1. What is XRP Coin?
XRP is the token used to represent value on the Ripple network. The XRP coin is built specifically for institutions and businesses to have liquidity in cross-border transactions.
- Banks and financial institutions can use the XRP token to transfer money across borders instantly.
- Payment providers can use XRP to enhance payment speed, connect to other markets, and reduce foreign exchange costs.
- The XRP token is also widely traded on popular cryptocurrency exchanges today.
2. The history of XRP Coin
An interesting fact that few people know about Ripple is that this project is older than Bitcoin. It started in 2004, with its creator Ryan Fugger, who developed the first prototype of Ripple as a decentralized digital currency system (RipplePay).
This system became operational in 2005 with the goal of providing secure payment solutions in a global network.
Then in 2012, Jed McCaleb, Arthur Britto, and David Schwartz joined and implemented Ryan's idea through a company called OpenCoin, with many functions similar to Blockchain.
From that point, Ripple began to be built as a protocol focused on payment solutions for banks and other financial institutions. In 2013, OpenCoin was renamed Ripple Labs, and then renamed to Ripple in 2015.
Ripple's protocol was built by the company OpenCoin - with Chris Larsen as CEO and Jed McCaleb as CTO. McCaleb came from the Mt. Gox exchange, and Larsen was a co-founder and leader of the financial company E-LOAN. Meanwhile, other members of Ripple are very knowledgeable about the Bitcoin platform.
3. Where does the value of Ripple lie?
Technologically, the real value of XRP lies in the system, and this has been proven with over 100 banks registered for use, including American Express. However, many believe that the XRP coin has no real value and is merely speculative.
There was previously information that Ripple planned to eliminate the XRP coin, but due to the impact of the cryptocurrency boom in 2016, this plan was abandoned.
Currently, there are 100 billion XRP coins issued, and Ripple's team assures that they will not issue more XRP, but in reality, no one can stop them from 'printing' more in the future.
Ripple's transaction processing speed is just 3.5 seconds through XRP, making XRP valuable and usable. However, the use of XRP is completely independent of the Ripple system, meaning banks can still transfer USD, EUR without needing XRP, and this is something many investors buying XRP are unaware of.
XRP does not represent any value; its existence is neither necessary nor detrimental.
6. Ripple's technology and products
- XRP Ledger (XRPL)
XRP Ledger - The XRP Ledger (XRPL) is the predecessor of the Ripple Consensus Ledger (RCL) implemented by Ripple in 2012.
XRPL operates as a distributed economy. The XRP ledger not only stores transaction information but also provides trading services for many currency pairs.
XRPL is open source, allowing for real-time transactions. These transactions are secured and verified by network participants through a consensus mechanism.
However, unlike Bitcoin, the XRP Ledger (XRPL) does not operate on a Proof of Work consensus algorithm. Therefore, it does not rely on the process of validating blocks to verify transactions.
Instead, the network achieves consensus through the use of a consensus algorithm - previously known as the Ripple Protocol Consensus Algorithm (RPCA).
XRPL is managed by independent validating nodes that continually and directly reconcile transaction records. Anyone can set up and start a Ripple Validator node.
Furthermore, you can select trusted nodes to act as valid validators.
However, Ripple advises users to only use a list of identified and trusted nodes for validating transactions to ensure transaction safety. This list is called the Unique Node List (UNL).
In addition, since XRPL is an open-source distributed ledger, anyone can contribute to the code. Thus, XRPL can continue to operate even if the company ceases to exist.
- RippleNet
In contrast to XRPL, RippleNet is a proprietary product of Ripple. They are built on the XRPL framework.
RippleNet currently offers three main products: xRapid, xCurrent, and xVia. They are designed as a payment solution for banks and financial institutions.
- xCurrent
xCurrent uses a distributed ledger called Interledger developed by Ripple but is currently managed by a non-profit organization that maintains international web standards worldwide, known as the World Wide Web Consortium.
This solution is currently the most widely used on Ripple's platforms with the participation of over 100 major financial institutions worldwide. Many of them have completed the testing phase and are using xCurrent for direct transactions.
xCurrent currently only works well with global payments involving highly liquid trading pairs such as the EURO/USD or USD/JPY...
- xRapid
xRapid was created to support less liquid payments, leveraging the XRP token to provide liquidity. This is done by converting money into XRP and then into the funds that will be the beneficiary.
This allows the issuing bank to avoid having to hold funds in the correspondent bank's account in the beneficiary's country or relying on another financial institution to provide the beneficiary bank with the exact amount in local currency and associated costs.
There are now several payment providers like Western Union and MoneyGram using xRapid.
- xVia
xVia is a user interface designed to make xCurrent and xRapid easier to use. Through API integration, it provides connectivity for financial institutions using Ripple's products as well as tracking payments and creating invoices.