What is XRP (Ripple)? Pros and Cons? Is XRP a good investment?

If you are looking for cryptocurrency investment opportunities beyond buying Bitcoin, you can look into XRP. It is sometimes called Ripple, but that is actually the name of the company that created it.

Ripple Coin (XRP) is a digital currency with market capitalization currently ranked in the top 10 as coinmarketcap. In fact, the Ripple Coin project was even born before Bitcoin. In today’s article, let’s join invest286.com to find out what is XRP (Ripple coin), how it works, how it is different from BTC and whether you should invest in Ripple Coin (XRP) or not.

What is XRP? Review Ripple coin from A-Z 2024

In the best-case scenario, Ripple will replace SWIFT and become the method of choice for international money transfers. However, with SWIFT’s current market dominance, this will be very difficult to happen. However, it cannot be denied that Ripple Coin (XRP) has outstanding advantages.

Outstanding points of XRP coin:

• Extremely low transaction costs. Each transaction costs 0.0001 XRP, and XRP current prize is $ 0.537576 (0.65%)
• Transactions process quickly, taking an average of just five seconds.
• Can be used by banks and facilitate transactions between one currency and another.

Because XRP is Ripple’s cryptocurrency, buying XRP is a way to invest in Ripple. Just like you can buy ETH if you believe in Ethereum, you can do the same with XRP and Ripple.

Are XRP and Ripple the same thing?

I see many articles calling XRP and Ripple interchangeable. But essentially, Ripple and XRP are not the same.

XRP is a cryptocurrency, while Ripple is a company that works to profit in promoting and developing XRP.

Normally, people will call XRP is Ripple Coin, because XRP is the currency of this company, and the name Ripple Coin is also more popular than XRP. Therefore, in this article, I will also prioritize using the term Ripple Coin instead of XRP.

Ripple Coin (XRP) price today

Below is the latest updated XRP price in real time:

SEC Lawsuit Against Ripple

The most significant obstacle for Ripple and XRP currently is SEC lawsuit that took place on December 21, 2020.  SEC (U.S. Securities and Exchange Commission) has filed a lawsuit alleging that Ripple sold $1.3 billion in unregistered securities through its XRP cryptocurrency.

Ripple claims that XRP is not a security. They have also said that SEC did not provide them with proper notice that the XRP sale would be considered a securities offering.

“The value of XRP has actually almost tripled since the SEC sued Ripple. It hasn’t gone downhill at all. This is a testament to the fact that once communities are formed with shared care, they are resilient.” – The head of Ripple shared.

The lawsuit between the SEC and Ripple has not come to a conclusion, but many predict that they will come to a settlement. If the SEC wins the case, Ripple and XRP will have to face many difficulties. However, many experts believe that the victory will be on Ripple’s side.

What is the difference between Ripple Coin and Bitcoin?

Ripple and Bitcoin are similar in that they both use Blockchain technology, a peer-to-peer (P2P) transaction network that does not require third-party intervention. At the same time, both provide anti-counterfeit security capabilities.

However, the purpose of Ripple is not to be a competitor to Bitcoin, but to support Bitcoin, serving to transfer currencies seamlessly, whether it is USD, Euro, Pound Sterling or Bitcoin.

Differences between Bitcoin and Ripple Coin:

• The purpose is different

• Bitcoin mines the blockchain, while Ripple uses a unique distributed consensus mechanism to validate transactions.

• XRP is cheaper and faster than Bitcoin: Bitcoin transaction confirmations can take many minutes, transaction costs are high, while XRP transactions are confirmed within seconds and costs are very low.

• XRP has 100 billion tokens, while Bitcoin is only at the limit of 21 million.

• Bitcoin can be mined, while Ripple Coin cannot.

Technology of Ripple Coin (XRP)

Ripple technology is divided into parts with the following names: xCurrent, xVia, xRapid and XRP cryptocurrency.

xCurrent technology

The goal of xCurrent is to enable real-time settlement and monitoring of cross-border payments made by RippleNet users, not as xRapid. The Interledger Protocol (ILP), created by Ripple as a protocol to link several ledgers or payment networks, is the foundation upon which xCurrent is constructed.

The four basic components of xCurrent are:

• Messenger – Peer-to-peer communication across RippleNet’s financial institutions is facilitated using Messenger. It is used to share data on fees, FX rates, projected remittance periods, risk and compliance, and payment specifics.

• Validator – This program coordinates money transfers on Interledger and uses cryptographic techniques to verify if a transaction was successful or unsuccessful. Financial institutions have the option of using independent third-party validators or operating their own.

• ILP Ledger – ILP Ledger is created by integrating the Interledger Protocol into already-existing bank ledgers. Tracking credits, debits, and liquidity between trading parties is done through the ILP Ledger, which serves as a supplementary ledger. Fund will be settled as soon as possible, whether it is possible or not.

• FX Ticker: FX tickers are used to determine exchange rates between trading parties. It tracks the current status of each configured ILP Ledger.

xRapid technology

xRapid is an on-demand liquidity solution, based on the XRP token to help with liquidity. This is done by converting the initial funds into XRP and from there into beneficiary funds.

This allows the issuing bank to avoid having funds in a correspondent bank account in the beneficiary’s country or relying on another financial enterprise to provide the beneficiary bank with the correct amount in accordance with domestic currency and incurred expenses.

There are already a few payment distribution managers like Western Union and Moneygram experimenting with the platform.

xVia technology

xVia is a user interface and layout that aims to simplify the use of xCurrent and xRapid. Through API integration, Financial institutions utilizing Ripple products can now be connected, track payments, and create invoices.

Pros and cons of Ripple coin (XRP)

Should you invest in Ripple Coin (XRP)?

Currently, XRP is ranked 7 in terms of market capitalization in the cryptocurrency market (previously it was ranked 4th). However, unlike some other types of cryptocurrencies, Ripple Coin (XRP) cannot be mined, and there are only 100 billion XRP tokens (all of which have been issued). About 53,62% of these are in circulation, while the rest belong to the assets of Ripple Labs.

The number of XRP tokens will gradually be unlocked and transferred to the market little by little, expectedly at 1 billion each month. This means that the supply of Ripple Coin will always be controlled, avoiding the situation of flooding the market causing inflation and devaluation.

Ripple Coin has also proven its strengths in fast money transfers and low costs. In addition, the large company behind it always focuses on promoting it and developing it further.

=> Ripple Coin (XRP) holds a prominent position in the cryptocurrency market, with various utilities, stable price increases, and significant developer attention, which suggests that it may have more potential for future expansion and development.

However, cryptocurrencies in general often carry high risks, but XRP is even riskier compared to conventional currencies. If you are considering investing in XRP, please note:

• SEC lawsuit could have a negative impact on Ripple Coin in the future.

• Ripple’s main competitor, SWIFT, has maintained a strong foothold in the banking industry.

• Ripple’s success does not necessarily equate to XRP’s success, as most financial institutions working with Ripple do not use XRP.

• XRP is not readily available for purchase on many leading cryptocurrency exchanges in the United States.

Should you invest in Ripple Coin (XRP)? Perhaps no one can accurately answer that. But if you believe that Ripple has the potential to achieve a favorable outcome in the lawsuit with the SEC, then consider investing in it. And remember to invest only an amount that you can afford, as despite its potential, success is not guaranteed.

Where to buy and sell XRP (Ripple Coin)?

Currently, there are numerous exchanges that support XRP trading such as Huobi, Binance, Bitfinex, Bithumb, Mxc, OKEx, and many others. If you are interested in investing in XRP, you can consider the Binance or Huobi exchange, as these are two platforms with very low transaction fees, high liquidity, and widely used by many people.

Where to store XRP (Ripple Coin)?

There are several types of wallets available for storing XRP, but it’s crucial to choose a secure one to avoid hacking. You can consider the following options:

♦ Exchange wallets: As exchanges typically provide cryptocurrency wallets for their customers, you can comfortably store Ripple Coin as well as other coins after purchase. Binance and Coinbase wallets are highly recommended.

♦ Hardware wallets: These are physical products for storing cryptocurrencies that are not connected to the internet, making them difficult to hack or manipulate. Ledger Nano S or Trezor are great options to consider.

♦ Software wallets: These are applications for storing cryptocurrencies on mobile phones and computers. While not as secure as hardware wallets, they are safer than exchange wallets. Exodus or Jaxx Wallet are recommended options.

Lesson to remember

• Ripple Coin, also known as XRP, is a currency of the Ripple platform. Ripple is the company behind XRP.

• Ripple Coin (XRP) boasts very low transaction fees and faster transaction times, giving it an edge over Bitcoin.

• Instead of using blockchain mining, Ripple Coin employs a consensus mechanism through a group of servers owned by banks to validate transactions.

• Ripple is currently embroiled in a lawsuit with the SEC, and the outcome of this lawsuit will significantly impact the potential of Ripple Coin in the future.

• At the time of writing, Ripple Coin (XRP) is ranked 7 in the market capitalization rankings of all digital currencies.

Here are the detailed insights into Ripple Coin (also known as XRP). Hopefully, the analysis on invest286.com has helped you to understand what Ripple is, what XRP is, and to have the most accurate and comprehensive view of this cryptocurrency. Investing in the Crypto market, no matter the coin, always involves risk. The true value of Ripple lies in its payment system, not in the XRP coin, not to mention that Ripple’s ongoing litigation with SEC could significantly affect XRP’s price and Ripple’s plans for the coming year could also be delayed due to this lawsuit.

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However, the potential of XRP in the future is undeniably large, and recently many banks and large businesses have participated in testing Ripple’s technology, which is seen as a positive signal for broader acceptance of Ripple. Considering various factors, XRP is still regarded as a good long-term investment. Remember, the cryptocurrency market is highly volatile, so plan your capital management carefully and do not invest more than you can afford to lose.