What is Ripple?
Ripple is both a payment network (RippleNet) and a cryptocurrency (Ripple XRP), created in 2012. RippleNet connects banks and other big institutions and allows them to transfer money and other assets through the Ripple network. Thereafter, all transactions are recorded on the XRP Ledger.
The XRP ledger is an open-source product created by Ripple to solve a major point of friction in international payments. XRP can be used by banks to source liquidity on demand, in real time. It also allows payment providers to lower foreign exchange costs, provide faster payment settlements and expand their reach into new markets.
What is XRP?
Ripple XRP is the cryptocurrency used in the payment network for all transactions, reducing the time and money associated with cross-border payments. Each transaction through the system is processed in only 4 seconds. For comparison, Ethereum takes more than 2 minutes, Bitcoin over an hour, while traditional systems can take between 3 and 5 days.
XRP can handle 1,500 transactions per second. Bitcoin, on the other hand, can reportedly only handle 7 in the same time. In addition to being fast and scalable, the Ripple network also offers low transaction fees. Because of its benefits, the system is already being used by more than 75 financial institutions across the globe.
The amount of Ripple in existence is a key element to know about Ripple (XRP). All XRP have already been created with a total supply of 100 billion. It must be noted that on December 7th, 2017, Ripple Labs placed 55 billion XRP in cryptographically-secured escrow accounts in order to ensure a steady supply release of 1 billion XRPs per month. Thus, with this decision, Ripple reassures its users that it will not flood the market with the 55 billion XRP at once, creating stability and trust for its currency.
What are xVia, xRapid and xCurrent?
xVia is for corporates, payment providers and banks that want to send payments across various networks using a standard interface. xVia’s simple API doesn’t require software installation and enables users to seamlessly send payments globally with transparent payment status and with additional information, like invoices, attached.
In other words, xVia is what businesses use to plug into the Ripple Network and with this feature users can seamlessly send payments all over the world with complete transparency.
xRapid, using XRP, is for payment providers and other financial institutions who want to minimise liquidity costs while improving their customer experience.
xCurrent is an enterprise software solution that enables banks to instantly settle cross-border payments with end-to-end tracking. Using xCurrent, banks message each other in real-time to confirm payment details prior to initiating the transaction and to confirm delivery once it settles.
XRP vs Bitcoin
So, you might be wondering, what is the difference between XRP and Bitcoin?
Ripple is a payment network for financial institutions and is a competitor to systems like SWIFT. It can also be traded, but was never intended to be a payment method for buying things online. Bitcoin aims to become a globally adopted currency that could improve or even replace conventional money.
Moreover, Bitcoins are a new way of making payments that bypass banks and other financial institutions. Ripple, on the other hand, is working with banks to help them speed up cross-border payments and reduce corresponding fees.
Ripple is a viable competitor to the traditional financial system. Ripple (XRP) and RippleNet can be a very useful tool for banks and other financial institutions, as well as, businesses of all types. Ripple simplifies the payments for corporate entities, banks can use it to get new revenue, while payment providers benefit from expanding their reach.