At current Ripple or XRP is the second crypto according to the market cap. Today I gonna tell you What actually XRP or Ripple coin, How does Ripple work and other things you should know.
What is Ripple (XRP)
Ripple is cryptocurrency and an open payment network which is aiming to work with the banks & other institutions that restrict access to fees, charges for currency exchanges and processing delays. Ripple willing to helping banks to have a faster and cheaper way.
Most of the tokens are held by a few persons and private institutions. So It is a Centralized coin.
How Does Ripple Work?
Ripple Network works by being a bridge between currencies. So the main idea is the transaction amount is transferred to the equivalent amount of XRP and when it will reach the second gateway banks it will be retransferred to the original currency, instead of making a swift transaction. By this method it helping the financial institution to send or receive money in a faster and cheaper way.
For Example, One bank needs to trade INR with USD, instead of making a swift txn mean direct INR to USD, Which is taking several days like 5-7 days. The Indian bank would trade INR with XRP and then XRP to USD. Now you think There is an extra step how this cheap and faster right?
Even its add an extra step, Each step takes around 5 seconds to complete and incurs a fraction of the cost. Now The trade completed within 10 secs (compared to the current system of 5 days) and for less than a 0.1% fee.
Any type of currency can be exchanged including USD, euros, RMB, yen, gold, airline miles, rupees and other low liquid currencies in this way.
