What Is XRP? A Simple Explanation of Ripple Cryptocurrency

Altcoins came in existence 11 years ago, in 2011, right after the first cryptocurrency, Bitcoin, was introduced to the world. But Bitcoin was not a perfect currency. Despite its innovativeness, the transaction speed was slow, due to the overload of the network. Therefore, it resulted in a direct challenge to create other digital currencies to battle the problems Bitcoin couldn’t.

A year later, in 2012, Chris Larsen and Jed McCaleb founded and launched another digital payment system with a blockchain basis, Ripple. The main goal of the system is to settle payments, help exchange assets and provide a fast and reliable remittance system. In fact, Ripple received such a positive response in the world of digital finance due to its resemblance with the SWIFT system, allowing to transfer funds quickly and safely. Ripple is the name of the network and an official title of this network’s cryptocurrency, with a ticker XRP. The XRP price today is fluctuating around $0,5185 per coin with $25,846,931,684 market capitalization. 

How does XRP work?

The Ripple ecosystem operates based on the XRP Ledger decentralized network. Among its advantages are high transaction speed and low transfer fees. 

  • According to the official website, XRP Ledger is suitable for microtransactions in applications, NFT, and DeFi-protocol deployment, as well as for issuing stablecoins and CBDC. In addition, “traditional” assets such as securities or fiat money can be tokenized in XRPL.
  • The main developer of the XRP Ledger is the nonprofit XRPL Foundation, founded in the fall of 2020. Significant blockchain users include the BitPay processing service, the BitGo custodian, and the Forte blockchain gaming platform.
  • The network uses a proprietary consensus algorithm called the XRP Ledger Consensus Protocol.

XRP Ledger runs on nodes managed by validators. As of August 16, 2022, more than 130 validators are active in the network, 35 of which are members of the so-called Unique Nodes List. This group is responsible for activating changes that are added to the protocol. The current status of the network can be viewed on the XRPScan website.

XRP history and price history

Today, cryptocurrency ripple is profitable for use in financial institutions. It is an alternative system for optimizing payment transactions. Interestingly, Ripple is much older than bitcoin. Even though it appeared on the market in 2011, the process of its development started in 2004. Ryan Fuger was engaged in the development of interbank transfers. Unfortunately, in 2004, the program’s release did not end with success. Only seven years later, Ripple got a second chance for a successful launch. New protocols were perfected which allowed for making transactions very fast. The exchange took place in fiat and digital currencies. And in 2014, it was decided to connect the platform with traditional  banks. The company concluded the first contract with a German bank in Munich. The absence of transaction fees attracted the bank. In some cases, the amount per transfer was minimal. This kind of approach allowed the cryptocurrency to gain a foothold on the market.

Today’s ripple price history shows the dynamic of the cryptocurrency. Investors can see the dynamics of change and understand the reliability of the investment. In 2022, ripple coins have a sound reputation and a backing from the crypto community. 

The Ripple Perspective

Forecasts from TradingBeasts analysts about the rate of XRP for 2023 are optimistic. Having started the year at $0.9743, the average projected value of the coin can reach $1.01 by December. Relatively high volatility is expected throughout the year. No sharp growth is expected, but a steady upward trend is always a positive factor for investors.

How to trade Ripple

The first thing to look at is the performance of the digital currency. For that, we look at the Ripple Chart. Here is the long-term perspective. In addition, a short-term development, such as a daily or weekly chart, is recommended for short-term investors or CFD (Contracts for Difference) traders. In addition, it is important that the XRP coins be separated from the Ripple network. If positive news about Ripple is associated with the network, the price will not automatically increase.

When you choose a Ripple trading partner, you should pay attention to the commissions that may be charged. They may not just occur to the order itself. There may also be an exchange rate surcharge if you trade with a broker in U.S. dollars. Then your euros have to be exchanged first. To create an XRP wallet, you must keep your secret key safe. Some crypto investors have already lost a lot of money because they can no longer access their coins.

A feature of Ripple is that financial institutions rely on the protocol. Thus, it is a concept that does not reject the current monetary system but improves on the well-known SWIFT banking system. Ripple’s goal is to make transfers faster and cheaper. It is because XRP goes its way that the coin is attractive to invest in.

This article was written by roged01