BloggingBusinessFinance

Six Possible Misunderstandings about XRP and Ripple

Overview

In 2012, Ripple was released and since its inception, it has gained huge popularity and has become the third biggest cryptocurrency after Bitcoin and Ethereum by market cap. XRP & Ripple are used interchangeably, yet they are different. XRP is a cryptocurrency developed by Ripple Labs to be used in its financial products. It is used in payments, money transfers, international remittances, etc. One of the important facts about XRP is that these coins are “Pre-mined” using a smart contract system.

Ripple and XRP

  • Ripple is the company behind the XRP token and it is not a cryptocurrency. Its Labs Inc is known as the payment solution company. It is focused on using cryptos for facilitating cross-border payments between two countries. To accomplish this, it has its payment network, Ripplenet.
  • Ripple is designed by Ripple Labs to be used for making international payments and currency exchange. When it was launched, XRP was used to power its cross-border transactions network. It has been updated regularly so that the users can utilize them to send currency with XRP.
  • Buying Ripple in India is now easy. As of today, the ripple price in India is 88.14 INR.  To buy them in India, first, check the ripple price INR at the WazirX exchange that has the lowest fees. People can buy Ripple using their debit card, credit card, bank transfer, and some of the methods supported by the exchange.

Misunderstandings about XRP and Ripple

Here are the six misunderstandings about XRP and Ripple that help the users to familiarise themselves with them.

  1. XRP is not a Cryptocurrency

One of the misconceptions is blockchains use proof-of-stake or proof-of-work through mining for verifying the transactions and it ensures decentralization of the network by offering rewards for unlocking new blocks. On the other hand, XRP uses a consensus mechanism and does not offer rewards for its participants.

 

  1. Ripple cannot be mined 

Bitcoin circulating supply increases because of the mining process where the participants use their computing power for processing the transactions to exchange newly mined blocks of tokens. All 100 billion XRP tokens created already exist even though not the full quantity is in circulation.

 

  1. Ripple is not designed for payments

One of the major misconceptions about cryptocurrency is that people think that cryptocurrencies are created to be used as a method of payment. But, it is not designed to be used as payment currencies. In simple words, retailers might not accept XRP tokens and it is fine with Ripple Labs.

 

  1. The transaction cost of Ripple is very low 

One of the major obstacles faced by cryptocurrencies is the transaction cost. Moreover, the transaction fees of Bitcoin have become high and it increases every year. This makes Bitcoin not practical for everyday transactions for payment. This problem is not faced by Ripple as the transaction cost is very low.

 

  1. XRP is not Decentralised

Proof-of-work or proof-of-stake relies on calculating hashes for verifying transactions and for unlocking rewards. But XRP does not rely on proof-of-stake or proof-of-work but uses a consensus mechanism that is immune to double-spending.

 

  1. Hidden Fees of XRP 

If a user uses an XRP ledger it comes with a cost and in several cases, the user decides how big the cost can be. The size of the fee determines how the transaction is prioritized and charging a higher fee will guarantee faster transactions. When compared with other blockchains this fee is not returned to the central authority or paid as a reward to the validators; instead, it is burned, which makes XRP a deflationary currency.

In Conclusion

XRP is a cryptocurrency that has been gaining interest in financial cross-border transactions to facilitate it. XRP is faster than Bitcoin while it will take only a few seconds for a transaction to be processed when compared with an hour or more with other cryptocurrencies for carrying out international payments. People are showing interest to invest in Ripple in India. To buy Ripple, first, they need to find out xrp to INR and purchase it for long-term investment.

Hope you love reading this. What were the interesting parts? When you were reading this content, Share your suggestions, feedback in the comment box to improve the quality of the content more for its readers.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button