value (IoV).
Ripple’s solutions lower the total cost of settlements by enabling banks and financial institutions to transact directly, without correspondent banks, and with real time certainty of settlement. Ripple affords liquidity suppliers (banks and third party market makers) and liquidity takers (people and businesses who need payments) step-function improvement over how cross-border payments work today.
Banks around the world are partnering with Ripple to improve transaction costs and lay the foundation for the Internet of Value. All is aimed towards bringing value to businesses of all sizes:
- Global and large banks lower transaction and operational costs to increase wallet share.
- Small to mid-sized banks gain direct access to competitive liquidity to attract new customers.
- Third party market makers compete to provide liquidity for global payments.
- People and businesses enjoy faster and cheaper payment services with new visibility into tracking and delivery status.
How does Ripple work?
Ripple is designed to help and connect different payment systems together. To this day over 75 financial institutions work with Ripple. How does the system function? The Ripple Ledger is global and contains its own private blockchain. Through it banks and financial institutions can use “gateways” and join the Ripple network called RippleNet or Ripple Transaction Protocol (RTXP). Also the network works with currency exchanges.
Gateways are the businesses that link the XRP Ledger to the rest of the world. An existing online financial institution can expand and act as a gateway in the XRP Ledger. By doing this they gain several advantages and can use the ledger-related services as a new source of revenue. When a company joins the Ripple Transaction Protocol they can exchange large sums of money with other “gateways” at a much faster speed and with smaller costs.
Where can you buy and hold Ripple?
You can buy XRP here https://cex.io/r/0/up118310051/0/
Its very easy to use and easy to cashout into any currency also. You can either store and trade in this exchange or you can transfer it to another Online or Hardware Wallet.
Conclusion
Unlike most cryptocurrencies that have no purpose or application, just have a limited supply and high demand, XRP is a digital asset with a clear purpose. Ripple’s goal is to help financial institutions do their job faster and cheaper. Some people see this as going against what cryptocurrencies stand for, that being a decentralized system that bypasses the financial institutions. The company created all coins and still holds a majority of the supply which makes the system somewhat centralized.
Ripple’s infrastructure sure makes sense for bigger institutions and banks and aims to help move larger amounts of money around the world faster and with smaller costs. Although all this is aimed at the banks and not the average person, they hope to affect normal people indirectly by helping banks and other financial institutions be up to date with the evolution of technology and lower their transaction costs. Ultimate goal is to stop the restrictions and obstacles of cash flow.
Should you invest? Well that is entirely up to you. So far Ripple has shown its potential and is living up to the hype. For sure 2017 was the best year for Ripple so far and we will be watching the charts closely. Ripple brings a viable competition to the old financial system and can play a major role of changing the financial systems into a more up to date version, transferring large amounts of money and cryptocurrency adoption.
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