Wonder what Ripple is, and why is it is becoming popular? You don't have to look any further, because this is exactly what I will explain in this article. The kings of the cryptocurrency hill are Bitcoin and Ethereum. However, Ripple is the third most expensive cryptocurrency, with $31.36 billion in total market capitalization. Huge, huh? Ripple, is more of a centralized cryptocurrency inside a somewhat decentralized environment, making it one of the most interesting considering its divergence from other crypto-norms.
So, let's get started now!
Originally founded by a single company, Ripple Labs, Ripple continues to support it, rather than a larger network of developers that continues to develop Bitcoin. It also has no fluctuating amount of its currency in existence.
What makes Ripple unique?
Backed by banks
Although Bitcoin and other cryptocurrencies are built on the concept of separating financial transactions from traditional currency commercial entities, Ripple is essentially the opposite in every sense. It is sponsored by over 100 financial institutions in the world including Santander, UBS, American Express, RBC, Westpac and have a hand in their service and distribution. Given that banks are the biggest users of Ripple, the question is - can Ripple be abused?
The initial idea of cryptocurrencies was to eliminate centralized agencies such as banks and create a truly decentralized system. Well, Ripple Labs Inc., the company behind Ripple XRP, owns more than half of the 100 billion XRP that will ever exist. This leads to some of the same old problems that centralization carries. One entity, Ripple Labs, for this situation, turns out to be excessively ground-breaking.
Now, you should realize that Ripple is not a standard cryptocurrency like Bitcoin or Ethereum. XRP provides a range of advantages such as:
Group Small transaction fees
The cost of a regular transaction for the Ripple protocol is approximately 0.00001 XRP. The cost of 1 XRP is currently around $0.69. It means that the processing cost is so small that it's basically free!
Fast transaction pace of around 4-5 seconds
Ripple transactions are not only faster than traditional payment methods but also faster than other cryptocurrencies.
Handled by an efficient team
Ripple is being driven by an entirely skilled group with a decent blend of understanding and experience. In a young industry like digital money where things are not yet unmistakably characterized, a decent group can truly have a significant effect.
Final Words
There are a few cons as Ripple is focused on large cooperations and is centralized. For now, Ripple doesn't offer much to sell to an end-user like you or me. Many of Ripple 's services have been planned with banks and payment providers in mind. You 're not going to see any change in sending or receiving payments anytime soon. Ripple is a cryptocurrency intended to address problems related to cross-border money transfers. Now you know about one of Ripple's main issues — decentralization. Thankfully, Ripple Labs has started to take steps to 'decentralize' Ripple.