XRP Overview: Cryptocurrencies are becoming increasingly popular, and Ripple XRP has also solidified its position as one of the leading cryptocurrencies in the market. Ripple XRP is considered a cryptocurrency as it is inherently different from all other cryptocurrencies present in the market, such as Ethereum and Bitcoin. Ripple XRP is more like a back-end infrastructure that supports some real-time payment protocol for anything valuable. This can be anything from commodities, cryptocurrencies, fiat money, and any other unit with value like frequent flier miles and mobile data. Ripple XRP is a technology service provider that facilitates currency exchange in real-time and too efficiently.
What is Ripple (XRP) Cryptocurrency?
To understand the Ripple XRP cryptocurrency and how it is changing financial transactions all over the globe, it becomes necessary first to understand the concept of liquidity in international transactions. Liquidity in the trades is mainly the ease with which exchange in a specific instrument or particular security can be performed or, in other words, the ease with which an asset can easily be converted into cash for withdrawal. Money is undoubtedly the most liquid asset, while real estate is the minor liquid asset as it can take a long time to sell.
For domestic transitions such as a sale through a cheque deposit or a debit card, the liquidity is high since the exchanges occur in a single currency. But, when you consider the same thing for international transactions, you will notice that it is not as simple as a domestic transaction. International transactions face many hurdles and delays due to country-specific relations or currencies. Apart from that, there is also a variance in price and time, which could affect the pricing on both sides of the exchange. The international payments may take anywhere from one to five days to settle and are usually expensive. This is why financial institutions need to pre-fund their accounts that the banks hold in foreign currency, as these accounts have balances in local currencies, which will improve the liquidity and help the international transactions be seamless. It, however, means that at this very moment, an astounding amount is sitting dormant in these accounts across the world; the capital could be utilized more productively. Owing to the cost and the complexity of maintenance of these accounts, only a small number of banks can effortlessly process global transactions. At the same time, the rest have to rely on big financial entities for processing their international transactions.
What are the features of Ripple XRP cryptocurrency that make unique?
Following are the advantages of the Ripple XRP Cryptocurrency that makes it unique from the other cryptocurrencies present in the market:
- Payments can be settled in a maximum of four seconds in stark contrast to the other means such as Bitcoin and other traditional systems, which take up to more than an hour and around 3-5 working days.
- The transaction fee with the Ripple XRP cryptocurrency is comparatively lesser than the other cryptocurrencies. The standard transaction fee when using the Ripple XRP cryptocurrency is 0.0001 XRP, while in the case of Bitcoin, the same ranges from $0.30 to $30.
- The Ripple XRP cryptocurrency is scalable as presently it handles up to 1500 transactions every second, working 24×7. It is an astounding improvement compared to Ethereum, which can handle up to 15 transactions per second and is well in line with the visa’s ability to control the transactions.
- By improving the liquidity, Ripple XRP cryptocurrency also makes some cross-border payments in real-time, which are much faster and cheaper.
- It is particularly true for the emerging markets that the cost of currency exchange runs higher. It has enabled Ripple XRP cryptocurrency to enter these emerging markets in countries like China, India, and Brazil.
Ripple XRP cryptocurrency has been one of the most popular projects globally due to its real-world application. As a result, the protocol and the technology have been adopted by several prominent institutions worldwide. Recently, the payment provider ‘TransferGo’ has decided to use the services of Ripple and infrastructure for some real-time transactions.