Three Minutes to Understand the Mainstream Cryptocurrency Ripple (XRP)
I. Basic Concepts
Ripple is a virtual currency issued by OpenCoin, named Ripple Credits, also known as XRP. Ripple is the world's first open payment network, through which any currency can be transferred easily and quickly, with transaction confirmations completed in seconds and transaction fees being almost zero. There are no so-called cross-bank, cross-region, or international payment fees. Ripple is the virtual currency that exists based on this network, and users consume a small amount of XRP when transacting via Ripple, but the transaction fee is minimal.
Ripple Labs (the development team of Ripple) requires each Ripple account to hold at least 20 XRP, and for every transaction, a fraction of XRP (one hundred thousandth of an XRP) will be destroyed. Additionally, during circulation and exchange, XRP gradually becomes a "bridge currency," acting as an intermediary in various currency exchanges.
A total of 100 billion XRP have been issued. XRP can currently be precisely measured to six decimal places. The smallest unit is called a drop. 1,000,000 drops equal 1 XRP, and 1 XRP = 1,000,000 dXRP. Simply put, XRP is the fundamental virtual currency circulated in the Ripple network issued by OpenCoin, just like Bitcoin, which can circulate throughout the entire network without being limited to a circle of acquaintances. Traditional currencies are stored within different financial systems, such as in VISA/MASTERCARD credit cards or Alipay. If you want to transfer money between different accounts, they will charge you high fees, and different financial systems will have strict checks on your identity.
XRP is used to pay extremely small fees in each transaction, can be transferred between Ripple gateway nodes, and can be exchanged for any currency. The total issuance of XRP is fixed, initially set at 100 billion. No more will be issued. The transaction fees on Ripple are very low, with each transaction costing only 1/1000 of a cent. This transaction fee is used to prevent individuals from disrupting the system through excessive transactions.
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