Ripple XRP for beginners
Since its launch in 2012, XRP has remained one of the world’s leading cryptocurrencies. XRP is the native asset of the XRP Ledger, which is used by US technology company Ripple to facilitate fast, reliable, and affordable cross-border transactions.
Ripple and XRP are two very different things. Ripple is a San Francisco-based technology company aiming to develop streamlined cross-border payment solutions. Ripple has offices in New York, Sydney, Singapore, and other cities around the world.
Ripple have their sights on a more efficient, affordable, and reliable global settlement network that can support large transactions between financial institutions. The Ripple payment protocol enables users to transfer money from one currency to another in seconds wherever they are in the world via a network of peer-to-peer servers.
XRP is the native digital currency that facilitates transactions on the Ripple network. XRP acts as a bridge or mediator between two currencies being transacted and can be a source of liquidity if needed. XRP can also be thought of as the joker card – the card that can stand in as any other, whether that be fiat or crypto.
The maximum number of XRP is 100 billion. All XRP tokens have been created – XRP isn’t mined like bitcoin and other cryptocurrencies. As of December 2018, less than half of all XRP is in circulation, with the remaining held by Ripple. Up to 1 billion XRP will be released by the company every month for a period of 55 months.
RippleNet is the network of institutional financial service providers that use Ripple’s payment protocol to send money globally, including digital asset exchanges, banks, money services businesses, and corporate entities.
Here’s a quick example to demonstrate how the Ripple payment protocol works. Let’s say Alice in Sydney has a ticket to the ballet in New York that she doesn’t want. Instead, she’s very interested in a silver bell. Ben, who lives in New York, has a rare model train he’s looking to swap for a ticket to the ballet. Finally, Candy in Tokyo is on the hunt for a rare model train and has a silver bell to barter with.
In traditional exchange systems, these three people would probably never find each other. With Ripple, they can say, “I have a ballet ticket and want a rare stamp,” and the network will find the shortest and cheapest combinations of trades to make that happen, using XRP to transfer one currency or asset to another.
What’s more, the platform facilitates payments in any currency – fiat or digital – with a very small transaction commission of 0.00001 XRP. This protects the Ledger from being disturbed by spam and denial-of-service attacks.
Although most crypto wallets are free to setup and use, XRP wallets require users to have a minimum balance of 20 XRP, which is used to reserve their wallet address.
Find out how to choose a suitable and secure XRP wallet here.
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