Ripple is officially the name of a five-year- old start-up based in
San Francisco that is developing a payments network for
financial institutions. XRP is the name of the coin participants
can use for transactions
Ripple is a real time gross settlement system, currency exchange
and remittance network. Ripple connects banks, payment
providers, digital asset exchanges and corporates via RippleNet
to provide one frictionless experience to send money globally.
Built on the most advanced blockchain technology that is
scalable, secure and interoperates different networks. Provides
optional access to the world’s fastest and most scalable digital
asset for payments, the Ripple coins XPR.
In the last few weeks there was a huge surge in the prices of
ripple. XPR climbed 35000% to $ 2.30 last year and further
soared 65% to its all-time high of $ 3.84.
What makes Ripple stand out is its exceptional speed of
transaction. Also banks like American Express and Santander
would use Ripple trading for cross-border transaction between
USA and UK. A bank called Cuallix is the first financial
institution to use ripple, in this case for U.S.-Mexico
transactions. Definitely the ripple ecosystem would expand to
justify its position right now, seriously Ripple is on moon with
its demand and the speed at which it operates.
Digital currency ripple has blown past its cryptocurrency rivals
largely because it is working with large institutions, which give
it an aura of legitimacy and practicality.
However, there are some concerns regarding ripple. The ripple
network is centralized, and the source code is not open but
privately owned by the company. Cryptocurrency enthusiasts
believe that centralization is the exact opposite of what the
cryptocurrency technology stand for. The cryptocurrency
technology in future is meant to replace the banking institution
of today.
Erik Voorhees, CEO of digital asset exchange ShapeShift and a
vocal advocate for bitcoin says that, “The reason ripple is
surging so much is it's a bubble”
Like many alternatives to bitcoin, the main aim of these ‘alt
coins’ is to make transactions cheaper and faster across borders,
which was the original idea behind the inception of bitcoin nine
years ago. The average transaction time for Bitcoin transaction
takes about an hour, Ethereum network takes 2 mins and Ripple
takes around 4 sec.
There are many Fintech start-ups like, TransferWise that already
allow consumers to send money overseas more quickly and
cheaply than most traditional means. In a November report,
Bernstein Senior Research Analyst Lisa D. Ellis said a test
found that cross border transactions using Bitcoin was much
expensive and slower than using TransferWise. However,
Bitcoin did prove useful for big ticket items such as college
Tution fees if both parties held digital currencies.
The idea of Ripple is not to compete with Bitcoin but more to
complement Bitcoin. The actual value of the coin over a long
term would depend on the utility of the coin. Although XPR, is
not quite there in terms of actual usage but neither is Bitcoin.