As with any popular cryptocurrency, there is a lot of excitement around XRP. XRP is gaining buzz every day, but there are still a majority of people who confuse it with Ripple. While Ripple is a payment platform which is meant for rapid and seamless transactions, XRP is a cryptocurrency from XRP Ledger, on which Ripple is based. It means XRP can exist independently, even without Ripple.
Differences Between XRP and Ripple
- Ripple is a technology company that was founded to make global transactions easier. It is owned by board members, founders, employees and investors of Ripple.
XRP comes from XRP Ledger, which is an independent open-source blockchain technology. No individual or business has ownership of XRP Ledger.
- Ripple is an RTGS (real-time gross settlement system) payment platform. This software is a rapid and easy way of currency exchange. On this remittance network, you can make quick transfers of any form of currency. You can make transactions in fiat currencies like Yen, Euro or USD, metals like gold and airline miles.
On the other hand, XRP is the cryptocurrency which is used to make the transactions on the Ripple platform. XRP is the token or digital asset that Ripple uses for payment transfers.
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- Ripple software is used only by financial institutions, whereas any individual or business can use XRP, build on XRP Ledger, own the token or list it on currency exchange.
- While the complete control of Ripple lies with the employees with stocks, founders and board members, XRP Ledger can be controlled by their own community who deal with XRP.
- The main relation between the two is that XRP and XRP Ledger are used by Ripple on the product XRapid. Initially, 100 billion XRP tokens were mined by Ripple. Around 61% XRP (61 billion) are owned by Ripple. Out of this, nearly 55 billion XRP are held in escrow accounts of Ripple.
Now that we understood relations and contrasts between these, let us know more about XRP token.
How XRP Differs From Other Cryptocurrencies
The main difference lies in how XRP is mined. Unlike other crypto coins that are mined or rewarded from time to time, all the XRP tokens are already mined. Just like companies release initial shares to the public, Ripple released 100 billion XRP tokens at one go. And there will be no more mined.
Ether has no limit on how many coins are mined and Bitcoins are rewarded to encourage the usage of the network. But Ripple has already created a fixed number of coins and will only release when needed.
Blockchain-based cryptocurrencies are used in peer-to-peer transactions. They are actually designed to get rid of middlemen and interference from the government. But XRP token is created to act as a mediator for all financial institutions in their day-to-day payments. It is seen as a ‘bridge currency’ that converts different international currencies. Costs of transactions are very low for XRP.
- Speed And Control
XRP global transactions take only 4 seconds to complete. This shows how fast the payments can be made compared to other cryptocurrencies. For example, Bitcoin payments can range from 10 minutes to 15 hours, depending on network congestion.
No person or entity controls Bitcoin and other blockchain-based cryptocurrencies. Their technology is fully decentralised. XRP is quite opposite as Ripple owns 61 billion tokens which were created. The other tokens are on the open market. Ripple has the control to release the tokens held in escrow accounts to its clients.
While other cryptocurrencies shy away from banks, governments, and financial institutions, Ripple and XRP are meant for their usage.
With such an interesting line up of benefits, there is no doubt that XRP is going to rule bank transactions in the near future. With this emerging technology, we can possibly see a revolutionary change in the monetary system.