In 2012, the US-based tech company Ripple Labs bloomed with the blockchain called Ripple network with its cryptocurrency, the XRP. Decentralization, swiftness, energy efficiency, reliability, and low transaction charges, form the proud foundation of this most coveted crypto.
The shocking episodes of legal proceedings filed by the United State Securities and Exchange Commission in 2020 on Ripple and a couple of its esteemed executives held back XRP’s proliferation momentarily. This episode caused a major setback in XRP’s growth, as the other cryptocurrencies were moving ahead hastily. Nevertheless, with the legal proceedings settled favorably, the traversing path appears clear for XRP to restore its former fame, reputation, and glory in no time. Certainly, XRP is poised to surpass other major cryptocurrencies very soon frantically.
Potential Ripple Effect On Cryptocurrency Market
With the aftermath tagged as the Ripple’s effect, the investors wondered about the impact of its outcome on the crypto market. However, the hope that the XRP Ledger will take things forward keeps XRP crypto moving with certainty.
The XRP Ledger hailed as the backbone of the entire XRP environment, is an open-source, distributed ledger that bestows a public, shared database for making payments, accomplishing exchanges, and various other transactions. The ledger utilizes the consensus algorithm to guarantee its integrity without relying on miners or proof of work (PoW). However, it depends on an iterative pattern wherein every node chooses other nodes to verify transactions and append them to a never-ending list called the chain. The longer the chain, the greater the confidence in it. The handful of merits concerning the XRP Ledger is its speed, scalability, security, reliability, cost efficiency, decentralized nature, interoperability, transparency, and customer support.
Regarding speed and scalability, the XRP Ledger outstands every other existing blockchain protocol. With a lightning-like transaction speed of up to 1500 successful transactions per second, the XRP Ledger outwits the transactions made by traditional methods. Hence, XRP casino sites are welcomed by players around the globe. The network also has the potential to scale up as per the requirement by appending new servers worldwide. This accomplishes handling innumerable transactions with minimal delay.
The considerably lower transaction charges attract businesses focussed on saving their hard-earned money without compromising the security features. The XRP Ledger lets you accomplish cash transactions to every nook and corner of the world without additional charges. The absence of transaction charges is also due to the absence of miners in processing transactions.
Ripple has strategically partnered with a handful of financial institutions: the National Bank of Abu Dhabi (NBAD), UniCredit, the Canadian Imperial Bank of Commerce (CIBC), Reisebank, ATB Financial, Santander, and UBS.
XRP’s integration into DeFi platforms and protocols
An open-source platform called the Injective Protocol makes creating DeFi (Decentralized Finance) applications possible. This protocol has witnessed a skyrocketing increase after it declares its choice to blend Ripple’s XRP into its ecosystem. This integration focuses on unlocking brand new courses of action, especially for crypto enthusiasts, unfurling chances for innovative use cases. By inducing XRP to its trading pairs and intensifying liquidity for XRP and USDT, the Injective protocol stiffened its stance as a pioneering platform in the decentralized exchanges realm. Parallely, the overwhelmingly positive response exhibited by the market results in a significant hike in Injective’s valuation.
XRP Comparison with Other Major Cryptocurrencies
Moving on to ponder over the strengths and weaknesses of XRP as against Bitcoin, Ethereum, and others,
- XRP functions on the distinctive, distributed consensus mechanism employing nodes to authenticate transactions.
- The intricate exhaustive mining procedure employed in cryptos like Bitcoin, Ethereum, and others demands enormous time and transaction charges. But XRP-based transactions are acknowledged within seconds, coupled with awfully low transaction charges.
- XRP has more coins (one hundred billion XRPs) in the cryptocurrency market, as against Bitcoin with much less (21 million bitcoins).
- XRP differs from other cryptocurrencies in its circulation mechanism. Any unused chunk of XRP is sent to the escrow account every month to ensure avoiding the surplus supply of XRP tokens.
- The recent legal proceedings on XRP, lack of appropriate “tokenomics” for price appreciation, accelerated competition arising from private-based companies, and is not welcomed by banks for transactions to be settled within Ripple protocol fall among the weaknesses of XRP.
The prominent challenge XRP encounters from its competitors is from banks and government-controlled financial firms. They have ventured with their brand new digital currencies to accomplish interbank transactions. However, by improving its security and compliance norms, XRP is determined to overcome the challenges faced by its competitors potentially.
XRP provides a unique value proposition in the cryptocurrency market in the cross-border transactions domain. With the rising international cash transactional costs, increasing periods, and pressure from intermediaries about traditional methods, XRP focuses on providing a smooth and structured alternative.
Conclusion
With its potential beyond human comprehension in overcoming regulatory challenges, operational challenges, and legal proceedings, XRP is poised for wild outperformance shortly. With its unique traits like security, swifter transactions, reliability, scalability, and assured connectivity, XRP is all set for a glorious comeback in the near future. Addressing its regulatory challenges empowers XRP with even better security and reliability features. Ripple’s selling pressure will accelerate in days to come, mainly due to the regulatory hurdles. The allegations made have ended up in XRP being removed from certain exchange ecosystems. However, the forthcoming handful of weeks is guessed to be quite challenging for XRP because, in spite of its elevating price, it can change the situation for itself.