What is XRP Cryptocurrency? The Easy Cypto Guide to Ripple XRP

Ripple XRP logo with white back ground

What is XRP cryptocurrency? Is XRP like Bitcoin and is XRP a top coin to invest in this year?

Ripple XRP is one of the most controversial altcoins on the cryptocurrency market. This is because Ripple isn’t a decentralized form of cryptocurrency like Bitcoin. Neither is XRP designed to superseded existing fiat currency payment systems.

 Ripple XRP logo with wet glass

What is XRP Cryptocurrency?

Ripple is a blockchain-based cryptocurrency, first created by Ripple Labs in 2012. Like Bitcoin, Ripple uses a distributed transaction ledger to maintain payment security and accuracy. However, this is where similarities end.

XRP transactions are performed across a permissioned blockchain. Every transaction is processed by a validator who has special permission to help maintain the Ripple payment network. This is very different from Bitcoin. With Bitcoin, it is possible for anyone to help validate transactions.

ripple xrp and bitcoin logo in space

Ripple Vs. Bitcoin

Ripple uses a permissioned blockchain because Ripple is designed to be used by mainstream banks and payment processors.

Banks occasionally have to reverse a transaction or freeze customer funds at the request of law enforcement official. However, with Bitcoin, reversing payments is not possible.

By comparison, reversing payments and freeing customer deposits with Ripple is easy. As a result, XRP and the Ripple network is fully compliant with anti-fraud, anti-money laundering, and other worldwide regulations governing traditional payment settlements.

Ripple XRP logo on silver coin

Ripple Fundamentals

As well as being regulator-friendly, Ripple XRP is far superior to Bitcoin as an everyday payment token.

  • The Ripple payment network is capable of processing 1,500 transactions per second.
  • XRP transactions settle in just 4-seconds.
  • With Ripple, it is possible to send XRP coins almost fee-free anywhere in the world. (Per transaction, current fees stand at just $0.00001.)

By comparison, Bitcoin is only capable of processing between 3 and 7 transactions per second. Fees are also much higher and transactions can take several minutes to confirm.

Ripple xrp logo net to Bitcoin coin with logo

Ripple is Not a Direct Competitor to Bitcoin

In theory, it is possible to scale the Ripple payment network to a point where it can process 5,000 transactions per second. However, XRP is not a direct competitor to Bitcoin.

Ripple is a next-generation payment protocol. Specifically, one which is capable of replacing the likes of SWIFT and Euroclear. It is also possible for banks to use the Ripple blockchain to send payments, without having to send payments in the form of XRP coins themselves. Instead, it is possible to send payments as regular fiat cash.

Stack of gold ripple XRP coins

Is Ripple a Good Investment?

Ripple’s payment network is already being used by several major banks and financial institutions. XRP coin prices have also previously topped highs of almost $4. Many, therefore, consider XRP a top coin to watch in the run-up to 2020. Others, though, aren’t so sure.

Some believe that Facebook’s Libra undermines the basic use case of XRP. Others believe that the risk to XRP is minimal. This is because Libra is designed to be used by everyday Facebook users. ⁠— Not banks or mainstream financial institutions.

See our Ripple XRP price predictions here.

See our opinion piece on if you should buy Ripple XRP here.