The Ripple and XRP: Why it Happen?

 

A separation between XRP and Ripple is set to come into effect, a move that will allow both retail and institutional investors to have a clear idea of what the two are and what they stand for.

Contrary to perception, Ripple and XRP are two different and totally independent entities. However, most people, for the longest time have used ‘Ripple’ to refer to the underlying cryptocurrency XRP. While it has been okay, things could soon change as the Securities and Exchange Commission pushes for a clear distinction between the two.

A separation between XRP and Ripple is set to come into effect, a move that will allow both retail and institutional investors to have a clear idea of what the two are and what they stand for.

Ripple is a San Francisco startup company, and the majority holder of cryptocurrency XRP. The company develops software that banks use to facilitate fast, global financial transactions powered by the network’s underlying cryptocurrency XRP. Its platform is one of the most successive, having been used by large financial institutions to enable cross-border payments.

Founded in 2012, the American technology company was originally named OpenCoin before being renamed Ripple Labs in 2015. The company’s main objective is to provide a frictionless experience for sending money using the power of the blockchain. What is Ripple cryptocurrency XRP

Financial institutions are increasingly joining the company’s growing global network also called RippleNet to process customer payments reliably, instantaneously and cost-effectively from anywhere in the world.

Ripple has offices in San Francisco, New York, London, Sydney, India, Singapore, and Luxemburg. The company’s value comes from being the creator and majority holder of digital currency XRP. Ripple owns about 60 billion of the 100 billion XRP tokens that will ever be in circulation.

The company placed about 55 billion of the XRP coins it owns in a secured escrow account from which it can only release 1 billion every month. Ripple has never come close to releasing 1 billion tokens to the market as part of an effort that seeks to prevent over flooding of the market that would significantly affect the value of the altcoin

Ripple core product away from its XRP holdings is xCurrent, a network used by banks as a messaging solution for settling cross-border payments in real time.  The company also owns xRapid, a solution that allows financial institutions to convert fiat currencies to XRP quickly and cheaply.

XRP is an independent digital currency that is used to facilitate transactions on the Ripple Network. The technology behind the cryptocurrency is called XRP Ledger and acts as the blockchain in which the XRP token reside. The ledger is community-based which means only users can decide whether it succeeds or fails.

The virtual currency acts like a bridge between different fiat currencies as well as a source of liquidity. The first version of the cryptocurrency dates back to 2004 as work of web developer Ryan Fugger. However, the protocol in its current form began in 2012, immediately after OpenCoin now Ripple Labs came into being.

Developed as a currency for powering the Ripple Network, XRP allows people to send money digitally. The cryptocurrency came into being as an upgrade of Bitcoin with the aim of solving issues of high transaction costs and slow transaction speeds associated with the popular digital coin. XRP can process transactions in as little as 4 seconds compared to Bitcoin which can take minutes. It can also handle up to 1,500 transactions per second.

Ripple Labs helped develop XRP, resulting in the creation of 100 billion XRP tokens that are used to run and power the Ripple Network concept. While the people behind XRP and Ripple are the same, the two operate independently. The fact that the network is open source and XRP can be bought, ensures the independence of the two form each other.

Ripple Labs owns 60 billion XRP coins of the 100 Billion produced at inception. The remaining coins are traded freely in the market. Despite being the majority holder, Ripple only utilizes the XRP tokens in one of its product, xRapid. The product was developed with the aim of providing a form of liquidity to XRP tokens while acting as a bridge currency for cross-border payments. The success of Ripple, the company, is not in any way tied to the value of XRP the currencies.

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