What is Ripple ?

Bitcoin is the largest cryptocurrency in the world by market cap. Most people have heard of it. You can’t turn on the TV these days without someone mentioning it. Ripple is different. Despite being the fourth largest cryptocurrency in the world, most people have never heard of it. So what is Ripple?

Like Bitcoin and Ethereum, Ripple can be hard to understand. Especially because it’s pretty different than most cryptocurrencies. Keep reading to find out what is Ripple, how much it costs, where you can get it, and more.

What is Ripple?

So, what is Ripple, exactly? Ripple is both a payment network (RippleNet) and a cryptocurrency (Ripple XRP) created in 2012. RippleNet connects banks and other big institutions and allows them to transfer money and other assets through the network. All transactions are recorded on the decentralized XRP Ledger.

Ripple XRP is the currency used in the payment network for all transactions, reducing the time and money associated with cross-border payments. Each transaction through the system is processed in only four seconds. For comparison, Ethereum takes more than two minutes, Bitcoin over an hour, while traditional systems can take between three and five days.

The currency is also scalable — it can handle 1,500 transactions per second. Bitcoin, on the other hand, can reportedly only handle seven in the same timespan. That’s one of the reasons Bitcoin Cash now exists.

In addition to being fast and scalable, the Ripple network also offers low transaction fees. Because of its benefits, the system is already being used by more than 75 financial institutions across the globe.

So what is the main difference between Ripple and Bitcoin? Ripple is a payment network for financial institutions and is a competitor to systems like SWIFT. It can also be traded, but was never intended to be a payment method for buying stuff online. Bitcoin aims to become a globally adopted currency that could improve or even replace conventional money.

Not everyone is a fan

Bitcoins are a new way of making payments that bypass banks and other financial institutions. Ripple, on the other hand, is working with banks to help them speed up cross-border payments and reduce fees. Some see Ripple as going against what cryptocurrencies should stand for, which is why many don’t like the standard.

Another common criticism of Ripple XRP is that it’s not decentralized like Bitcoins and other cryptocurrencies. The company created all coins before the launch and still owns more than half of the supply.

Is it a good investment?

Ripple currently trades at around $0.25 (for an exact amount see the widget below), making it way less valuable than Bitcoin and Ethereum. Unlike some other cryptocurrencies, you can’t mine Ripple. As already mentioned, all the coins — 100 billion — have already been created. Around 40 percent of them are in circulation, while the rest of the coins are held by the company.

They will be released into the market gradually — one billion Ripples per month. This is to show investors Ripple won’t sell the entire supply in the market at once, which could negatively effect the price.

But it’s hard to predict whether the price will rise or fall. If Ripple can get more banks on board and transform the financial sector with its payment network, you can expect the price to skyrocket. If that doesn’t happen and investors don’t pour their money into Ripples, the price can experience a massive drop.