What is XRP? And what does it have to do with Ripple?

XRP is a cryptocurrency token designed to move transactions from a centralized database managed by a financial institution to a more open infrastructure while at the same time significantly reducing costs. XRP transactions are reliable, immediate, and inexpensive, which helps them move across borders.

Launched in 2012, cryptocurrency is one of the most ambitious goals in the field of cryptocurrency. XRP Ledger, the software that enables the use of XRP, has proposed a new way to execute blockchains that proponents claim to be better suited for transactions.

With the Bitcoin blockchain, anyone can provide computing power, verify transactions and protect software. The XRP ledger, on the other hand, allows only selected network participants to validate transactions and protect the network. There are over 150 of these participants on the network, collectively referred to as the Unique Node List (UNL).

At launch, 100 billion XRP tokens were pre-mined and distributed to specific individuals, businesses, and the public through gifts and giveaways. At the time, the move raised concerns about its decentralization, with a small number of companies controlling the supply of large numbers of coins.

XRP’s involvement in the market to add fuel to the fire relies on a for-profit company called Ripple. Ripple continues to be a major player in the XRP ecosystem to this day. Ripple helps maintain the XRP ledger, is an important owner of XRP tokens, and at the same time plays an important role in its development.

Understanding the Difference Between Ripple and XRP

In many cases, some stories and articles refer to Ripple and XRP interchangeably. It is important to understand that they are not the same. While XRP is a cryptocurrency, Ripple is a commercial company that helps promote and develop XRP, the software behind it (XRP Ledger), and many other transaction-oriented projects. However, the company claims that the two entities are separate.

Ripple describes XRP on its website as “faster, cheaper, and more scalable” than any other digital asset. Use XRP Ledger to “promote innovative technology across payment spaces”. The company describes its investment in XRP as follows:

“Ripple is focused on building technologies that will unlock new benefits for XRP and transform global payments. Third parties are also pursuing other XRP related use cases. “

Ripple was founded in September 2012 under the name OpenCoin, a year after the work to later become XRP Ledger began. In 2013, OpenCoin finally settled on Ripple in 2015 after being renamed as Ripple Labs. Originally known as the Ripple Open Payments System, the XRP Ledger moved to the Ripple Consensus Ledger before it became the XRP Ledger.

After the XRP ledger worked, its developers decided to provide 80 billion tokens to private companies working with the community to support cryptocurrencies. The company, Ripple, claims to systematically sell and use XRP to “stimulate market makers’ activities, increase the liquidity of XRP and increase the overall health of the XRP market.” I am.

XRP was originally a ticker symbol for “Ripple” or “Ripple Credit”, but over time these names have been replaced by XRP only to avoid confusion.

How to use XRP?

Anyone can use Bitcoin, Ethereum and many other cryptocurrencies simply by creating a wallet. The same is true for XRP, but the new wallet address must contain 20 tokens for booking. To avoid unnecessary costs, it may be important for new XRP users to choose a single wallet instead of committing to multiple addresses.

Various types of wallets compatible with the XRP network are available on the market. To avoid the cost of 20 XRP, most users store their tokens on the cryptocurrency exchange where they buy them. This is because the exchange covers the cost. However, holding funds on trading platforms has drawbacks, as exchanges can freeze or hack coins.

Investors can use the software XRP wallet to store XRP outside the crypto exchange. For security reasons, we recommend a wallet that allows users to control their private key. Alternative, often web-based wallets that control a user’s private key also bear operational costs.

Before you can transfer your money to your wallet, you need to buy and get XRP, which is traded on most of the top crypto exchanges. In 2020, XRP was delisted from a number of platforms after the United States. The Securities and Exchange Commission (SEC) has sued Ripple for selling $ 1.3 billion of unregistered securities, citing the company’s XRP sales.

Ripple maintains an XRP market page where you can see where the tokens are listed and how much they trade. After purchasing XRP on the exchange, users can either move the funds to their wallet or hold them on the trading platform. Selling XRP is an easy task, even on exchanges, especially those with high volume.