There are thousands of cryptocurrencies, and it is very hard to know all of them. However, Ripple (XRP) is one of the most interesting cryptocurrencies in the world.
It is a cryptocurrency token designed to migrate transactions from central databases controlled by financial institutions to a more open infrastructure while significantly reducing costs. XRP transactions are trustless, instant as well as cheap, putting XRP transactions at an advantage for cross-border movements.
We have to mention that the software enabling the use of XRP proposed a new way of operating blockchains that supporters claim is more suitable for transactions.
As a reminder, the Bitcoin blockchain allows anyone to contribute computing power, validate transactions, and secure its software. The XRP Ledger, on the contrary, only allows select network participants to help validate transactions and secure the network. There are more than 150 of these participants in the network, collectively known as the Unique Node List. Important question: Is XRP decentralized?
One Interesting Fact: At launch, 100 billion XRP tokens were pre-mined and subsequently distributed to specific individuals, companies as well as the general public through gifts and giveaways. Back then, the move led to concerns surrounding its decentralization as a few entities controlled a large supply of the coins.
Furthermore, XRP’s involvement in the market relies on a for-profit company called Ripple. The company acts as the main player in the XRP ecosystem. The above-mentioned company helps maintain the XRP Ledger and plays a pivotal role in its development while being a significant XRP token holder.
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Ripple and XRP are they the Same?
To cut a long story short, no, they aren’t. It’s important to keep in mind that they aren’t the same thing: XRP is a cryptocurrency while Ripple is a for-profit company. The company is developing XRP, the software behind it (the XRP Ledger), as well as numerous other transaction-focused projects.
According to the company, the XRP is faster as well as less costly compared to other digital assets. The above-mentioned company was founded in September 2012 under the name Open Coin.
In 2013, OpenCoin changed its name to Ripple Labs before the company finally settled on Ripple in 2015. Furthermore, the XRP Ledger was initially called the Ripple Open Payments System and moved to the Ripple Consensus Ledger, before becoming the XRP Ledger.
After the XRP Ledger was functioning, its developers decided to gift tens of billion tokens to a private company that would work with the community to support the cryptocurrency. That company, Ripple, claimed to have been methodically selling XRP and using XRP to “incentivize market maker activity to increase XRP liquidity and strengthen the overall health of XRP markets.”
Lastly, XRP was initially the ticker symbol for “ripples” or “Ripple credits,” but over time, it dropped these names in favor of just XRP to avoid confusion.
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