What Is Ripple?
Ripple, or sometimes called XRP, is both a cryptocurrency as well as a platform. Technically, Ripple is the brand of the firm and network, while XRP is the cryptocurrency. The Ripple platform would be an open system designed to facilitate quick and inexpensive digital transactions. Ripple has built a reputation for itself, and several financial institutions and analysts expect a good future for this network. The network is projected to boost the global liquidity of money by enabling transactions throughout the world and take place at record speeds and for minimal prices. XRP set it's all-time daily high on January 4, 2018 is when value of one XRP reached $3.84. However, a negative trend began following the peak, and by September 2018, XRP dropped more than 93 percent of its value from its January 2018 high, reaching a new low of $0.26 on September 11, 2018. Although there looked to be times of hope, the negative price trend lasted through 2018 and 2019, and the prolonged dismal performance culminated in XRP hitting it's all-time daily low of $0.12 on March 13, 2020.
In November 2020, XRP had an increase in price—daily it's high reaching at $0.77 on November 24, 2021. From November 2020, the price of XRP has shakily trended higher, reaching a daily high of $1.96 on April 14, 2021. The substantial and widespread May 2021 price changes in the crypto market that apply to the bulk of exchange-traded digital assets are presently mirrored in XRP's pricing. As on May 20, 2021 the estimated closing of XRP was $1.18.1 How can an investor acquire Ripple? Like other cryptocurrencies, Ripple is accessible on multiple different exchanges. XRP, Ripple's cryptocurrency token, may be acquired on a variety of exchanges, according to the Ripple website.
What is the procedure for purchasing XRP tokens? For US investors, it is now a difficult issue to answer. XRP is traded on over 100 worldwide marketplaces and digital asset exchanges, as per the XRP Token FAQ. However, the Securities and Exchange Commission has filed a lawsuit against Ripple Labs, Inc. In December 2020, the Securities and Exchange Commission (SEC) filed a lawsuit towards Ripple, saying that their sale of XRP constituted an unregistered securities offering worth approximately $1.38 billion USD. As a result, numerous exchanges have removed XRP from their listings. In the United States, buying XRP has become more difficult, though not impossible, since several exchanges have temporarily ceased trade. Some exchanges may choose to de-list solely in US markets and/or in countries where they operate, or they may choose to de-list internationally. The following are some instances of well-known exchanges that have temporarily delisted XRP while the litigation is being resolved:
Phemex Crypto Exchange, which had earlier delisted XRP, has reversed its decision and reinstated XRP trading on its platform for both spot (XRP/USDT) and contract (XRP/USD) trading. As of May 21, 2021, it's unknown when the legal action will be resolved, or what the effects of the ongoing courts judgements and motions will be in the weeks and months ahead. While you may not have been able to buy XRP right now, the conclusion of this lawsuit has the historic potential to determine not just Ripple Labs, Inc.'s and XRP trading's future, as well as the regulatory future of cryptocurrencies. The cryptocurrency investing world appears to be restricted to Bitcoin from the outside. Bitcoin, being the very well cryptocurrency, is the market leader in terms of market capitalization and investor interest. There are, however, various additional possibilities for people looking to diversify their portfolio and try out cryptocurrencies that take a different approach to the notion of digital currency. One of them is Ripple's XRP. In March 2021, the cryptocurrency was placed fourth in terms of total market capitalization, after Bitcoin, Ether, and Binance coin. Let's look at what sets XRP apart from Bitcoin and other popular digital tokens.
XRP vs. Bitcoin
Bitcoin is a digital currency that is supported by a public blockchain record. It is used to make payments for products and services. The blockchain idea, which is a public database of verifiable transactions and record keeping, underpins the bitcoin network. Miners continuously validate transactions and add these to the Bitcoin blockchain. Miners are compensated with BTC when transactions are successfully validated in return for their time and the computational power required to validate the ledger in this way. Ripple Labs' products use XRP as their native coin. Its products are utilized for payment settlement, asset exchange, and remittance systems that function similarly to SWIFT, a service for international money and security transfers provided by a network of banks and financial intermediaries4. In comparison to Bitcoin, XRP is pre-mined and employs a simpler mining mechanism.
What are the key distinctions between Bitcoin and Ripple?
The following are the primary differences between Bitcoin and XRP:
Both have their own ways for verifying transactions
Instead than using the blockchain mining idea to authenticate transactions, the Ripple network employs a unique distributed consensus process in which participating nodes poll each other to verify the transaction's legitimacy. This allows for near-instant confirmations without the need for a central authority. As a consequence, XRP stays decentralized and outperforms many of its competitors in terms of speed and reliability. It also implies that, in comparison to Bitcoin, which is regarded an energy hog, the XRP consensus method uses very little energy.
XRP is cheaper and faster than Bitcoin
Bitcoin transaction confirmations can take several minutes and are linked with significant transaction charges due to the intricate and expensive nature of mining utilized in the cryptocurrency. XRP transactions are verified in seconds and have very cheap transaction fees. XRP transactions are charged in the same way as bitcoin transactions are. A tiny amount of XRP is billed to the user each time a transaction is completed on the Ripple network (individual or organization)
There are more XRP coins on the market
At the time of debut, about 1 billion XRP were pre-mined and progressively released into the market by the company's major investors. Bitcoin, on the other hand, has a supply limit of 21 million coins, which means there can only ever be 21 million Bitcoin in existence. The artificial scarcity of BTC has sparked investor interest in the currency's potential as a store of wealth.
XRP and Bitcoin Have Different Circulation Mechanisms
When miners discover bitcoins, they are released and added to the network. They have no set release date, and their supply is mostly determined by network speeds and the complexity of the algorithm used to create coins. The release of XRP is controlled by a smart contract. According to an in-built smart contract, Ripple expected to distribute a maximum of 1 billion XRP tokens every month; the current circulation is above 50 billion. Any XRP that is not spent in a given month will be returned to an escrow account. This system assures that an overstock of XRP cryptocoins will not lead to abuse, and it will take several years before all of the cryptocoins are available. Overall, XRP outperforms bitcoin in terms of transaction processing times and transaction fees.
Bitcoin vs. Ripple Example
Here are some analogies to help you grasp both using real-world examples.
Peter, who lives in the United States, goes to Walmart and pays in US dollars. He can also use his US dollars to buy other currencies for trading and investment, such as GBP or JPY, and then sell them for profit or loss at a later date. Bitcoin is a digital money that functions similarly to real-world US dollars, for example. Peter can buy something with bitcoins and pay for it with bitcoins, or he may buy bitcoins for trading and investing and then sell them for profit or loss at a later date, just like any other fiat currency like the GBP or JPY. If Peter in the United States wishes to transmit $100 to Paul in Italy, he may do so by asking his American bank to do so. Following the appropriate charges, Peter's American bank will send instructions to Paul's Italian bank, using the current SWIFT system, to credit Paul's account with the equal euros (or USD). This process may entail substantial costs on both sides and might take many days to complete. Ripple, a payment and settlement system with its own currency, the XRP, comes to mind. For asset transfers on the Ripple network, Ripple's payment mechanism employs XRP tokens. Peter may quickly convert the same $100 into comparable XRP tokens, which may then be sent to Paul's account via the Ripple network. Paul will get the XRP tokens after the transaction has been verified and authenticated by the decentralized Ripple network. He'll have the option of converting it back to USD or indeed any currency he wants, or keeping it as XRP tokens. The verification procedure is much faster than bitcoin and other traditional money transfer mechanisms.