An Introduction to Ripple

ripple-introduction

Ripple has been getting a lot of media coverage in the cryptocurrency space. However, it is quite different as compared to the other cryptocurrencies. This is one of the main reasons why people are not able to understand the working of this cryptocurrency.

Ripple is actually a protocol rather than a cryptocurrency. This protocol allows banks as well as financial institutions to transfer money between different countries and across continents in a matter of minutes. Thus, not only are the banks able to transfer the money between different branches but one bank can transfer the money to another bank as well. This would reduce the time taken in the actual money transfer process. This would indeed open up newer opportunities for the banking as well as the rest of the financial sector. The cryptocurrency which is associated with this protocol is XRP. The company that created the Ripple protocol hopes that the banks would use the XRP cryptocurrency in order to transfer the money. This cryptocurrency allows them to complete the transactions within a couple of minutes. Moreover, the processing fee or the charges for the transactions are relatively low. 

In this regard, it is different than Bitcoin. While Bitcoin is purely a cryptocurrency which is based on the blockchain technology, Ripple, on the other hand, is a protocol which is based on the blockchain technology and is associated with the cryptocurrency XRP. There are quite a few banks as well as financial institutions which have already tied up with Ripple.

A couple of Japanese banks are planning to use the Ripple protocol for transferring money internationally from early 2018. That is why the XRP cryptocurrency is also known as the cryptocurrency which has the backing of the financial institutions. As more financial institutions and banks start using the Ripple protocol, the value of the associated cryptocurrency could go up as well.

In the year 2017, XRP cryptocurrency has already given a return of more than 1000%. However, since June of this year, it has been stagnant and it remains to be seen whether the usage of the Ripple protocol by more financial institutions would actually propel this currency and increase its value as well. At a point in time, it was the second most valued cryptocurrency before it fell by around 50% to the levels where it is trading currently around the $0.27 mark.

Sai Pinnamaneni is Co-Founder of Smartereum. He is a Sharepoint Architect with over 15 years of experience. Entrepreneur | Software Architect | Vegan | Proud Dad
twitter.com/SaiPinnama
sai@smartereum.com

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