When you hear the word, cryptocurrency, I bet the first word that comes to your mind is Bitcoins. But the crazy world of cryptocurrency does not end with just Bitcoins. There are many other cryptocurrencies like ether, lite coins that are also making headlines these days.
But have you heard about Ripple? If not, then stick around and read this article to the end as I guide you through all the details you need to know about Ripple. Many investors do not consider Ripple to be a proper cryptocurrency. Ripple acts as a network for transactions apart from being a cryptocurrency. Ripple is also referred to as XRP.
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Some investors do not consider Ripple to be a genuine cryptocurrency because it acts more as a digital payment platform than a cryptocurrency. The best part about it is that it allows transactions in both fiat currencies and cryptocurrencies. Ripple platform mainly supports USD, but it has now started supporting The Japanese Yen and Russian rubble. The currency of Ripple is XRP, which serves as an alternative to Bitcoin. Let us know a little more about XRP.
Five reasons why people don’t consider Ripple to be a proper cryptocurrency
There are a ton of differences between Bitcoins and Ripple, but for the sake of convenience, I am going to list only 5.
1. Nature of cryptocurrency
Bitcoin is the most popular cryptocurrency; it is used for investing as well as for trading. Ripple is used for settling payments; apart from just settling payments, Ripple allows its users to exchange currencies and use it as a system for receiving remittances from banks. The main purpose of Ripple is to settle payments with assets.
Another major difference between Ripple and Bitcoin is that Bitcoin is based on the Blockchain technology, which is the most sought-after technology in the world, whereas Ripple does not work on Blockchain, which sets it apart from other cryptocurrencies. All the famous cryptocurrencies that work on Blockchain accept XRP.
2. The Actual token XRP
XRP can only be used in the ripple network. It works as a facilitator between two parties to transfer money. The ripple network exchange takes a hefty amount of fee, whereas Bitcoins work on Blockchain technology that takes up to just 10 minutes for any transaction. Also, in Bitcoins its peer to peer with no intermediaries in between.
3. Where to spend Ripple?
When Ripple was first invented, it was not intended to be used as a currency. Even though a few merchants accept Ripple as a payment method, these people are mainly traders of hot sauces and jewelry. At the same time, Bitcoins can be used for all sorts of trading and investing. Most countries have already accepted Bitcoins.
4. Ripple is Not Decentralised
Unlike Bitcoins, Ripple is not decentralized. Decentralization is one of the main bases of cryptocurrencies, and Ripple does not have it, so it is not genuine crypto.
Ripple is already premixed and is in circulation. Most cryptocurrencies can be mined to a limit. For instance, Bitcoin is limited to 21 million, whereas a limited number of Ethereum can be mined per year. All these factors make Ripple an unsuitable cryptocurrency.
XRP is more of a bridge currency that serves as a bridge to other currencies. It has the capability to give a very tough competition to Bitcoins as it is non-volatile. It does not make a difference between cryptocurrency and other fiat currencies.
It treats all currencies equally and allows them to work on their own basis. There are a lot of factors setting Ripple apart from the other cryptocurrency.