Like Ethereum (ETH), Ripple is both a network and a token: XRP. With a capitalization exceeding $36 million in March 2022, Ripple is today the sixth largest crypto-asset.
Ripple (XRP): the essentials to know
1 – What is Crypto Ripple (XRP)?
- Basic principle : Ripple was born in 2013 from the OpenCoin protocol, itself created by Chris Larsen and Jed McCaleb. The initial goal is to reduce as much as possible the costs of intermediation on financial transactions, and to accelerate them. This system has been adopted by major global institutions, such as Unicredit, American Express and Santander.
- Functioning : Based on open source technology, Ripple allows peer-to-peer transactions. Its great particularity is to also allow exchanges between fiat currencies. A person can thus use euros to send yen to another individual. In short, a modern and decentralized version of the Swift system used by global banks.
2 – The project and the blockchain behind Ripple
- Project : More than 46 billion XRP coins are in circulation, for a maximum number set at 100 billion. The network is not strictly speaking decentralized, because while it is possible to be an XRP validator without asking permission from Ripple, the latter recommends a list of participants (banks, large companies), known as Single Node List. Ripple itself owns a large portion of these nodes.
- blockchain : Ripple is based more on a HashTree system than on a classic blockchain. It is thus neither based on the Proof-of-Work consensus algorithm nor on a PoS (Proof-of-Stake) consensus. The protocol uses a PoC (Proof-of-Correctness) voting system, called Ripple Protocol Consensus Algorithm (RPCA). There is, unlike Bitcoin (BTC), no mining possible.
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3 – Analysis and opinion on Ripple (XRP)
- Near-instantaneous transactions (about 5 seconds.)
- Fund transfers at reduced fees (from 0.0001€ to 0.0005€ depending on network overload.)
- Pre-mined tokens, which significantly reduces energy requirements for mining and therefore the impact on the environment.
- Used by major international institutions via RippleNet technology.
- Decentralization discussed, validation being held by a few noders.
- Many scams have taken place via sites that offered to acquire Ripple.
- Ripple Labs owns nearly half of all XRP in existence.
- Legal disputes with the SEC (Securities and Exchange Commission) which damage its image and have caused its capitalization to fall.
4 – How to earn or mine Ripple (XRP)?
Not minable, Ripple can be obtained by:
- mining other cryptocurrencies (Bitcoin for example), then exchanging it for Ripple on an online broker (Binance, eToro, Coinbase, etc.)
- buying other digital currencies with fiat currencies, and exchanging the cryptocurrency for Ripple via Changelly, which allows you to transfer your bitcoins, or other, to a different cryptocurrency, including Ripple.
- via the “faucets” system. Translated as “taps” in French, faucets are websites that offer to claim free tokens thanks to the number of views and clicks on certain advertising inserts. Coinfaucet is one of the most reputable crypto faucets for obtaining XRP.