Ripple: Everything that you need to know
In 2012, Ripple put in place both a digital 'Cryptocurrency' (XRP) and a payment system of the same-name. After not even five years, this payment system has begun to be implemented by the world's largest banks and the digital currency has reached a market value in the billions of dollars. Why is ripple so extraordinary, and why shouldn't we consider it to be another real cryptocurrency? In this article you will learn everything you need to know about ripple.
- What is Ripple?
- XRP is not encrypted!
- Ripple vs bitcoin and other cryptocurrencies
- Buying Ripple Coins (XRP) - How to trade ripple?
- How to choose a ripple wallet?
- XRP and EUR - What is the rate and price of ripple?
What is Ripple?
Ripple is a digital currency designation (XRP) and the global payment network in which the currency is used. The Ripple network was set up in 2012 to free up internet payments from currency exchange, transaction processing and other causes of significant delays in sending and receiving payments. The ripple digital currency acts as a "transfer currency" to other currencies in the payment system, meaning it does not differentiate between traditional currencies (USD, GBP, EUR) and cryptocurrencies, making it much easier to exchange any currency.
Our XRP article only serves to inform you about what this token is and how it works. As a private product of Ripple Labs, XRP has nothing in common with cryptocurrency and decentralised monetary systems. XRP is only a transaction comparison tool used within the private networks of companies and institutions that use this product. It is remarkable that XRP is traded on the market at all, let alone that it has recently been presented by some people as an amazing investment and valuable trading comodity like Bitcoin or Litecoin.
Keep in mind that while Bitcoin and Litecoin are decentralised monetary systems that are built on the concept of Proof of Work (the cost of consumed electricity, purchased hardware, and invested human labor), XRP has not been built on anything and thus has a purely speculatory value. 100% of XRP is internally premined, which goes against the nature of decentralised cryptocurrencies, which are gradually mined by any who would like to perform Proof of Work.
As XRP is premined, the owners and creators of this token have the option of retaining their shares - roughly 60% of the total supply is controlled by a few individuals, and could be entered into the market if those individuals so desire. More than 60 billion XRP (out of a total of 100 billion) is held by Ripple Labs.
On the other hand, it is worth mentioning that that amount is under a time lock through an escrow smart contract, whereby the XRP coins are not to be made immediately available, but are gradually released to the owners in well-defined quantities within a given period of time. This protection is to ensure that the market will not be flooded with a vast amount of XRP at one time, which could be used toward market manipulation.
The high demand that is causing XRP to increase its price has also enormously increased the wealth and power of a handful of individuals behind the Ripple project. As of January 4, 2018, those who wanted to ride the wave of cryptomania through XRP made Ripple Lab's owner one of the planet's richest people within a few weeks, without actually using his product. However, remember that a traincrash hurts the train's driver the most. And for those of you who know the series "Mr. Robot", I have had a small wtfmoment. Who knows what Sam Esmail, the creator of the series, wanted to say there?
Michal Mikle
I'm an overclocker and enthusiast Bitcoiner. With computer hardware, any unused performance won't keep me calm. If there is the possibility of squeezing another drop of power from the hardware, I won't miss it. I love the adrenaline and pushing the limits, of the components and myself. This activity is rich with choices, but I mainly use liquid nitrogen and phase-change methods. I also set up a service to optimise Intel processors, delid.cz, building custom PC setups on demand and I enjoy security and privacy topics. Outside the digital world I'm interested in permaculture and other low time preference systems.
Ripple vs Bitcoin and other cryptocurrencies
Similarly to Bitcoin, Etherea, Litecoin and other cryptocurrencies, Ripple is based on a decentralised blockchain, capable of retaining an ever increasing amount of data. The main difference, however, is that the above-mentioned cryptocurrencies are generated by a mining process, whereas all ripple coins have been constructed within the network.
At present, there are approximately 100 billion ripple coins, with no more to be made. However, most of these ripples are owned by Ripple Labs, which created the payment system and the Ripple digital currency. Because of this, Ripple has to be looked at differently from other systems - its close connection to one individual company undermines the decentralised nature of the cryptomarket and contradicts the basic idea of "cryptoanarchism".
Thanks to its lack of a consensus-based payment system, payments in the Ripple Network are virtually instantanious and carry minimal fees. In the overloaded Bitcoin network, where transaction fees at one time climbed up to tens of Euros, you only wait for a few minutes to confirm your payment.
Buying Ripple Coins (XRP) - How to trade ripple?
As ripple cons can not be physically exported, the only way to get to the currency is to buy through an online ripple-supporting exchange (BitStamp, Kraken, GateHub). However, trading on these exchanges and through exchange offices is usually subject to a thorough authorisation process, where it is necessary to provide a copy of your ID and sometimes a document with your name and address.
XRP is most commonly exchanged for dollars (USD), euros (EUR), or bitcoins and other cryptos. An overview of all exchange offices where ripple can be purchased can be found along with some detailed instructions on the official Ripple website.
How to choose a ripple wallet?
Ripple, as a digital currency, has no intrinsic value in itself - you can not use it to pay for anything, anywhere. So, if you buy XRP and want to speculate on value development, you'll probably want to keep your money in ti for a while. On computers or online wallets, however, digital currencies are constantly under attack by hackers and a variety of malicious malware.
The safest way to store ripple is, therefore, in a hardware wallet. These keep your cryptocoins in a secure encryption device outside the PC, thus isolating them from the influence of third parties. For example, Ledger Bitcoin Wallet Nano S is a hardware wallet that supports ripple. Popular classic wallet softwares include Toast Wallet and Rippex.
XRP and EUR - What is the rate and price of ripple?
The Ripple network is becoming more and more popular as a payment platform. Ripple is being implemented by large multinational banks around the world and many experts forsee a great future for the digital currency. However, given that the XRP's course, like other cryptos, is governed by the basic principle of supply and demand, and at the same time the majority of the currency is contained within a single company, it is not a risk-free investment. Theoretically, if Ripple Labs were to release all their coins at the same time, the value of the currency would drop significantly due to the excessively high supply. The current course (CPC) for a 1XRP purchase can be found below in the interactive chart.
Interest in Ripple is, at present, enormous and it will be very interesting to see what this fact will do to the future value of XRP. Sign up for further developments in this network.
