A lot has been said about Ripple – both within and outside the crypto industry. In the larger financial world, there has been a lot of discussion around Ripple becoming a major player in cross-border transactions. Both Ripple and its native currency, XRP have regularly been in the news for their unique use cases in the crypto market.
If you are new to the cryptocurrency world and looking to invest in Ripple, you will want to know what it is and what it can be used for – even before searching for how to buy Ripple. So in this post, we will be showing you a quick highlight of what Ripple is and what it can be used for. So keep reading to see all that we’ve got for you in the post.
What Is Ripple?
Ripple is a payment system as well as a currency exchange network that can process transactions across the globe. The basic idea behind Ripple is for it to serve as a trusted agent between two parties involved in a transaction. This is easy because of its ability to quickly confirm transactions and facilitate exchanges for a variety of cryptocurrencies, fiat currencies, and even commodities like gold.
The major reason behind the creation of Ripple was to replace or be a strong alternative to SWIFT, a major player in the money transfer world.
What Is XRP?
There is always a slight confusion between Ripple and XRP, and some people would even assume the two to be the same. But that is not completely the truth. XRP is the native currency used to facilitate transactions on the Ripple network. It is what makes it possible for users to send or receive money across the world, convert currencies seamlessly, and exchange ripples into other digital tokens.
XRP works on a public ledger that uses a consensus mechanism, making it possible to have transparent and secured transactions on the network. XRP is presently one of the fastest and most scalable digital assets in the market. It allows for real-time global payments around the world.
Another unique feature of XRP over many cryptocurrencies like Bitcoin is its amazing speed of confirming transactions. While it can take minutes or hours to confirm Bitcoin transactions, XRP transactions are confirmed in less than 5 seconds. Plus it attracts much lower transaction costs than Bitcoin.
Some of the Benefits of Ripple
- Focused appeal: By being able to focus their efforts on banks and other financial institutions, Ripple developers have been able to create a solid product that is in high demand by major financial institutions.
- Fast transactions: Like we earlier said, XRP transactions are incredibly fast. They typically take less than 5 seconds, which is a huge advantage over wire transfers which can take days to be completed. It is also faster than most crypto transactions which can potentially take hours to be confirmed.
- Low transaction fees: Compared to bank charges for transfers or transaction costs on other cryptocurrency networks, the cost of transactions on the Ripple network is ridiculously low. It is as low as 0.0001 XRP.
- Versatile exchange network: The Ripple network does not only use XRP for processing transactions on the network. Even with cryptocurrencies, fiat currencies, and commodities like gold, transactions can happen on the network.
- It has large institutional adoption: Many big enterprises are already using Ripple as their transaction platform. Some of them include Axis Bank, Santandar, and Yes Bank. They are all using the Ripple network. That is a clear indication that Ripple has quite larger institutional market adoption than most cryptocurrencies.
What Can Ripple Be Used For?
#1: Used to facilitate the exchange of money across the world
Today, a wide range of cryptocurrencies have multiple use cases, and most times, without a specific focus. Though this attempt to have a broad appeal often comes with its benefits, most times it causes a lot of confusion and results in a lack of direction. But that is not the case with Ripple.
The cryptocurrency is designed basically to facilitate the exchange of money across the world with high speed and minimal costs. Ripple now makes it easy for banks and other financial institutions to transfer tokens in real-time, securely, and at a minimal cost. So bank transfers don’t have to take days to complete and they don’t have to come with huge transaction fees again.
Therefore, in practice, Ripple makes it easy for people living overseas to transfer money from anywhere they are in the world to their home countries without worrying about paying wallet-breaking fees on their transactions.
#2: Can be used for transactions and as a potential investment
Just like any other digital currency, Ripple can also be used either for transactions or as a potential investment. The Ripple network can also be used to process other types of transactions like currency exchanges.
For instance, if you are looking for a quick and cheap way to swap USD for euros, you can first use the Ripple network to exchange your USD for XRP, and then later use your XRP to buy euros. That would help you achieve a much faster and cheaper approach compared to when you use a bank or money changing exchange.
#3: XRP payment system
Ripple recently announced that it will be launching its own payment system soon. The system will use XRP as currency for payment transfer. The system will make it possible for users to make transactions with XRP and go ahead to cash out through local stores that support XRP. That way, there will be no need for foreign exchange services.
#4: As a payment method for paying content creators
Recently, Coil was created to help users donate to their favorite content creators using XRP. The project was announced by Tomas van der Wansem, and it promised to be a ground-breaking development that will greatly encourage content creators that publish content on media platforms like Twitch, YouTube, and many more.
#5: Remittance industry adopting XRP
Lots of companies in the remittance industry are already considering adopting XRP as their payment options. Thanks to its fast transaction speed, low volatility, and low cost. When this is finally implemented, it will cause a huge increase in the number of investors and traders finding interest in Ripple and XRP.
