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Ripple: The new popular cryptocurrency

This is not simply a cryptocurrency, but a company that goes further to facilitate cross-border transactions to different institutions

Ripple: The new popular cryptocurrency

For a couple of years, cryptocurrencies have gained great popularity. Bitcoin and Ethereum, for example, have caused great fascination due to the high volatility of their prices, as well as their high security blockchain technology.

Leer en español: Ripple: La nueva gran criptomoneda

According to The Street, among the cryptocoins with the highest capitalization value are Bitcoin and Ethereum, followed by Ripple. The latter is a name that has been gaining strength in recent months in the world of cryptocurrencies, but what is it exactly?

To start, it is important to clarify that it is a company called Ripple Labs, which has a transfer and payment platform, RippleNet, and this has its own currency, the XRP.

On the platform

RippleNet is a network of institutional payment providers, such as banks and companies, that use solutions developed by Ripple Labs to be able to carry out cross-border transactions cheaply, safely and quickly. It is designed to make transactions easier and easier for banks, making it the most popular option for larger financial institutions.

For example, American Express announced its partnership with Ripple in 2017, which allowed unlimited payments through blockchain from US companies to British companies.

The platform offers several specialized payment systems for the convenience of its customers. Among these are, for example, xCurrent , which is a payment processing system for banks, xRapid , which allows financial institutions to reduce tax transfers to emerging markets using XRP and finally, xVia , which allows the business and companies send their payments via RippleNet.

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One of the benefits of making transactions with this platform is the great speed that they ensure: 4 seconds. This is a great advantage when compared to Bitcoin, which has been criticized for having long durations in transfers, which made it a risk for those who made the payments due to the high volatility of their prices. In other words, it was a danger that at the end of the transaction the same amount of money was not being received for which the process was initiated.

What exactly is XRP?

The XRP is a symbolic tab that is used by the platform to represent value transfers through its platform, which could be understood as a "joker". Its main intention is to be a mediator between currencies, whether of fiduciary money or cryptocurrency. For example, the xRapid service uses XRP as an intermediary in its cross-border payments to maintain liquidity.

This type of aspects makes the XRP unique among cryptocurrencies. In fact, several argue that it should not even be considered as one, because it is not used in itself as a currency. They clarify that it should be considered more as a security method than a currency.

The same CEO of Ripple, Brad Garlinghouse clarified in a conference that did not think about the digital assets of the market, but more in the experience of the consumer. Followed by this he also said that he believed that the XRP should not be a cryptocurrency, so it serves a more utilitarian purpose.

XRP differs from the rest of the cryptocurrencies in different aspects. For example, while Bitcoins are mined, those of Ripple are created by the same company. That is, instead of following the decentralized model maintained by the first one, the XRP does move closer towards a centralized model , which they also use to facilitate their transactions. However, something that does make it similar to the others is its finite amount. There are only 100 billion XRP and no more will be created, of which the company also owns 60%.

According to Daily FX, the currency has gained great value from the end of 2017 until the beginning of 2018. At some point, it even reached just below Bitcoin and above Ethereum, considering the rapid change in the value of these. The page explains how this can be explained in part by the impressive growth of RippleNet.

Currently, an XRP equals $ 0.544133 USD , although its market capitalization is over 21 billion dollars and 3 million bitcoins.

In January of this year it had its greatest reach with a market value of almost 126 billion dollars, with a price of $ 3.28 dollars for each XRP.

 

LatinAmerican Post | Valentina Moya

Copy edited by Laura Viviana Guevara Muñoz

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