What makes Ripple a unique player in the crypto jungle?

Ripple is a great presence in the crypto jungle, and it has the potential to change global finance forever. But what makes Ripple so unique? Well, Ripple has managed to reach a good combination of practicality and technological innovations so that it can develop solutions for every challenge that can be present in the traditional financial system. Ripple has its own native token, XRP, which bridges the gap between the digital realm and traditional finance. This has enabled this digital coin to overcome some of the main challenges for individuals worldwide. Because of this, people want to buy Ripple to take advantage of its cost-effectiveness, efficiency, and scalability features.

We will learn more about Ripple in this article, so keep reading to find out more.

What exactly is Ripple?

Ripple is a digital payment network  working thanks to blockchain technology, which has its own cryptocurrency, XRP. The men behind the development of this network are Jed McCaleb, David Schwarts, Arthur Britto, and Chris Larsen, who developed the XRP Ledger, together with the XRP token. Ripple remains the company’s name, even though this term is currently also used for its native token, XRP. Ripple Labs wanted to use blockchain technology for Ripple’s infrastructure to respond to the shortcomings of Bitcoin, being thus created to offer a cost-effective, faster, and more efficient way to deal with cross-border transactions. 

The majority of crypto blockchains work either with a Proof-of-Work (PoW) consensus mechanism or a Proof-of-Stake (PoS) model, but Ripple differs a little from this, as it functions with the help of a quorum-based consensus mechanism, the Ripple Protocol Consensus Algorithm. This allows individuals to participate in the validating process and agree on a set of transactions from the digital ledger until they reach the majority agreement. 

What are the main advantages of XRP, the native cryptocurrency of Ripple?

XRP has many advantages, making it stand out from all the other digital coins. The main features of this digital coin are cost-effectiveness, speed, and scalability. Because of this, XRP is seen as a better alternative to other digital coins or traditional financial services, which can come with extra fees, intermediaries, and longer waiting times. 

Ripple is a very fast platform that manages to process transactions in a matter of seconds, ranging around 3-5 seconds, better than Bitcoin, which needs around 10 minutes to process a transaction. XRP has this fast attribute because it doesn’t work with mining. Mining is a process from a PoW consensus mechanism, where users need to validate transactions and add new blocks to the network by solving challenging mathematical problems. However, this comes with high electricity consumption, which makes the other digital coins look for something else to be more sustainable and environmentally friendly. With the Ripple Protocol Consensus Algorithm, Ripple can settle around 1,500 transactions per second, offering an advantage over the other digital coins.

Another benefit of XRP is that it has a low transaction cost, around 0.00001 XRP, which is much lower than the fees associated with Bitcoin, ranging from $25 to $50. So, companies that decide to make transactions with XRP, especially cross-border payments, can meet a long list of advantages they can profit from. XRP Ledger is also scalable, and while it can now process around 1,500 transactions per second, things can improve in the future when this digital coin might scale up to 50,000 TPS. With other improvements and upgrades, the Ripple network can remain performant while it grows in popularity and reduce the chances of experiencing network congestion. 

What are the use cases of Ripple?

RippleNet is a payment network mainly used for financial institutions, while the XRP ledger can help individuals worldwide benefit from faster and cheaper cross-border transactions. So, users can send their XRP to the wallet address and receive their digital coins immediately, which can later be traded. However, the XRP Ledger doesn’t only offer this possibility, as it is also a platform that supports smart contracts and custom tokens, which is why it can also be used to build decentralized applications. Because the XRP Ledger has an open-source protocol, developers and companies can create payment solutions and benefit from features like multi-signature wallets, payment streaming, and escrow mechanisms. With the help of these tools, businesses can leverage the potential of blockchain, get everything they need to develop better products and use automated payment systems. 

What can the future of Ripple look like?

Ripple will surely continue to expand in the future, as the Ripple Lab can look for more solutions to improve its offerings. For example, the company wants to be a viable solution for Latin American and Asian markets that deal with problems regarding their national currencies, like devaluation and higher fees while transacting. And XRP can be exactly what they need to meet new opportunities and enjoy faster and cross-border payments.

The XRP Ledger could also be used for central bank digital currencies (CBDCs), which could use Ripple’s infrastructure. Other than this, Ripple could also focus more on smart contracts and tokenization so that it can offer more to its customers. So, suppose the Ripple company manages to add more improvements for DeFi applications, NFTs, and institutional asset trading. In that case, XRP can potentially transform into a powerful blockchain ecosystem that could attract more attention than currently. 

Last words

Since it was first created, both XRP and Ripple have represented important players in the crypto realm, which could bring a long list of advantages to this space and improve some issues forever. Ripple is a vital asset for cross-border systems that brings numerous advantages to the game, such as lower costs, rapid transaction speed, a unique consensus mechanism, and various use cases. This has made plenty of individuals and investors turn their attention to Ripple, as this platform has managed to find the perfect balance between technological advancements and overcoming traditional financial hurdles. This is why Ripple will continue to remain a viable solution in the future as well.