Bitcoin is the most famous cryptocurrency in the world. However, did you know that it’s not the only crypto being considered for widespread acceptance?
The big players in our economy — mainstream companies, the banks, the government — have all thought about adopting cryptocurrency in some way.
So far, they have been reluctant because cryptocurrency is seen as anonymous and volatile.
However, there is one crypto that stands out from the crowd. This is because of its high point of difference.
There are many unique things about this crypto — its speed, its reliability, and its ability to run on a centralised network.
This cryptocurrency is called Ripple.
What is Ripple?
Ripple is two things — it is both a currency and a platform.
It runs on RippleNet, an open-source protocol which enables fast and cheap transactions, which are done in real-time.
In other words, there is no waiting needed. This is because transactions are processed and delivered within 3 to 5 seconds.
Ripple’s currency — known as XRP — acts as a mediator. It can be used to exchange XRP to USD. XRP uses RippleNet’s platform to transfer over the internet.
In addition, they have also introduced something new on their platform. It’s called Xpring. It provides unique tools and services, giving developers the ability to integrate payment options into apps.
How is Ripple different from Bitcoin and other cryptocurrencies?
The vast majority of the cryptocurrencies are decentralised.
However, Ripple is centralised.
Source: BlockChain ResearchGroup
A decentralised cryptocurrency like Bitcoin uses many computers to operate and trade the coin. The whole blockchain network is run by people mining and verifying the blocks of the transaction.
Ripple is different. It doesn’t use the blockchain. Instead, it has a centralised mechanism running through a network of servers. This determines the authenticity of a transaction before validating it.
Cryptocurrency mining — where Ripple is different from Bitcoin
Bitcoin mining happens when a person starts a transaction. This creates what’s known as a block. It contains information like the sender’s identity, receiver’s identity, along with the amount that needs to be transferred.
After this block has been created on Bitcoin’s network, all users worldwide will be using computing power to mine and verify the block. They will get rewarded with a piece of every block that they contribute to.
They get rewarded by a fraction of what is left in the Bitcoin mining pool, which is around 3 million as of 7 October 2019.
However, Ripple is different from Bitcoin. Ripple already has everything pre-mined before being put into circulation.
This means that the founders of Ripple own a decent percentage of the coin. This is done to create stability within the currency, allowing them to set the value of it.
The additional benefits
Above all, Ripple uses a vast network of servers that go through one central authority when processing a transaction. These servers decide on the authenticity of the transaction before validating it.
As of 7 October 2019, the total supply of Ripple is 100 billion. However, the total circulating supply is 43.1 billion. Ripple shareholders own over 50% of this.
You may be thinking that these shareholders can flood the market when the price goes up. However, Ripple has smartly put 55 billion XRP in a secured escrow account.
With this in place, every month, Ripple is only allowed to release up to 1 billion. This policy keeps the market stable and secure.
Ripple’s partnership with big mainstream companies
Ripple has partnered with some big mainstream companies, like American Express and Moneygram.
However, these two companies did not integrate Ripple’s currency, XRP. Instead, they integrated their platform, RippleNet, to enable fast cross-border payments in real-time.
Now, here’s the big question: if people are integrating the RippleNet platform, then what use will they have for the XRP cryptocurrency itself?
Here’s the benefit. XRP uses RippleNet’s platform to make payments from one XRP holder to another. In other words, this is a high point of difference from other cryptos — the instantaneous speed of transactions.
The rise of BitPay
As of 2 October 2019, a payment processor called BitPay had announced its partnership with Ripple. Therefore, they will be using Ripple’s platform, Xpring, to integrate XRP payments on their system.
This may be a game changer for Ripple. This is because no other cryptocurrency under BitPay can process a transaction as fast as Ripple can.
Companies that use BitPay as an alternative payment option are Microsoft, Amazon, Flight Centre and many others.
If Amazon and Microsoft start to accept XRP Ripple’s currency as a payment option, this might just pave the way for Ripple’s bright future.