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Ripple: Why it is our Future

By Marc Georgijewitsch

Ripple (XRP), the crypto currency with the second highest market capitalization, is a unique solution for one of the biggest problems in the financial world.

So let’s try to start with the basics. What is the Use Case of Ripple?

To answer this, let’s think about the financial world as a whole. What is one of the key elements of our financial system? Transactions. Every day, $155 trillion, that is $ get transferred all over the world. That’s $1.7 million every second!

And for every transaction, it is obviously very important that 3 key elements are ensured.

Access, speed, certainty — and ensuring all these elements is what?: Costly.

But not with Ripple. Ripples Payment Protocol, operating on one of the most advanced blockchains, allows the execution of 1.500 transactions per seconds. As a reminder, Bitcoin manages a maximum of 7 transactions per second! The protocol is open-source, and has a main use case in interbank transactions, it wants to work as a neutral tool for financial institutions and systems. How does it work? Users make payments between each other by using cryptographically signed transactions, either in fiat currency on the ripple network, or they make the transaction directly using Ripples internal Currency (XRP). Ripple has the specific function of being a bridge currency, which basically means, that if you want to change your Euros for Bahraini Dinars, and no exchange on the world is offering you this trading-pair, or at least for a reasonable rate, you can use XRP as a bridge between these currencies.

Let’s check some few hard facts: How many XRP exist and how are they created? XRP were created at Ripples “birth”. XRPs cannot be mined, and its protocol forbids the creation of more XRP. At a current price of $0.24 XRP is capitalized at $, taking up around 24% of the whole crypto-currency market capitalization. A further important feature is that XRP are decreasing automatically. For every transaction you have to pay a transaction fee in XRP, which is no news for us in the crypto currency world. But in this case, the used XRP for the transaction fees, get destroyed, they cease to exist. So automatically by each transaction, the supply of Ripple is going down. Decreasing the supply. And what happens when Supply is going down, and Demand stays the same? The Price goes up!!

How can I obtain XRP?

You can buy them on different crypto currency exchanges, either against Fiat, or exchange other crypto currencies for XRPs.

Already over 100 companies worldwide have started using or experimenting with Ripple, such as Accenture, Royal Bank of Scotland, American Express, UniCredit Group. This shows that Ripple is one of the crypto currencies with the widest institutional acceptance. And it is quite simple to understand why. Bitcoin and other Cryptocurrencies have been created and used to have an alternative next to fiat currencies (€, $). So basically they are a threat to the existing money system. Ripple and its Currency (XRP) are no threat. They want to help with the existing system in improving it. Especially, they are making improvements in the areas that generate more trust and efficiency that the financial intermediaries can claim for themselves. Ripple is not fighting the existing system, which almost never actually works, but it is showing how the existing system can be improved without getting rid of the existing “top dogs”.

So keep an eye out for Ripple and XRP in the next few months!

#Blockchain #Learning #Ripple #Beginner

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