The role of XRP in Ripple’s products
XRP is a digital currency that is issued and partly managed by Ripple company. They both share the same native and complement each other through independent features.
Like any other cryptocurrency, XRP also offers cross-border transactions, investments and exchanges to its users through the Ripple network. Every crypto exchange platform in India provides XRP coins as one of the cryptocurrencies to trade and invest in.
Many people unknowingly interchange the two terms, thinking of them to be the same. However, they are totally different from each other.
By the end of the article, one will understand the role of XRP in Ripple’s products and the underlying differences between them.
First, let us just go through the brief introduction of the two.
What is Ripple?
Ripple is a payment solutions company based in San Fransisco. It is also the majority holder of the cryptocurrency- XRP. The company mainly develops software for banks to utilise fast, global transactions powered by the network’s underlying crypto technology. This platform is the most successful and widely used by large financial institutions to enable cross-border payments. More financial companies are ready to join Ripple’s growing network also called RippleNet to process customer payments with security and reliability.
Furthermore, the company placed about 55 billion XRP coins in a secured escrow account from which only 1 billion coins can be released every month.
Apart from XRP, Ripple also deals with xCurrent and XRapid, a network used by banks as messaging solutions and latter allow financial institutions in converting fiat currencies into XRP efficiently.
What is XRP?
It is an independent digital currency based on the ripple network. It is also an integral part of Ripple’s valuation system. One can buy XRP from various crypto exchanges. The technology behind the cryptocurrency is called XRP ledger which acts as a blockchain where the XRP tokens reside.
The crypto came into existence being an upgrade of Bitcoin with the aim of solving issues of high transaction cost and slow speed associated with the best cryptocurrency in India.
XRP offers less cost with as little as 4 seconds time limit compared to bitcoin which takes 1 minute to complete a transaction.
After understanding the meaning and purpose of the two, let’s come down to the significant role of XRP in Ripple products.
- Role of XRP as a currency
XRP role is very similar to the national currency. It acts as a bridge currency that can be used for numerous international trade transactions and currency conversions. It is especially utilised at the time of converting currencies of very thinly traded international markets.
While XRP helps different products of Ripple in multiple ways, it provides some extra advantages to the xRapid in carrying out the transactions. It offers more liquidity, fast speed, reduced loading time and which is appreciated by many companies and investors.
- Role of XRP in security
Many controversies were surrounding the market between the years 2018-20 that whether XRP contributes as a security measure in Ripple network or not. There is no such evidence or conclusion of this debate. Though with knowledge and practical implications, we can say that XRP does provide certain safety and protection, being private crypto to other Ripple products.
XRP has an underlying role in performing several of Ripple’s activities and products. However, the clear definition of that role and its dependence that may exist between the two is still vague and quite not understand yet. Just the cryptocurrencies are unregulated and their definition as currencies and investments are undetermined. Nevertheless, XRP is one of the digital currencies available in the financial market which can be traded in different crypto exchanges in India like Wazirx, Zebpay, etc. If one wants to start his/her journey into crypto trading and investment, XRP can be the best option to begin with.