Founded in 2012, Ripple is the third-largest cryptocurrency (after Bitcoin and Ethereum) based on market capitalization. The idea behind Ripplenet is to expedite the process of everyday payments while improving the current global payments systems, making the transactions quicker, cheaper, and safer than Bitcoin. Ripple decided to introduce a built-in token as a first step to achieve the desired goal, XRP as their currency transfer tool.
With XRP, the organization attracted the banking sector & huge financial institutions such as Santander or American Express using a unique blockchain that has the power to validate its transactions 215 times faster than Bitcoin. Additionally, there are no restrictions or regulations to mine the currency to acquire it. However, the process of placing financial institutions on a single network for transacting using Ripple Technology is known as RippleNet.
A Brief about RippleNet
RippleNet is a decentralized blockchain network platform based on a consistent set of payment rules and regulations. All functional bodies or investors, including Ripple, have to follow the same technology and agree on the terms. Currently, the participants on RippleNet are banks (for payment processing), Payment providers (for supplying liquidity), Businesses (for sending disbursements), and lastly, Consumers (for sending global payments).
Is RippleNet a good investment?
Ripple is one of the fastest blockchains, sharing transaction speeds ranging from two to four seconds. Whereas, with the other leading cryptocurrencies it is a matter of minutes. When it comes to talking about safety, there is no such thing as 100% security in investment.
If you are not sure about investing in Ripple, we have got you covered. In the below-mentioned column, we have listed down the pros and cons to help you out!
Pros:
- Unlike other blockchain startups, Ripple is an official organization that has built a trustful connection with banks all across the world.
- All the XRP tokens are initially mined and already exist in the network; there is no risk of inflation to the investors.
- With increasing engagements of banks, the XRP’s value increases exponentially. Supposedly, in the future, if banks decide to go with a unified bank currency, there is a higher likelihood for early investors of Ripple to earn a fortune.
Cons:
- Ripple shares an idea similar to bank investments contradicting the entire concept of decentralized cryptocurrencies. Those interested in taking the benefit of volatile behavior may not like to invest in Ripple.
- Due to centralization, Ripple Labs own a good share of 61% of the coins, establishing its monopoly in the market.
- The idea of an open-source network is picking up but the risk of easy access to code is always involved. Investors have to ensure to take steps to mitigate traps of hackers in the network.
Conclusion
Before investing in Ripple, understand the difference between other cryptocurrencies and Ripple; they might share the same crypto umbrella but have entirely different motives & functions. Ripple’s adoption has transformed the financial sector and moves towards creating a global payment system better in the coming years.