What is Ripple?
Ripple (XRP) is an open-source protocol that provides the foundation for a payment system. The idea came from Ryan Fugger but was later developed by Ripple Labs. XRP is intended to be a distributed peer-to-peer network, which serves both as a payment method and as a foreign exchange market.
The final protocol should be compatible with every known fiat and cryptocurrency. The core of XRP is a public database containing a register of account balances. Each user can view this tab and track all completed operations on the Ripple network.
Furthermore, the register can be used to obtain information about buying and selling offers. This gives the trading center the property of a distributed trading center.
To make changes in the network, a consensus procedure is used. On average, the consensus is updated every 2 – 5 seconds. As a result, goods can be traded without a central clearinghouse, and simplicity in payment transactions can be guaranteed.
XRP as a cryptocurrency
In addition to the use of XRPas a payment protocol, Ripple is also traded in the form of the Ripple token on the crypto markets. This token is known as XRP and is sometimes referred to as Ripples.
The token was designed especially for the trade as well as for value conservation. Developers have set the currency to currency neutrality so that the token can be traded independently of any currency.
In addition, the currency should fulfill two basic network functions. This prevents network spam and focuses the function as a bridge currency in trading with other tokens. The avoidance of network spam is done by destroying a minimum token amount.