Few people know that, Ripple is an even older project than Bitcoin. There was a time when Ripple had the 3rd largest market capitalization on Coinmarketcap after Bitcoin and Ethereum. So, what is Ripple, how does this currency work, let’s find out with 5ROI Global through the article below.
What is Ripple (XRP)?
Released in 2012, Ripple was recognized as a real-time aggregated payment system, as well as a currency exchange and remittance network. In essence, Ripple allows connecting banks around the world, thereby promoting cross-border transactions and payments.
The establishment of Ripple is based on the idea of a distributed countable network, where participants can verify transactions instead of a single centralized party. It is also the key to making transactions convenient and fees lower than Bitcoin.
What problem does Ripple solve?
Derived from the limitations of the market at that time, Ripple was built and developed by the founders with the desire to overcome the dilemmas of speed, cost, and success rate of transactions. Specifically:
- Speed: Cross-border payments usually require some intermediary and can take 3-5 days. With the help of Ripple, this process will be shortened to only 5-10 seconds.
- Cost: By offloading middlemen, Ripple can reduce transaction costs by up to 60%.
- Transaction Success Rate: Cross-border transactions typically have a failure rate of 4%. To solve that, Ripple will track all payments made and stop any potentially failed transactions before it happens.
Ripple’s Operational Structure
The structure of Ripple has three main elements: xRapid, xCurrent, and xVia.
xRapid is an on-demand liquidity solution. This system uses XRP as a bridge to global fiat currency pairs. Compared to traditional methods, xRapid can make transaction confirmation times fast and costs many times lower thanks to its operation based on XRP Ledger.
Built around the Interledger Protocol (ILP), xCurrent is a solution designed to provide instant settlement and tracking of cross-border payments between members.
xCurrent includes 4 basic components:
- Messenger: used to exchange information regarding risk and compliance, fees, FX rates, payment details, and expected transfer times.
- Validator: used to confirm the success or failure of a transaction by cryptographic techniques and coordination in money transfers on Interledger.
- ILP Ledger: used as a secondary ledger to keep track of credits, debits, and liquidity between transacting parties.
- FX Ticker: used to determine the exchange rates between trading parties. It monitors the current status of each configured ILP Ledger.
As an API-based standardized interface, xVia allows parties to interact within a single framework without having to rely on multiple payment network integrations.
Information about XRP
XRP is the official token that works in the XRP Ledger. Some basic parameters of the XRP coin are as follows:
- Ticker: XRP
- Blockchain: XRP Ledger
- Token Type: Utility Token
- Avg. Block time: 4 seconds
- Avg. Transaction Time: 1,500+ TPS
- Total Supply: 99,989,535,142 XRP
- Max Supply:100,000,000,000 XRP
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Above is some general understanding of Ripple and XRP. Hopefully, after this article, you will have more knowledge to support your decision-making. Don’t forget to follow https://www.5roi.com/ to update more information!
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