Since the appearance of Bitcoin in 2009, many cryptocurrencies have emerged over the years, creating a new alternative currency market to the conventional one.
What is XRP and what does it consist of?
One of these new digital assets is XRP, created in 2013 by members of what would later become the Ripple Labs company. Its functioning and features are far from other well-known examples, such as Bitcoin and Ethereum. It has long been considered a “currency” by and for banks, which is why the cryptocurrency community has created a false image of this digital asset. However, at the level of market capitalization it has always remained at the top and its progress in both marketing and development has been palpable. In this article we will try to find out what XRP is and what’s behind it.
Although according to the words of one of its creators (David Schwartz, current CTO of Ripple), XRP was originally created without the intention of solving an existing problem, after completing the project, they decided to move towards international payments and replace the current problems.
Ripple, the company that currently generates blockchain- and XRP-oriented products and solutions, explained it in a very graphic way. It’s faster to grab a briefcase, fill it with money, and buy a plane ticket to the country you want to send the money to than it is to make an international transfer through your bank.
In what situations is it useful to use XRP?
Ripple’s approach to improving the international transfer system is simple. Use XRP as the currency from the starting point to the end of the transaction. Therefore, banks or entities that send money should not have several currencies in their bank accounts in order to be able to change the client’s currency (this creates a risk if the currency you hold depreciates). For example, we will send euros to US dollars via XRP. First the euros would go into XRP and then they would be exchanged for dollars. All this in seconds. It would not be necessary for the issuing or receiving bank to have both currencies. Furthermore, it is currently also possible to trade on the official Crypto genius website, which allows you to trade cryptocurrencies.
This works thanks to one of the characteristics of XRP, its transmission speed. Not using a confirmation method like PoW (Proof of Work), which Bitcoin and Ethereum share (Ethereum intends to abandon PoW among its ETH 2.0 upgrade plans). To send the same amount of money in Bitcoin it would take half an hour and in Ethereum about fifteen minutes, depending on the state of congestion of your networks. XRP would only take a few seconds.
Other examples that could be addressed with XRP would be payments in different currencies for Airbnb rentals or immediate payment to Uber drivers, instead of waiting until the end of the month.
Variations to the use of XRP
In addition to its use as a solution for international payments, the community wanted to give others. For example, XRP Tip Bot is a bot for Twitter, Reddit, and Discord. The other person receives XRP instantly. In case you don’t have an account (wallet) to save XRP, the tip can be printed and the person can redeem it. An amazing prototype thanks to the ILP (Interledger Protocol) and a Raspberry Pi consists of turning on a light in a room or house every time payments are received. There is also a strong informational intention that seeks to clarify all the chiaroscuro that this technology may have.
We will have to wait a few years to find out if XRP has achieved its mission. The Internet of Value (IoV) is yet to come. Both XRP and other solutions are building it little by little.