Designed for the financial services industry, Ripple is a money transfer network. In terms of market capitalization, XRP, a cryptocurrency designed to operate on the Ripple network, is consistently ranked among the top five cryptocurrencies.
As a result of legal issues with the Securities and Exchange Commission (SEC), Ripple’s XRP has seen a significant increase in value in comparison to other cryptos. A global payments settlement system and currency exchange network, Ripple is capable of processing international transactions in real-time. Between two parties in a transaction, Ripple acts as a trusted intermediary, as the network can quickly confirm that an exchange took place. In addition to fiat currencies, Ripple facilitates the exchange of cryptocurrencies like Bitcoin and commodities like gold.
‘Ripple was designed from the very beginning to be a replacement for SWIFT,’ says Pat White, CEO of Bitwage.
In exchange for using the network, users are required to pay a small fee in XRP, a cryptocurrency.
According to El Lee, a board member of Onchain Custodian, the standard fee for transactions on Ripple is set at 0.00001 XRP. Accordingly, the transaction fee is $0.0000138 as of late April 2021, when the XRP price stood at $1.38 per token. The cryptocurrency called XRP, which runs on the XRP Ledger, a blockchain engineered by Jed McCaleb, Arthur Britto, and David Schwartz Both McCaleb and Britto would go on to found Ripple, which makes use of XRP to facilitate transactions on the network. In addition to being an investment vehicle, XRP can also be used to finance transactions on the Ripple network.
There are some notable differences in the way XRP’s blockchain operates compared to most other crypto assets. Unlike other cryptocurrencies, which allow anyone who can solve complex equations quickly to access their transaction ledgers and verification processes, Bitcoin’s transactions are secure because the majority of ledger holders must agree to verify them before they can be added to the ledger.
As a result, the Ripple network of XRP centralizes some things. Even though anyone can download its validation software, the company maintains what it calls unique node lists that users can use to verify their transactions based on which participants they believe are least likely to defraud them. Currently, 35 trusted validators are included in its default list. As well as approving which validators to include on this list, Ripple creates six of these validation nodes itself. To opt-out of this default list, users would need to create their list of trusted validators. The Ripple network of XRP centralizes some things. Even though anyone can download its validation software, the company maintains what it calls unique node lists that users can use to verify their transactions based on which participants they believe are least likely to defraud them.
Advantages of Ripple Technology
- XRP was created by Ripple to be a speedy, less costly, and more scalable alternative to both other digital assets and existing payment platforms.
- Settlement is expedited.
- Incredibly fast confirmations of transactions are provided. For example, a bank wire transfer can take days, while Bitcoin transactions can be verified in minutes or even hours.
- They’re incredibly cheap! Costs for transactions on Ripple are as low as 0.0001 Ripple, or about a penny at current exchange rates.
- This is a very flexible network. Other fiat currencies, cryptocurrencies, and commodities can also be transacted on the Ripple network in addition to XRP.
- The largest financial institutions use this method of accounting. Ripple can also be used by large enterprises as a transaction platform.
Future of XRP
The SEC lawsuit against XRP is the most important factor in determining XRP’s future value. It is environmentally friendly, and it continues to make rapid progress throughout the year, despite its relatively short lifespan. Because of this, XRP’s price will likely reach its all-time high again once the recent market crash is over and the bull cycle has begun.
If it reaches a low at the end of the year, it may remain bearish and trade between 0.6 and 1 USD in the coming year, according to Bloomberg. In contrast, if it reaches new highs at the end of the year, XRP holders will benefit greatly, and it may even reach 2 dollars. Other factors that influence the XRP price include the Ripple-SEC lawsuit that is expected to last until 2022, and its favorable outcome, which could propel XRP near its all-time high and result in huge gains.
Assuming that it loses the lawsuit, its value could fall below 0.5 USD. In the long term, it is expected that the company will work with more institutions and American banks, which will result in significant price changes.
If xrp rises to 1.5 dollars this year, it could reach a record high at the end of 2022. coin switch predicts that by the end of 2021, it could be worth $2 and by 2025, it could be worth $5.
As a result, it could take up to 3-5 tears to reach a total value of $5. In less than 10 years, xrp could reach an all-time high of 8-10 dollars. They’re all dependent on market stability and the Ripple SEC lawsuit.
XRP’s blockchain operates differently from most other crypto assets. Bitcoin transactions are secure because a majority of ledger holders must agree to verify them before they can be added to the ledger, unlike other cryptocurrencies that allow anyone who can solve complex equations quickly to access their transaction ledgers and verification processes.
Some things are centralized in the Ripple network of XRP as a result of that. Its validation software is available to anyone who wants to download it, but users can still use node lists to verify their transactions based on which participants they believe are least likely to defraud them, the company says. A default list of 35 trusted validators is available. It also creates six of these validation nodes, after approving which validators to include on this list. As an alternative, users could create their list of trusted validators by hand.