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What is Ripple(XRP)? A dive into one of the earliest cryptocurrencies

27 Oct 2022 By : Harshil Shah
Southeast Asia’s Lar

Key Takeaways:

  • Ripple is one of the biggest cryptocurrencies out there, with a market valuation worth billions.

  • Ripple(XRP) has a very fast and robust transactional system.

  • Ripple has its own fair share of controversies, and yet it is one of the most favourable networks for institutions and banks. 

Ripple is a cryptocurrency that was released in 2012. It is one of the earliest cryptocurrencies and is still in use today. Ripple(XRP) is different from other cryptocurrencies because it is not mined. Instead, it is created by the Ripple software ledgers. 

Ripple is used for international payments and has been adopted by many banks to speed up transactions. Because it is not mined, there is no need for energy-intensive mining rigs, and this feature makes Ripple more environmentally friendly than some other cryptocurrencies. 

This blog post will deeply dive into what Ripple is and how it works, and we will also explore its uses and advantages over other cryptocurrencies.

What is Ripple?

Ripple is a real-time gross settlement system (RTGS), currency exchange, and remittance network by Ripple. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol is built upon a distributed open-source Internet protocol, consensus ledger, and native cryptocurrency known as XRP (Ripple). 

Released in 2012, Ripple purports to enable "secure, instant, and nearly free global financial transactions of any size with no chargebacks." It supports tokens representing fiat currency, cryptocurrency, commodities, or other value units, such as frequent flier miles or mobile minutes.

How does Ripple work?

Ripple is a cryptocurrency that was released in 2012. It is similar to other cryptocurrencies, such as Bitcoin, because it uses a peer-to-peer system to validate transactions. However, Ripple is different because it uses a consensus ledger instead of a blockchain, which means that Ripple can confirm transactions without requiring miners.

Ripple works by allowing users to hold balances in multiple currencies. When someone wants to send money to another person, they first convert their currency into XRP, and they then send the XRP to the recipient, who can then convert it back into their own currency. Because there is no need for miners, transaction fees are very low - even lower than Bitcoin.

One of the benefits of Ripple is that it can be used to send any asset, not just currency. This means that you could use Ripple to send gold or even shares in a company. The possibilities are endless!

History of Ripple

Ripple is one of the oldest cryptocurrencies, dating back to 2013. It was created by Jed McCaleb, who also founded the now-defunct Mt. Gox exchange. Ripple's original purpose was to be a faster and more efficient alternative to Bitcoin. However, it soon became apparent that Ripple needed to compete with Bitcoin on speed or efficiency. As a result, Ripple shifted its focus to become a payment network for financial institutions.

Ripple has experienced some ups and downs over the years, but it remains one of the most popular cryptocurrencies today. In 2017, Ripple saw a massive surge in price and market cap, only to crash back down again in 2018. Nevertheless, Ripple continues to be used by many financial institutions and is currently one of the largest cryptocurrencies by market cap.

Pros and Cons of Ripple

Ripple is one of the earliest cryptocurrencies, and it has a lot of pros and cons. On the pro side, Ripple is speedy and efficient. Transactions on the Ripple network can be confirmed in just a few seconds, which is much faster than other cryptocurrencies. Additionally, Ripple is very scalable; the network can handle thousands of transactions per second without any issues.

On the con side, Ripple is less widely adopted than some other cryptocurrencies. Additionally, because it is so efficient, some people worry that it could be used for money laundering or other illegal activities. Ripple is not decentralized, it is a distributed system, and this is frowned upon in the crypto world.

Ripple controversies

Ripple has been embroiled in a number of controversies since its inception. Perhaps the most notable is its association with the banking sector. Ripple has been accused of being nothing more than a tool for banks to use to avoid the fees associated with traditional cross-border payments.

Another controversy surrounds Ripple's centralization. Unlike other cryptocurrencies, which are decentralized and have no single entity controlling them, Ripple is centrally controlled by its founders. This has led some to accuse Ripple of being no different from traditional fiat currencies.

As mentioned above, Ripple is not very decentralized and hence not considered a 'real' cryptocurrency. 

The most considerable controversy with Ripple is its trouble with the SEC and other enforcement agencies. Ripple has a long list of such situations, the biggest being the ongoing lawsuits with the SEC. 

Ripple's cofounder Jed McCaleb also left the company with his account getting blocked by the company, attracting another lawsuit. He then went on to find Stellar protocol. 

Finally, there is the issue of XRP, Ripple's native currency. XRP has been criticised for being unnecessary and having no intrinsic value, and some have even gone so far as to call it a "useless token."

Conclusion

Ripple(XRP) is one of the earliest cryptocurrencies and has a lot to offer. It is fast, efficient, and scalable, and it also has a strong team behind it and a growing community. 


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