Ripple is a real-time payment settling platform developed by Ripple Labs. The same development team is behind the XRP coin which further solidifies their excellence. The Ripple network was designed with the intent to serve the needs of financial institutions such as banks. Ripple can facilitate transactions between different types of currencies, crypto or fiat. Of course, per-transaction fees are present and they have to be paid via XRP.
It was meant to be the replacement for the SWIFT protocol. The standard fee for transactions on Ripple is set at 0.00001 XRP, so it’s easy to see how this network aims to replace SWIFT. By using XRP people will be able to avoid the large fees charged by banks for any cross-border payments.
Below, we’ll explain more about how Ripple makes money and how you can use XRP.
The XRP coin
The XRP crypto was launched in 2012 and it’s crypto unlike any other. Of course, as with many other cryptocurrencies, XRP is powered by a blockchain and its speed allows it to confirm numerous transactions in less than 5 seconds. To further elaborate on its speed, the blockchain can handle more than 1,500 transactions per second, which is extremely fascinating.
The development team also states that with time, they will be able to reach VISA speeds. That’s why it’s worth mentioning that you can buy XRP regardless of your interests in the financial sector. You can try to watch its price fluctuation and possibly capitalize when its value soars.
The XRP coin is available on almost all major crypto exchanges, however, when investing in crypto, know that you can lose a lot of money if the prices dip. So, make sure not to invest more than you can afford to lose.
In general, the benefits of the XRP coin are the following:
- Fast settlements;
- Used by larger financial institutions;
- Low transaction fees.
How Ripple works and makes money
Even though the company is not necessarily a cryptocurrency dealer, they provide the XRP coin which runs on the XRP ledger. The developers created a network to solve the problems that come with international trade. Usually, it takes international transactions 3-4 days to complete, which can be very bad for business.
Ripple Labs’ first product is called RippleNet, which uses a unique consensus model called a unique node list. Its main goal is to completely replace the slow SWIFT transaction protocol and to stop fraud from occurring. Large financial institutions entrust Ripple Labs with their security and transaction protocols. This is one of the ways the Ripple developers make money, but there are other ways as well.
Is it really decentralized?
One of the main reasons why cryptocurrencies have become so popular over the past 15 years is their decentralization. Decentralization means taking away the control banks, governments and other institutions have over finances.
Generally speaking, decentralization means that the coin is created for people by people. However, Ripple has a list of validators that the developers trust and they decide what gets added to the blockchain and what does not.
How you can use XRP
You can use the XRP coin just like you would any other coin on the market. You can make purchases online or trade with fellow crypto enthusiasts and aim to make profits. On top of that, if you are interested in making transactions, you can use the Ripple network to make transactions anywhere in the world.
Should you invest in XRP?
Most crypto aficionados get into the market due to the decentralized nature of certain coins. However, since XRP is not on the list of fully decentralized digital coins, most traders will simply gravitate toward others.
Of course, XRP might have something that you personally find alluring, and following your gut feeling can sometimes lead you to great profits. Either way, consider informing yourself more regarding this particular digital coin and its development team before making the leap.
Bottom line
By now, you ought to know who’s behind the Ripple network and how they operate and obtain profits. The XRP coin is an extremely important aspect of the whole Ripple network. However, it’s important to mention that the XRP coin can survive even without the XRP network, so investing in it can be done regardless of your interest in international transactions.