Cryptocurrency
Everything you need to know about the ripple price.
Having the potential to become a universal currency, Ripple is primarily designed to accelerate financial transactions between countries. This cryptocurrency, created in 2012, provides a digital payment protocol to various financial institutions and facilitates exchanges and transactions by making them faster and more affordable.
If this innovative technology seems to be forging a promising path toward conquering the currency exchange market, what are the criteria that have made the use of this virtual currency a success? A closer look at Ripple and its price.
The RTXP, short for “Ripple Transaction Protocol,” is a cryptocurrency that emerged in 2012. Its creation was a response to the numerous constraints associated with banking and payment systems. It is a decentralized peer-to-peer network providing a digital payment protocol to the various businesses that have adopted it. The Ripple protocol is based on a high-performance asset exchange system via blockchain technology. The latter is a network for transaction validation based on a public database.
While other cryptocurrencies offer advanced features such as smart contracts, Ripple focuses on the basics. It is also important to note that, unlike Bitcoin, Ripple currency was designed to be controlled by its issuing company, Ripple. The objective of the latter is to replace the SWIFT system, which allows for secure fund transfers between two banks. The main problem with the SWIFT method is its slowness (compared to a cryptocurrency), as a minimum of one day is required for a transaction while Ripple transfers in a matter of seconds. Thus, Ripple is working with several banking institutions, such as American Express and Crédit Agricole, to implement a more modern solution than SWIFT.
The way Ripple functions differs from that of Bitcoin. Ripple allows transactions that include various forms, both digital and fiat. The operational principle of this cryptocurrency is relatively simple both theoretically and practically. Ripple theoretically supports 1500 transactions per second with a maximum transaction duration of 5 seconds. Relatively fast indeed, but it is important to emphasize: what is challenging is not creating a fast system but a system that is fast, decentralized, and secure at the same time. To achieve such speed, the Ripple protocol is not based on proof of work as Bitcoin is; instead, the consensus system, called Proof of correctness or validity proof, relies on a voting system. This means that when a transaction is added to the blockchain, validators (who are banks, large corporations, or research institutes) produce blocks containing the list of transactions, and then all these validators vote for the best block produced for that session.
It is complex to judge the future of Ripple’s price. Between the end of 2017 and the beginning of 2018, Ripple peaked at around 3.4 USD. However, starting in 2018, the value of this cryptocurrency saw a significant drop, descending to 0.20 USD. But currently, and more specifically since the end of 2020, Ripple’s XRP is finally posting good results with an increase of over 280% by the end of 2020. Indeed, during this period, the Spark airdrop distributed 45.8 billion tokens to eligible holders of Ripple XRP tokens. Thus, this airdrop allowed the XRP to gain momentum, rising to around 0.6 – 0.7 USD. The next day, several holders sold their XRP because they had validated their Sparks. However, a few days after the end of this airdrop, the SEC (Securities and Exchange Commission), which is an American organization that regulates and oversees financial markets, intervened and caused XRP’s price to drop by nearly 50%.
After this drop, XRP’s market capitalization fell from third to fifth position in a matter of days behind the following cryptocurrencies:
If this innovative technology seems to be forging a promising path toward conquering the currency exchange market, what are the criteria that have made the use of this virtual currency a success? A closer look at Ripple and its price.
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What is Ripple?
The RTXP, short for “Ripple Transaction Protocol,” is a cryptocurrency that emerged in 2012. Its creation was a response to the numerous constraints associated with banking and payment systems. It is a decentralized peer-to-peer network providing a digital payment protocol to the various businesses that have adopted it. The Ripple protocol is based on a high-performance asset exchange system via blockchain technology. The latter is a network for transaction validation based on a public database.
While other cryptocurrencies offer advanced features such as smart contracts, Ripple focuses on the basics. It is also important to note that, unlike Bitcoin, Ripple currency was designed to be controlled by its issuing company, Ripple. The objective of the latter is to replace the SWIFT system, which allows for secure fund transfers between two banks. The main problem with the SWIFT method is its slowness (compared to a cryptocurrency), as a minimum of one day is required for a transaction while Ripple transfers in a matter of seconds. Thus, Ripple is working with several banking institutions, such as American Express and Crédit Agricole, to implement a more modern solution than SWIFT.
How Ripple Works
The way Ripple functions differs from that of Bitcoin. Ripple allows transactions that include various forms, both digital and fiat. The operational principle of this cryptocurrency is relatively simple both theoretically and practically. Ripple theoretically supports 1500 transactions per second with a maximum transaction duration of 5 seconds. Relatively fast indeed, but it is important to emphasize: what is challenging is not creating a fast system but a system that is fast, decentralized, and secure at the same time. To achieve such speed, the Ripple protocol is not based on proof of work as Bitcoin is; instead, the consensus system, called Proof of correctness or validity proof, relies on a voting system. This means that when a transaction is added to the blockchain, validators (who are banks, large corporations, or research institutes) produce blocks containing the list of transactions, and then all these validators vote for the best block produced for that session.
Ripple Price
It is complex to judge the future of Ripple’s price. Between the end of 2017 and the beginning of 2018, Ripple peaked at around 3.4 USD. However, starting in 2018, the value of this cryptocurrency saw a significant drop, descending to 0.20 USD. But currently, and more specifically since the end of 2020, Ripple’s XRP is finally posting good results with an increase of over 280% by the end of 2020. Indeed, during this period, the Spark airdrop distributed 45.8 billion tokens to eligible holders of Ripple XRP tokens. Thus, this airdrop allowed the XRP to gain momentum, rising to around 0.6 – 0.7 USD. The next day, several holders sold their XRP because they had validated their Sparks. However, a few days after the end of this airdrop, the SEC (Securities and Exchange Commission), which is an American organization that regulates and oversees financial markets, intervened and caused XRP’s price to drop by nearly 50%.
After this drop, XRP’s market capitalization fell from third to fifth position in a matter of days behind the following cryptocurrencies:
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- Polkadot (DOT)
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