How does Ripple work?
The cryptocurrency XRP is traded on Ripple's distributed ledger. It is secured through what the project calls a public validator. Anyone can be a validator, but unlike node operators in other cryptocurrency projects, this activity is not financially rewarding. Therefore, validators are often institutions that wish to ensure the security of the Ripple network or developers or large investors.
In addition, to participate in securing the network, validators must be approved by their peers. Ripple also recommends trusting the unique list of nodes to validate its transactions. This is a carefully selected list of validators. Of course, in such a context, XRP cannot work with an energy-intensive algorithm like proof of work or what is known as mining, which is used by Bitcoin.
Therefore, Ripple developed a very lightweight algorithm called the Ripple Protocol Consensus Algorithm (RPCA). This means that running nodes consumes very few resources. From a cost perspective, this may reach around ten dollars a month, according to those who have tried the process.
It is worth noting that the blockchain used by Ripple XRP is just one of many solutions developed by Ripple. Among the solutions developed by Ripple are also:
RippleNet, which is a separate infrastructure that combines the following three solutions:
xCurrent:
A real-time settlement and tracking system for international payments between members of the RippleNet network. Traditional currencies or cryptocurrencies can be traded through xCurrent, and using XRP is not mandatory.
xVia:
It is a unified communication system aimed at financial institutions.
xRapid:
A payment system that allows for the instant transfer of currencies via XRP. Payment is converted through the national currency, which in turn is converted to XRP that is sent to the recipient, who then converts it to the currency of the destination country. This type of solution is faster and more economical, and has already been adopted by many banks$XRP
