XRP and the SEC
Fast and eco-friendly, XRP was designed to be the most practical cryptocurrency for financial industry applications. It did, to some measure, achieve its goal. However, controversies never seem to let go of one of the most valuable cryptocurrencies in terms of market capitalisation. Continue reading to find out how far the Ripple spreads.
- Ripple is a blockchain-based digital payment network and protocol, as well as the creator of its own cryptocurrency, XRP.
- The network facilitates cross-border transactions in a matter of seconds for a very low price. To confirm transactions, Ripple employs a consensus process via a set of bank-owned computers.
- Ripple transactions consume less energy than bitcoin transactions, are completed in seconds, and are extremely inexpensive.
XRP is an altcoin that enables trustless, instant and cheap cross-border payments. The cryptocurrency is native to Ripple – a digital payment and currency exchange network that can process transactions globally. Ripple was designed to replace SWIFT (a leading money transfer network) or otherwise replace the settlement layer between major financial institutions.
Traditional financial channels usually take a few days to complete a wire transfer. In the process, they also charge sizeable fees for conducting cross-border payments. Ripple aims to improve on these constraints with the traditional banking system. Ripple network executes transactions in seconds with high throughput. The transaction fee is minimal - 0.00001 XRP for a standard transaction.
In essence, XRP has the following features that differentiate it from other currencies popular currencies:
- 1.It's not mined like Bitcoin or Ethereum. Instead, all 100 billion XRP tokens were created when the currency was launched. This means there is no inflation, and the supply of XRP is fixed.
- 2.Transactions on the RippleNet network are very fast. They can be completed in just 4 seconds faster than Bitcoin or Ethereum.
- 3.XRP is much cheaper to use than other cryptocurrencies. Transactions fees are just a fraction of a penny, which makes them ideal for large-scale payments.
Ripple's and its native token's concept predate the crypto sector and Bitcoin itself. RipplePay, a peer-to-peer (P2P) financial network founded by John Fugger, debuted in 2004. The idea was to use the financial connections between network users to remove the need for banks.
Subsequently, the XRP Ledger was created in 2011 by three engineers: David Schwartz, Jed McCaleb, and Arthur Britto (XRPL). Inspired by Bitcoin, they set out to develop a better version that improved its limitations and would prove to be a more sustainable digital asset designed exclusively for payments.
In the following year, the XRP Ledger was initially launched. Soon, Chris Larsen joined the core team, and the trio founded the Company NewCoin in September 2012. NewCoin was quickly renamed OpenCoin and finally named Ripple.
Ripple's primary goal is to improve the current and fragmented traditional banking system.
It accomplishes this by bringing together a network of independent banks and payment providers using a standardised protocol to interact and deliver low-cost, instantaneous payments worldwide. Ripple is made up of two major components:
- Ripple: Ripple is a network that offers a real-time gross settlement system (RTGS), currency exchange, and remittance services. RippleNet, the platform's blockchain payment technology, allows instantaneous transactions between financial firms.
- RippleNet: RippleNet is a separate network of payment facilitators and institutions that enables participants to make and receive payments using Ripple's distributed platform easily.
XRP, like Bitcoin, stores transaction information on a public ledger called the XRP Ledger.
However, the ledger-based payment network does not use mining to validate and record new transactions. Rather, the XRP Ledger requires trustworthy validator nodes to obtain consensus and maintain the transaction ledger in record time – typically every 3 to 5 seconds. The Unique Node List, or UNL, is a collection of these trustworthy nodes.
Therefore, in contrast to Bitcoin and its proof-of-work consensus algorithm, the XRP Ledger employs a Proof of Stake consensus method. Pull quote: Because the XRP ledger does not require mining, its native cryptocurrency, XRP, was pre-mined from the start. In 2013, a total of 100 billion XRPs were pre-mined and launched.
- Fast settlement: Transaction confirmations generally take four to five seconds.
- Low fees: The cost to complete a transaction on the Ripple network is 0.00001 XRP.
- Used by large financial institutions: XRP is designed to work as a transaction medium for large-scale enterprises.
- Partially centralised: One of the reasons that cryptocurrencies became popular is that they were decentralised, taking control away from large banks and governments. The Ripple system can be somewhat centralised because of its default list of validators, which goes against this philosophy.
- Fear of dumping: Most of the Ripple supply is not in circulation but held in escrow. There is an uncertainty that large quantities may get introduced abruptly, which could harm XRP's value.
- SEC action against XRP: The SEC filed a lawsuit against Ripple in December 2020, claiming that because it can select when to issue XRP, the business should have registered it as a security. The corporation has refuted the charge. The legal battle continues to date.
The daily chart shows the price movement in a channel as indicated in the diagram. The upward sloping RSI indicates that there is a strong momentum for a breakout once the prices move beyond the channel. Once that happens, the following levels will be crucial:
Resistance 1: 0.4255 R2: 0.4716 R3: 0.5795
XRP can be purchased from multiple cryptocurrency exchanges, including but not limited to Scallop Exchange.
Remember that cryptocurrencies are very volatile investments and that previous performance is never a guarantee of future outcomes. Any investment decision should be based on risk tolerance, market knowledge, portfolio diversification, and how comfortable you are with losing money. A BNB coin forecast is based on previous data and does not reflect all market situations. Never put more money into something than you can afford to lose.
According to this history, the firm has survived several issues and legal disputes up to this time while also continuing to attract high-level organisations to cooperate with RippleNet. However, the value of XRP and the popularity of the payments network have held up quite well in the face of Ripple's present issues with the SEC.
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