Blockchain also works as a backbone to the Ripple coin. It fulfills the need for transferring money across global borders serving the financial services industry. Launched in 2012, having the vision of serving as an intermediate between two currencies or networks to facilitate transactions at a significantly low cost. It aims to replace the traditionally centralized channel – which costs higher – with its peer-to-peer decentralised network, allowing a streamlined channel for the transfer of funds. Check out http://bitqs.io/
What is XRP?
However, Ripple itself is not a cryptocurrency, rather it is a for-profit company that owns a majority of XRP’s cryptocurrency token. Ripple aids in promoting and developing XRP ledgers. Ripple-owned XRP cryptocurrency is specially curated as a replacement for SWIFT which dominated the money transfer market space and other major financial institutions.
XRP is a great investment option, it has been consistently ranked in the top ten cryptocurrencies by market capitalization. So, now that you know what Ripple and XRP are, this article will dive deep into the topic and elaborate upon the Advantages, its practice application, and how it is different from the most popular cryptocurrency, the bitcoin.
Advantages of Ripple’s cryptocurrency XRP
One of the unique selling propositions of XRP is that it mediates the exchange for a plethora of cryptocurrencies and fiat currencies, for instance, bitcoin. The company – being a for-profit organization – collects a minuscule transaction fee of 0.00001 XRP, which is significantly low compared to fees collected by major banks for settling transborder transactions.
Another feature that differentiates XRP from most other cryptos, is its Ripple Protocol Consensus Algorithm (RPCA). It regulates a unique node list that users can choose to validate their transfer of money. RPCA is used every three to five seconds by all the nodes for maintaining accuracy and agreement within the blockchain network.
After all the nodes reach a consensus, the ledger is closed. If there are any discrepancies, in such cases the algorithm stops to rectify the errors. The algorithm adds to security and time efficiency in the validation of transactions. However, this makes the Ripple network centralized in some sense. Ripple is a private company that regulates the XRP. However, XRP cryptocurrency is decentralized and is also similar with other cryptocurrencies as well.
Its fast transaction speed of 1,500 transactions per second is one of the fastest cryptocurrencies. With this
Ripple has reached a milestone in blockchain technology. The most popular cryptocurrency bitcoin (BTC), with
its 7 transactions per second, does not even come close when it comes to the fast transfer of funds. Check out
Yuan Pay Group for more information.
Bitcoin vs XRP
● Bitcoin’s transaction speed clocks the time of 7 transactions per second whereas XRP surpasses Bitcoin with a staggering speed of 1500 transactions per second.
● XRP uses a consensus protocol to verify the transactions whereas Bitcoin uses mining. Bitcoin uses a proof-of-work (Pow) system.
● The consensus protocol used in XRP enables it to verify the transactions at a lower cost compared to bitcoin.
● Bitcoin mining takes up a vast amount of energy which contributes to an increase in carbon emissions. On the contrary, XRP requires minimal energy to carry out its processes.
● With a maximum supply of merely 21 million coins, making bitcoin is more expensive due to scarcity. XRP with the maximum supply of 100 billion tokens becomes a more affordable alternative option instead of bitcoin.
Like bitcoin, XRP is a deflationary token, which means that there is a cap on the supply of XRP to maintain its worth. The supply is limited to 100 billion XRP tokens. Initially, Ripple put 55 billion XRP tokens in an Escrow account. The term escrow means a neutral third party, which holds funds and assets during transactions between two parties.
As of October 22nd , 2022, there are 44,300,000,000 XRP tokens in the escrow account. The XRP inside the escrow account is immutable until the escrow has been finished properly. Ripple made 55 escrows in December 2017; each escrow has 1 billion XRP. 1 billion escrow gets expired monthly and the XRP goes back to Ripple. This XRP can be utilized by Ripple or plough back into a new escrow account.