Ripple is unique among the 1,500 or so cryptocurrencies. Decentralization and cryptographic security distinguish this market, in spite of how many criticize Ripple’s development as having a tendency to move towards centralization. Nevertheless, its token is subject to the same volatile profits and losses incurred by the other cryptocurrencies.
Ripple’s history begins prior to its release in 2012, when the company chose a less radical solution than the majority of the crypto world. You see, blockchain technology is used within the RippleNet but overall, the company devalues decentralized technology. Investor interest grew right away because of its innovations for the financial sector and the low fees. Because its tokens are issued instead of mined, over 100 billion of them were easily created. While this was thrilling to investors and users alike, the crypto world is concerned that this platform will lead to oversaturation and inflation.
Developing the blockchain was a direct response to an inadequate system for cryptographic transactions. Four years later, Ripple introduced its product as an alternative to a blockchain based solution. It comes to a consensus by using a system of validating servers. Here is the essence of the centralization problem that lead many to criticize the alternative cryptographic platform.
Ripple secures its validation scheme through a trust system known as a Unique Node List. Critics point out that this makes regulation through a central authority easy. This situation occurred just a year after operations began. The company needed to comply with regulations upon violating U.S. Treasury rules. Privacy issues have also been raised.
It is important to note the XRP token is more similar to stocks than other cryptocurrencies. The Ripple network functions independently of XRP. It is also important to note that the 100 billion token pool is not definitively capped. Because of this, and since it is not mined, XRP is not considered very important to the platform.
Cryptocurrencies regard themselves as being an option to central banking systems. Ripple, on the other hand, markets itself as a solution for them. Ripple is much more friendly to corporations than as a universal peer-to-peer network. Its software claims to improve upon the clunky SWIFT system used by banks throughout the world.
Ripple has always been much faster than the original blockchain. It was recently scaled to match credit card transaction rates per second. While Ripple breaks the mold of a cryptocurrency, many believe it has a future.