Besides Bitcoins, Ripple is known to be one of the new digital currencies in the financial investment market.
Ripple essentially is about intranet which is responsible for fastening cross-border transactions. It is also traded in the biticodes under the name XRP. The ripplenet was built solely for banks and companies and gave them access to trade globally with speed and reduced transaction costs. While XRP is similar to BTC that is the currency we trade or invest in the cryptocurrency market.
It can at first seem quite daunting to understand the nuances of this digital currency or payment network. Here are some important aspects that will help in a better understanding of the system.
Functioning of Ripple- How Does It Work?
Unlike bitcoins, the ripple network is not working on the system of proof of work. The network heavily relies on a protocol where the consensus validates the account balances and also the transactions in the system. Here people are responsible for enhancing the integrity and also making sure that there are no double payments in the system. This is one of the main features where the people are required to approve the transactions for the smooth working of the system.
Similar to bitcoins these are also decentralized systems, where no third party or government authority interferes with the working of the system. A user on this platform can easily consolidate the different payments on different gateways. Such as, if you send $10 on one platform you can delete it and start the gateway on another platform. You can choose to delete all transactions but the first one you initiated. Once the confirmation is done that shall serve as your first transaction. There is immediate confirmation and takes very little time.
Given that it works on a blockchain basis where transactions are made public. The ripple network also has a public ledger commonly known as the Ripple Consensus Book. It keeps track of all promissory notes, IOUs, and any kind of transactions that occur on all gateways. While this is very beneficial it may also cause problems for corporate identities as it is very easy to lift the anonymity veil. While these do not expressly reveal the identities but as said, it can be easy to lift the veil of anonymity.
As in the case of the Bitcoin network, the ripple network also has a digital currency called XRP. These currencies are used for the said transactions on the ripple net. When it was first launched many imminent personalities and corporate houses were gifted or awarded the ripple coin to facilitate the transaction on the ripple net.
Ripplewas earlier not available to be mined. However, with the advancement of technological aspects, these days, Ripple can be mined just like bitcoins but the ripple system has more control over the currencies being mined. The system or company still holds a majority of the coins and only releases a few at a time. However, this has caused many to be alarmed. If the company decided to introduce many coins in go it might lead to a market dilution of the coins which may cause the value to go down.
Advantages And Disadvantages of Ripple
There are many advantages to using ripple. Since it involves suer confirmation for a transaction to be complete there is very settlement. This fat settlement has proven to be beneficial for many. In addition to this, the cost of completing a ripple transaction is also very low.
However, it also has some disadvantages such as there already exists a lot of pre-mined ripple in the network. This essentially brings down the value which can hamper future transactions. Additionally, it is still a somewhat centralized digital currency as the ripple company has held over the supply of the coins and interferes with the transactions regularly.
Therefore, these are some things that one should know about ripple. Recently they have become an interesting investment opportunity for many. If you wish to trade or invest in ripple you can use the exchange platform. One such platform which offers you a safe and secure place.