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When crypto first arrived on the scene back in 2009, it was designed as an alternative to traditional payment systems. At its core, this is still what crypto is all about, but the technology is now being used in several additional ways.
XRP, also known as Ripple, is one of the most popular blockchain platforms and cryptocurrencies. It has a dedicated community that supports the network and keeps track of the Ripple Price. Let’s take a look at how XRP can be used, and how it differs from other assets currently on the market. Read on to learn more.
What is XRP?
XRP is the native cryptocurrency of the Ripple blockchain network, which is also referred to as the XRP ledger. It was first launched in 2012, with developers Jed McCaleb, David Schwartz and Arthur Britto intending for the cryptocurrency to offer an alternative to Bitcoin, with a number of improvements made to the technology under the hood.
XRP quickly generated a lot of interest, standing out in what was still a new, uncertain industry. XRP makes use of a unique consensus mechanism to validate transactions made through the network. A number of trusted users are added to a node list, and these individuals are responsible for verifying new blocks on the chain. This is a fast and energy-efficient way of working, a vast improvement when compared to Bitcoins’ outdated proof of work mechanism.
This consensus mechanism also offers important security advantages. Validators on the node list run ledger updates every three seconds. This ensures that all validators are in sync and allows for more secure transaction processing.
Furthermore, XRP has considerable scalability attributes. The network can expand to handle up to 1,500 transactions per second. This is a significantly higher volume than Bitcoin and even Ethereum, which can only process five transactions per second or 13 transactions per second respectively.
As a result of XRP’s technological advantages, it is a well-established asset firmly cemented within the top 10 on the charts. At the time of writing this article, XRP is the sixth-largest coin available, with a market cap of $31 billion. It is currently trading at $0.57 and has grown by 47.57% over the past year.
XRP is one of the most exciting cryptocurrencies on the market today, and many are predicting it could soon be challenging top coins like Bitcoin and Ethereum. Now, let’s take a look at how XRP can be harnessed and used in real-world scenarios.
Making Payments
Cryptocurrencies are designed as alternative payment methods, and XRP is certainly no exception. Choosing to use currencies like XRP instead of more traditional means can offer you a number of benefits.
First of all, cryptocurrencies are decentralised. What this means is that they are not controlled by a governing body, such as a bank or a credit card company. When you make a transaction using cryptocurrency, you will not be subject to the rules and regulations these institutions usually have in place. This means you will not have to pay inflated or hidden fees and you will not be subject to charges for cross-border payments.
This makes cryptocurrencies like XRP extremely valuable for organisations and individuals who conduct business internationally. Over time, cross-border payment fees can mount up and can seriously eat into profit margins.
XRP offers all of the above benefits, but it has an advantage over other coins in that its consensus mechanism means transactions can be processed extremely quickly. By forgoing complex systems like proof of work, XRP can handle lots of transactions efficiently and reduce potential congestion and wait times.
NFT Trading
NFTs have exploded in popularity over the past few years. Short for non-fungible tokens, NFTs are digital assets that can be bought, sold and traded. However, where they differ from cryptocurrencies is that each and every NFT is completely unique. This means NFTs can be incredibly valuable, and artworks minted as NFTs have demanded millions of dollars at auctions.
We’ve seen NFTs adopted by a wide range of different businesses, from video game developers to Starbucks, who use them to offer special features to customers. With the XRP ledger, users can buy, sell and trade NFTs along with the XRP cryptocurrency. This NFT compatibility is a key advantage and sets XRP apart from many other currencies.
As NFTs become more integrated into mainstream services, organisations will be looking for a blockchain network that can facilitate the transaction of these digital assets. The XRP ledger is the perfect solution, it can allow for rapid and highly secure NFT trading within an efficient and scalable framework.
Conclusion
XRP is one of the most exciting cryptocurrencies on the market today. While the reputation of the technology continues to increase, few people are aware of just how XRP can be utilised. Making payments with XRP allows for highly secure and efficient transactions, with low costs and processing times for cross-border payments. In addition, the XRP ledger blockchain network can be used to trade NFTs, which could prove to be a crucial attribute as these digital assets are adopted by an increasing number of businesses around the world.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.