Everything You Need to Know About Ripple (XRP)

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Everything You Need to Know About Ripple (XRP)

Despite sitting near the top of the crypto charts, many investors have the same question on their mind: What is Ripple? We’ll admit that when facing this project for the first time, it isn’t so easy to understand. That’s because the Ripple mission is a mix of old (exchanging money) and futuristically new (sending money across borders instantly). 

The concept behind Ripple and it’s token, XRP, is a piece of cake to break down. Essentially, the Ripple Network is built to send money anywhere in the world without wait times and (almost) without fees. However, understanding the way Ripple works is a bit more complicated, so let’s dive right in.

 

Sending Money Without Friction

The key to Ripple’s ideology is that current systems for sending money involve too many points of friction. Friction means that the process isn’t going smoothly – there’s opposition between the pieces in play. In the payments world, having friction indicates that the technology or business aims occurring don’t mesh well, with the result being high fees and long wait times for customers.

Ripple’s core concept is to take away that friction by introducing a cryptographically-based network that handles the entire lifespan of a payment without any of the aforementioned friction. 

Here’s an example from the traditional payments world:

  1. Alice is sending money to Bob. Alice and Bob live in different countries and use different banks. Alice goes to her bank, gives Bob’s banking details, and sends the money.
  2. Alice’s bank doesn’t have a direct relationship with Bob’s bank, so an intermediary bank must be found.
  3. Alice’s bank channels the money through a channel of second and third-degree connections before the transfer finds itself in Bob’s bank account.
  4. The exchanges performed at each interval incur exchange and processing fees and add days to the waiting time.
  5. In the end, the exchange takes up to seven days, incurs several fees, and has no native way of switching from Alice’s currency to Bob’s.

Ripple eliminates that entire complicated paradigm by breaking everything down to utter simplicity. With Ripple, that same situation looks more like this:

  1. Alice is sending money to Bob. Alice and Bob live in different countries and use different banks. Both banks use the Ripple Network. Alice goes to her bank, gives Bob’s banking details, and sends the money.
  2. Alice’s bank converts the money to XRP, and sends it instantly to Bob’s bank without a fee. Bob’s bank converts the XRP to Bob’s currency of choice.

No long wait times, no extraordinary fees – just one very fast transfer using the power and speed of consensus building.

Who Uses Ripple (XRP)?

The laundry list of banks who have adopted Ripple and its XRP token is staggering. Santander, Euro Exim Bank, SBI Holdings, MoneyGram, Cambridge FX, Western Union, Viamericas, and Mercury FX all use Ripple, but the list doesn’t end there. Dozens more banks and financial services companies are on the long list to begin implementing Ripple products like xRapid. 

Moreover, Bank of America recently wrote a whitepaper in which they cited the Ripple model as an inspiration. For these reasons and more, Ripple (XRP) finds itself as one of the top three most valuable cryptocurrencies in the market today. By adding more partnerships and use cases to its already illustrious list of them, XRP makes its case stronger by the day.

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