There is a coin in the cryptocurrency world that is considered a cryptocurrency when in fact it is not.
We are talking about XRP, created by the company Ripple. In common parlance XRP and Ripple have become synonymous, but the token’s only name is XRP. This coin was not created with the idea of being a more functional alternative to Bitcoin, but to be a tool in the hands of the banking world by creating an alternative system to Swift.
XRP is not a real cryptocurrency because it is not totally decentralized.
In fact, Ripple began in 2012 as a system for transferring funds through a network for currency exchanges. In September 2018, Ripple was the second largest coin in the cryptocurrency market by market capitalization.
Ripple controls and manages XRP and has agreements with banks around the world. its code is open source and the value of the coin is affected by the value that is also assigned to the company.
Ripple was created solely to replace old systems such as swift, western union and moneygram with a cheaper system. Not all banks are connected to each other in the world with a single system. This forces banks to switch between different intermediaries in different countries, with long time and big cost for every transactions.
XRP is not created to be a store of value or to make transactions between economic actors in the real market but as a technical tool for specific banking actors or Payment Systems, companies, corporations, currency exchanges.
Because of its characteristics, Xrp cannot be mined but is a pre-mined currency. XRP is fast and scalable, in fact transactions in XRP take about 4 seconds versus 5-10 minutes for btc
XRP’s wallet works with a minimum deposit of 20 XRP, an sistem created to avoid inordinate growth of accounts on its network for the sole purpose of clogging up the network and slowing it down.
The token is divisible up to 6 digits after zeros and some XRPs are destroyed after each operation, another system to protect the network. In the event of an attack, with thousands of useless transactions for the sole purpose of slowing down network, this system drains the accounts of the addresses that create the transactions.
Ripple’s protocol is called rtxp Ripple Transaction Protocol and consists of pcs called validators that manage the network with their shared ledgers. Companies wishing to use Ripple’s network must use gateways, which are points managed by banks and useful to those outside the network.
Ripple Labs was created only to offer banks various types of products, in fact RXTP is open source but the ripple products offered to banks are not and are created and developed only by ripple labs.