What is the XRP cryptocurrency and what is its price?

The cryptocurrency market is vast, as evidenced by the more than 20,000 digital assets that exist today. The segment has grown so much that it has stopped focusing on Bitcoin (BTC) and has expanded to other applications and features. One of the most promising protocols in this universe is Ripple and its native token XRP.

Ripple can be understood as a payment network. It was created in 2004, but only began to gain traction in 2012. This protocol uses blockchain to replace obsolete banking technology, especially when the goal is to process payments.

Are you curious? Read the text below and find out how Ripple and its XRP token work, and whether it is worth investing in.

What is XRP?

While Ripple itself is a payments platform built on blockchain networks, XRP is the native token of this protocol. Created in 2012, this altcoin acts solidly and strongly alongside BTC, Ethereum (ETH) and other cryptocurrencies, being one of the most valuable in the crypto market.

What sets XRP apart from other cryptocurrencies is that it works beyond the blockchain, as the protocol can be implemented in traditional banking and institutional systems.

Furthermore, XRP is generally used by companies in the sector to cover transaction fees between financial institutions. In other words, it functions as a bridge currency: if the bank does not have a certain currency, it uses XRP as a bridge to convert it to another asset.

What is the Ripple payment protocol?

The Ripple payment protocol was created in 2004 and revamped in 2012. This system allows traditional institutions to make payments instantly and faster, as well as streamlining global financial transactions.

Ripple allows compatibility between different tokens, from those representing physical currencies and miles, to gold or any other type of money. In addition to being a protocol that helps enable secure payments, it also operates in the cryptocurrency market.

Advantages of Ripple

Ripple was created with the aim of providing banks with the capacity to compete with cryptocurrencies, as it provides technology so that these institutions can match this new wave of the financial market, which is nothing more than the world of cryptocurrencies and blockchain networks.

Ripple technology allows international payments to be made in real time and at low cost. In other words, this project goes against the ideology of cryptocurrencies, which is to be decentralized and outside the traditional system.

Still, it allows banks and institutions to modernize to offer more agile and practical services to the end customer.

Furthermore, the Ripple network allows the transfer of any currency, be it dollars, euros, pounds, BTC or any cryptocurrency, which does not necessarily make it a competitor to the most famous virtual currency on the digital market.

How is the Ripple (XRP) token distributed?

There are a limited number of XRP cryptocurrencies in existence, around 100 billion. When it was created, 20% of its capacity remained in the hands of its creators, while 80% was donated to charity through an institution called Ripple Labs.

In 2017, a smart contract was created that only allowed Ripple Labs to use 1 billion XRP per month. Today, we can estimate that there are over 40 billion XRP in circulation on the market.

An interesting fact about cryptocurrency is that a small portion of it is destroyed with each transaction. It may not seem like much, but this contributes to the increase in its market value. It is currently estimated that more than 7 million XRP have already been destroyed.

How are transactions validated in Ripple?

To understand how Ripple transactions work, you first need to understand its consensus process, which is nothing more than the way its algorithm works. This algorithm is applied to all nodes in the network in a matter of seconds, which ensures instant agreement across the network.

When consensus is reached, the Ledger (structure that represents the record of a transaction) is considered “closed”, which shows the current state of the network, validating the consensus process.

It is also important to understand that the network has several servers that collect transactions that have not been validated. Therefore, a user – or a specific company that uses the system – can create a list for interested parties to join the validation process if they are interested in contributing to the work.

This validation process occurs after a type of “vote” among all users of the network’s servers.

This way, a transaction can be validated as quickly as possible when compared to other cryptocurrency technologies. We also emphasize that there are several rules that prevent fraud from happening, making Ripple fast and efficient##XRPBackInTop3