What is Ripple?
Ripple was first launched in 2012 when it was co-founded by Chris Larsen and Jed McCaleb. Ripple is a technology that is used for a similar purpose as the SWIFT system. It is used for international fund transfers. Ripple is both a cryptocurrency and a digital payment platform for financial transactions. It is used by banks and financial middlemen for the secure transfer of currencies all over the world.
Ripple cannot be mined and uses the currency XRP. The purpose of XRP is to serve as the middle ground between two assets of different classes. They could be two different cryptocurrencies or two different Fiat currencies.
Why is Ripple popular?
Ripple operates on an open-source network and peer-to-peer decentralized platform that ensures a smooth transfer of money in any currency. It could be dollars, euros, or cryptocurrencies like Tron or Ethereum. Ripple is an established global payments network and major banks around the world have adopted financial services from Ripple. XRP is used on this platform exchange. Ripple is used as the chain link between two willing parties who wish to make a transaction. This gateway receives and sends currencies to public addresses over the Ripple network. Anyone can open a gateway that authorizes the person to act as the middleman between a transaction while maintaining liquidity.
Bill Gates when asked about cryptocurrency said that he does not believe in the concept. However, in times of need cryptocurrencies are the perfect platform for transferring funds to those in need who are in remote parts of the world. These kinds of transfers are made much easier on Ripple.
Why should you invest in ripple?
Ripple was created to speed up cross-border transfers. Ripple is much faster than Bitcoin and much cheaper as well. It is also much faster and more efficient than Ethereum. Ripple has 100 billion pre-mined tokens out of which 55 million lie in an escrow account.
Most investors are worried that the company that controls Ripple is holding a large share of XRP in an encrypted account and can release them into the market at any minute. Ripple to INR conversion may get affected if there is a flood of Ripple in the market. However, is designed in such a way that every time a transaction takes place a part of it is destroyed. Unlike BTC, which will be last mined in 2040, it would take a really long time for Ripple to vanish completely. Which is one of the reasons why BTC to INR is much higher in value.
Ripple makes use of a consensus mechanism known as the Federated Byzantine Agreement or FBA. FBA creates a network for ripple connecting each node to a limited number of nodes. A particular number of nodes validate each transaction and then it can be added to the blockchain.
The XRP ledger has selected network participants to help validate transactions and secure the network. There are about 150 participants in the network who are together called the unique node list. The XRP cryptocurrency employs a consensus system involving several bank-owned servers. It is impossible to mine Ripple but it is possible to exchange any cryptocurrency for ripple. You can also buy it on exchange platforms.
Why do investors believe in Ripple?
Ripple is a full-fledged company that employs a big team of professionals to create payment solutions. XRP was created by Ripple Labs and they were given 80% of the tokens to start with. Since ripple is being used by major financial institutions, it is driving up the price of XRP as well. You do not need XRP to use the Ripple payment solution however both are interconnected. XRP to INR conversion is affected by this. This is one of the major reasons why XRP is preferred by most investors. Unlike every other cryptocurrency, XRP has an entire team of professionals working to make it a success.
Ripple is the new solution to the problem of prolonged periods required to complete a wire transfer. Ripple is an improvement on the drawbacks that come with conventional banking. Unlike a wire transfer in a bank, people can settle transactions in a matter of seconds. The fees for transactions are minimal compared to the fees of banks.
If you are a beginner and are looking to invest then Ripple is a good place to start as it is one of the reasonably priced cryptocurrencies.