Since 2012, XRP has become a respectable cryptocurrency, worthy of being listed among the best.
It gained such a large number of investors that it ranked in the third spot in the past, after Bitcoin and Ethereum.
Despite losing its third place, it is still one of the most talked-about coins on social networks, such as Twitter.
If you’re curious to know more about this crypto, keep reading. This article will provide you with detailed information on XRP, including what it is, how it works, and more.
Let’s get right to it.
What is XRP?
XRP is a digital asset designed specifically for payments. XRP is a cryptocurrency that runs on the XRP Ledger, an open-source and decentralized blockchain technology that facilitates transactions within a time range of three to five seconds.
The ability to send XRP directly without the need for an intermediary makes it convenient to bridge two different currencies rapidly and efficiently.
What is the difference between XRP and Ripple?
Ripple is a technology company that provides the most efficient methods for sending money internationally through its global payments network, RippleNet.
XRP is an independent digital asset unrelated to Ripple, and the XRP Ledger is an open-source technology behind it.
They are related because XRP is a token used for transferring value across the Ripple Network.
How does the XRP Ledger work?
In the XRP Ledger, individuals take part in a global XRP community, and Ripple is an active participant.
Independent validator nodes reach an agreement, known as consensus, regarding transaction order and validity. In every 3-5 seconds, all outstanding transactions reach consensus on the ledger, at which point a new ledger is created.
Anyone can become a validator, and today there are universities, exchanges, and financial institutions participating. Ripple runs six validators or 16% of the total.
How can you use XRP?
In addition to being an investment, you can also exchange XRP for other cryptocurrencies, or use it to finance transactions on the Ripple network. Let’s take a look at these functions in more detail:
- Exchange of currencies. Rather than converting currency 1 to USD or your country currency and then converting it into currency 2, you can use XRP as an intermediate currency.
- Global transactions. As XRP allows for extremely rapid transactions, you can use it for this, even if it is an international transaction.
- Payment. With XRP, you can also make payments, either sending or receiving.
- Investment. In the same way that you can invest in Bitcoin and Ethereum, you can buy Ripple (XRP) hoping its value will go up.
All these functions may appear basic and simple, but many financial institutions already use XRP for transactions. Bank of America and American Express are just a few of its customers.
Advantages of using XRP
With XRP, you can enjoy the following benefits:
- Fast. Settlement time for XRP Ledger transactions is four seconds.
- Scalable. XRP reliably handles 1,500 transactions per second, 24×7, and can handle a lot more.
- Distributed. 150+ validators across the globe take part in XRP’s decentralized network.
- Stable. Institutions and enterprises can safely use XRP due to its seven-year track record of stable technology and governance.
- Eco-friendly. Ledger settles XRP transactions instantly without energy consumption associated with proof of work (or mining).
Where to buy XRP
You can buy XRP on different crypto exchange platforms. Here’s a brief list of the best ones:
- Binance
- Kraken
- eToro
- Coinmerce
- Uphold
- Bit2me
- Switchhere
The case between the SEC and Ripple
Perhaps you’ve heard of the SEC’s case against Ripple. This is a lengthy case that resulted in the de-listing of XRP from many popular platforms, such as Coinbase.
This section provides you with a brief overview of the case.
- On December 22, 2020, the Securities and Exchange Commission (SEC) sued Ripple and two of its executives for raising more than $1.3 billion through an unregistered, ongoing digital asset securities offering.
- Based on the complaint, Ripple raised money from investors in the U.S. and worldwide using digital assets known as XRP in an unregistered securities offering, beginning in 2013.
- Additionally, Ripple is alleged to have distributed billions of XRP in exchange for non-cash considerations, including labor and market-making services.
- Besides structuring and marketing the XRP sales that funded the company’s operations, Larsen (the company’s co-founder) and Garlinghouse (the company’s current CEO) also sold unregistered XRP worth about $600 million for themselves.
- Plaintiff alleges that defendants forbade their offers and sales of XRP to be registered or satisfied any exemption from registration, in violation of federal securities laws.
- SEC’s complaint, filed today in federal district court in Manhattan, accuses defendants of violating the Securities Act of 1933 and seeks injunctive relief, disgorgement, prejudgment interest, and civil penalties.
