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Should you Invest in Ripple (XRP)?

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What is Ripple and what is XRP? First of all, it is necessary to make a distinction between them. Ripple is a company aiming at the creation of a network of financial institutions that could lower the cost of international payments, making them easier and faster in the process. It was founded in 2012 and works as a gross settlement system, remittance network and currency exchange.

Ripple created an open-source XRP ledger; in it, banks and institutions can use XRPs that are Ripple’s tokens in order to achieve the aforementioned functions efficiently and in a cheap manner. The goal is to weaken the network of banks and financial institutions slowing down money flow and earning gigantic fees.

Ripple’s public database ensures everything works smoothly; XRP allows immediate transfers between any currency, and even gold, without fees, banks or exchanges. The whole thing works very differently from Bitcoin’s proof-of-work algorithm. Ripple is not blockchain-based, but consensus-oriented. Hash Tree summarizes data into units that servers compare to offer consensus.

Ripple’s project is a double-edged sword for banks. On the one hand, it enables instant transfers all around the globe, no matter how big a transaction; on the other hand, the financial system benefits financial institutions that are making trillions of dollars over fees. Ripple plans on removing such fees and replacing some obsolete technologies and institutions. However, unlike most cryptocurrencies, Ripple plans on collaborating with such institutions, which could be very interesting given they’re probably not going anywhere anytime soon.

So, how does the Ripple Network work?

Ripple uses a sort of global ledger consisting of digital portals that institutions use in order to transact through fast gateways at a very cheaper cost. It works with XRP, but also with fiat currencies and some cryptocurrencies. It is a way to spend money across borders without having to wait and pay a lot. It’s not going to be a gamechanger for common people but could be revolutionary for corporations. Just think about the fact that BTC handles 15 transactions per second, against XRP’s 1500 transactions per second.

So, is it Decentralized or not?

I mean, does it really matters in the end? We could say that Ripple Labs, having 61 out of the 100 billion tokens, makes us lean towards a centralized definition. On the other hand, Brad Garlinghouse, founder of Ripple, claims they’re moving forward with diversification plans that would diversify the validators on the ledger, making the whole thing a lot more decentralized.

Will Ripple take off?

Ripple is widely available on exchanges. It is, in fact, one of the easiest cryptocurrencies you can get your hands on. It’s a solid project and looks very promising. On the other hand, the fact that Ripple Labs still holds 61 billion XRPs means it can put some on the market at any given point, therefore maintaining its value rather low. It’s a great project, though it is likely not going to have huge spikes in the currency’s price in the short term.

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