Ripple Use Case
One of the most interesting & controversial cryptocurrencies to emerge in the last few years is XRP. With a 400% growth last year alone, it has gained much attention over the last year. With this growth however, it has ignited much debate about its future, potential growth, and particular use. Founded by the company Ripple in 2012, it came into the spotlight in 2018 when it reached all-time highs.
What is Ripple XRP?
Ripple has described XRP as a cryptocurrency for banks. Using the ticker XRP, its purpose is to provide quick transactions from one party to another. There are two key differences in Ripple & XRP that traders should be aware of. Ripple is the name of the company & the network that processes transactions from all around the world. XRP is the coin ticker used to exchange with other cryptocurrencies.
Ripple acts as the middleman between two parties in a transaction. Ripple serves as a trustee in such an agreement & can quickly verify that the exchange went accordingly. Whenever traders make a transaction using the network, then a small amount of XRP is taken as a fee. As of November 2021, this transaction fee was $0.0002, a tiny fraction when compared with other networks. Ripple counts some major financial services & big banks as its customers, including Santander USA & the Canadian Imperial Bank of Commerce.
As mentioned before, XRP is the coin ticker and cryptocurrency that runs on the XRP Ledger network. Traders can use the XRP coin ticker to invest, to trade with other crypto-currencies, or to make financial transactions on the Ripple Network.
Ripple Use Case: Faster Transaction Times
Ripple has strongly stated its intention in the past for XRP is to create a cryptocurrency for banks and payment networks. Using XRP, these institutions will be able to make use of faster transaction times for use with cash switch systems and forex exchange.
The primary goal of XRP and Ripple is not for the consumer in goods and services. Ripple wants to structure a network that can send transfers in real-time, at a cheaper price and with greater transparency unlike present day switch price methods such as SWIFT. XRPs transactions are established in seconds with little cost to the user whereas other cryptocurrencies (such as Bitcoin), transactions can take many minutes with excessive transaction costs. It is Ripple’s intention to establish fast transactions across borders for large financial institutions.
In comparison to the average cryptocurrency, which can take anywhere from 2 to 10 minutes to approve and carry out a transaction, XRP can process 1500 transactions per second with an average approval time of 3 to 5 seconds. This puts XRP well ahead of the rest in terms of speed and at a near-instant transaction time.
Ripple Use Case: Secure Payments
One of the big draws towards XRP for investors is its close relationship with some big banks around the globe. As it is Ripple’s goal to create faster transaction times, getting big banks on their side is essential to the growth of the company and the XRP coin. The Ripple Network has connections between payment providers, banks, and digital asset exchanges to ensure their success.
More than 100 financial institutions have joined the Ripple Network with the biggest three banks based in China with a total of almost 11 billion US dollars in their vaults. As Ripple continues to gain more partners such as JPMorgan Chase in the US and HSBC in the UK, the future is looking promising for the company and XRP.
Ripple is able to carry out these transactions through its xCurrent software. This is installed within financial institutions’ already existing networks giving it access to the risks and information security structures established in the bank’s network.
According to their white paper, xCurrent will smash outdated, slow, and costly transactions between financial institutions, their customers, and all in between. Transaction fees will be kept low with near-instant times for transfer, and all communications will be kept securely encrypted with a built-in messaging service to exchange information in relation to fees, payment details, and time of arrival of funds.
All of this is done with XRP and Ripple again taking advantage of its fast-processing time and low-cost fees to the user. The inclusion of large cross-border banks has major potential to propel XRP as stable in this regard.
Ripple Use Case: Decentralized Finance
In April of 2021, XRP experienced a boom in new case cases after integration with a number of decentralised finance (DeFi) applications.
As a result, XRP has many advantages to being decentralised. One major factor is that centralised finance does not come will a guarantee. Transactions can be undependable, and money cannot be tracked because of the number of intermediaries involved.
When decentralized, transactions are guaranteed, happen in real-time and are standardised across the board. These perks have the real potential to replace the traditional role of financial systems and revolutionize these systems for the modern world. XRP has the advantage of being one of the first to do this, making it an exciting tool for the future.
Potential Future of XRP
Ripple’s XRP is one of the most interesting cryptocurrencies available for investors. Its major difference of having close contacts with major banks and organizations worldwide sets it apart from other decentralized currencies like Ethereum and Bitcoin.
As XRP is different from the norm, this may be the key to Ripple and XRP future success. It has the potential to evolve the way in which we use financial transactions and buy and sell currencies, something which must develop to keep up with our fast-paced, ever-changing modern world.
With its quick transaction time, most experts are predicting that the price of XRP could reach highs of $3 plus in 2022, with some estimating lows of $1.50. It’s all-time high so far was back in December 2018, reaching $3.34.