The Pros and Cons of Ripple (XRP)

There’s no doubt that Ripple is a hot investment right now. With its price more than doubling in the last month, it has become the second-largest cryptocurrency by market capitalization — just behind bitcoin. Ripple is a cryptocurrency that’s used within the Ripple payment network. The Ripple network is an open-source, decentralized technology that allows for money to be transferred globally without a need for a middleman.

While Ripple has been praised for its advantages over other cryptocurrencies, such as Bitcoin and Ethereum, there are also some disadvantages you should consider before investing in or buying Ripple. In this post, we will talk about some pros and cons of Ripple, so you can make an informed decision as to whether to invest in it or not. But first, let’s see what Ripple really is.

What is Ripple?

The Ripple payment protocol was created in 2004 by Ryan Fugger, who wanted to develop a decentralized monetary system for local communities. In 2011, Arthur Britto and David Schwartz joined Fugger and created OpenCoin, Inc., which would later be renamed Ripple Labs. They changed Fugger’s original design and built Ripple as a payment network for financial transactions, not just a digital currency.

Ripple has two main parts: XRP, the cryptocurrency token used on its network, and the Ripple Protocol Consensus Algorithm (RPCA), which is responsible for making transactions irreversible and preventing double spending. RPCA also makes decisions about validating servers and reaching a consensus about the state of the ledger.

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Ripple is currently the third most valuable cryptocurrency in the world. It’s a blockchain-based platform that allows for fast and cheap transactions, and it supports tokens representing fiat currency, cryptocurrency or commodities.

Ripple is also a payment protocol that lets banks transfer funds between each other in a matter of seconds. Ripple has already been adopted by some of the world’s biggest financial companies, including Bank of America and UBS. This could be a signal that the coin is well-positioned to become a major player in the industry. Now that you know what Ripple is, let’s see some of its advantages and disadvantages before investing in or buying Ripple.

The Advantages of Ripple (XRP)

Ripple is definitely one of the top cryptocurrencies by market cap and is traded worldwide. The crypto has been making waves lately due to some of its amazing benefits. Below are some of the pros of Ripple.

#1: Transaction speed.

Ripple can process 1,500 transactions per second. This is more than any other cryptocurrency except Ethereum, which can handle 30 transactions per second at best (that’s right: Bitcoin handles 3 to 6 transactions per second maximum). This makes Ripple an incredibly attractive platform for banks because they’re always dealing with huge volumes of transfers.

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#2: Transaction cost

The cost of using Ripple as a payment platform is minuscule compared to traditional systems, such as SWIFT (which can cost up to $50 to send $200 internationally). On the Ripple network, you pay only 0.00001 XRP transaction fee regardless of the amount you’re sending and where you’re sending it from/to. This makes it even more attractive to financial institutions — in fact, this feature was designed specifically with banks in mind!

#3: High Scalability

Ripple is one of the most scalable digital assets. The team behind the XRP Ledger claims to be able to process 1,500 transactions per second, 24x7, and potentially scale to handle the same throughput as Visa. The payment network can also handle cross-currency payments: a user sending USD can instantly convert their funds into XRP and send that instead. And the recipient will receive local currency in their bank account after a few seconds.

#4: It has a strong backing

The company behind Ripple has a strong track record as a disruptive force in financial services. Its CEO Brad Garlinghouse led Yahoo! and AOL messaging, but is best known for founding Hightail (formerly YouSendIt), which was the market leader in file sharing until Dropbox came along and swept them aside. Hightail was sold for $300 million in 2014.

#5: Real-time payments

Ripple employs a unique distributed ledger system that allows banks to make real-time payments around the world, 24/7. Real-time transactions are processed within 4 seconds. This time includes both verification procedures and validation of transactions by various parties.

#6: Security

The XRP Ledger is protected by a network of validator nodes run by universities, financial institutions, and Ripple Labs itself. These nodes ensure that every transaction follows the rules of the protocol, making it nearly impossible for bad actors to cause mischief on the network. All information about current transactions is stored in a distributed registry that is impossible to hack or change.

#7: Easy to use

Ripple is extremely easy to use. The system was designed with usability in mind and is easy to integrate into existing systems, making it easier for people to adopt than other cryptocurrencies like Bitcoin and Ethereum.

Disadvantages of Ripple (XRP)

Ripple is one of the most exciting new cryptocurrencies on the market. Its low price and fast transaction times have made it a favorite for those looking to make a quick trade. But that doesn’t mean there aren’t some disadvantages. Here’s what you need to know about some of the cons of Ripple (XRP).

· Many believe it is less secured and open to manipulation

While Ripple (XRP) is sometimes described as a cryptocurrency, it does not share all the same characteristics of Bitcoin. The Ripple (XRP) is sometimes described as a “cryptocurrency” that aims to compete with Bitcoin and other coins. However, most experts believe it may be better termed a “digital asset”.

To understand why, you need to understand the difference between a blockchain and a distributed ledger. The XRP ledger is not based on a blockchain. Instead, it uses something called the “Ripple Protocol Consensus Algorithm”. Many experts believe this is less secure than the Bitcoin system and open to manipulation.

· It is highly centralized

One of the most common complaints about Ripple is that it’s centralized — unlike other cryptocurrency networks, which are decentralized and under no one’s control. Instead being powered by a peer-to-peer network of individuals, Ripple is owned and maintained by one company. The company owns 61% of all XRP tokens, which has caused many people to think this makes it centralized.

· It cannot be mined like other cryptocurrencies

Although you can buy XRP on many exchanges, you can’t mine it with a computer like bitcoin or Ethereum. This makes it less accessible to the average consumer — if you want some, you’ll have to buy it with another cryptocurrency or fiat money. This could go either way for the price of Ripple - either it will become scarce and valuable, or its value will drop if people lose interest.

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