What Actually is Ripple (XRP)? What Does Ripple Actually Do?

In order to improve financial transactions between banks by making them faster, cheaper and more reliable, Ripple has already managed to attract large financial institutions to its network, including Santander, BBVA and RBC. Ripple took another major step in expanding into Asia by announcing plans for a new office in Singapore, today’s Asian FinTech Innovation Center. With an experienced leadership team and the ever-growing Ripple network, the company’s prospects look promising.
Although Ripple offers a destructive solution to the real problem, a large group of individual investors in the block industry are angry with the company. The main problem that the blockchain community seems to have with Ripple is the fact that it is completely centralized and that they aim to increase the effectiveness of the global financial system. This is at odds with the beliefs of the stubborn block community, which wants to bypass this (in their opinion) unreliable and irresponsible industry using cryptoLooks and Blocks.
Ripple’s only goal is to make transactions between financial institutions more efficient and has repeatedly stated that they are not interested in facilitating transactions between individuals.
What does Ripple actually do?
At present, our global banking system is experiencing a lot of disappointments in international financial transactions. We, as bank customers, experience this when transferring funds to other countries, as this may take 3 to 5 days. Taking a plane with a bag of money is still faster than most international transactions.
However, we are only experiencing some of the problems with these transactions. Most of these problems are faced by banks. Since financial transactions tend to pass through multiple intermediaries there is a high failure rate, the process is costly and slow and there is no coherent global network or structure for these transactions. Ripple strives to make this process incredibly effective by using the blockchain technology and its own XRP crypto Light.
Ripple’s block is currently one of the fastest in the crypto-space, with a transaction speed of only 4 seconds. To illustrate how quickly this is actually, Etrier block transactions take more than 2 minutes, and Bitcoin sometimes takes more than an hour to confirm a transaction.
Adding to the fact that both are facing scalability issues, Ripple is definitely the most effective transaction crypt of the three. In addition, Ripple is scalable if the number of transactions increases too fast. Currently, it can handle 1500 transactions per second.
XRP, Ripple’s crypto, acts as a digital asset to facilitate international transactions.
That’s how it works. Bank A wants to send Bank B $ 1,000,000. Instead of sending the money using the standard method, Bank A will buy an XRP amount that costs $ 1,000,000 and will send it to the bank’s institutional portfolios B. Bank B will convert it into the fiat currency in which it operates and the transaction is settled within minutes. Banks will not have to buy and sell XRP on an exchange but will have private access to Ripple’s Transaction Network.


Unique Price Determinants of XRP
In addition to the huge increase in Ripple transactions, the cost of these transactions is extremely low and will be paid in XRP. This is done by destroying a very small percentage of the sent and received XRPs.
This means that cryptoLight is subject to deflation, as the total amount of coins is smaller and each deal is made. Therefore, the price will increase with each transaction, although it will be hardly noticeable in the short run. However, when you think long-term, this is something to be taken into consideration.
However, there is one major problem with the amount of XRP in circulation and its cost. The amount currently in circulation is only 38% of the total number of all XRP coins. At present, Ripple still owns 62% of its XRP, which is one of the main concerns of individual investors.
Banks require a stable price to be able to properly conduct financial transactions, and it is assumed that this is the reason why Ripple does so. However, the real reason for this is still not officially given.

Competition
Trying to facilitate global financial transactions, Ripple faces a giant called SWIFT. If you have ever made a transaction from your bank to a bank abroad, it is likely that SWIFT has been used by banks to facilitate the transaction process.
At present, over 11,000 financial institutions in some 200 countries and territories are linked through SWIFT to complete banking transactions. SWIFT encourages banks to join their network to increase the ease of transactions, which sounds very similar to what Ripple is doing right now. VISA and Deloitte are also looking for ways to acquire a market share from SWIFT.
All three companies have announced investment in research and development aimed at blockchain technology to increase transaction efficiency and gain a competitive advantage in this industry. In this regard, Ripple seems to have a lead, as their block is already being used and is gaining momentum.

The Ripple Team and Network
While examining Ripple’s management team, it’s hard not to be impressed by our long-standing experience in a number of industries targeting mainly FinTech and the financial sector.
Executive Summary Executive Director Brad Garlinghouse is a good presentation of this. He worked at Yahoo as Communications SVP, who served several positions on board and was CEO of Hightail. Interestingly, the global strategic account manager, Marcus Treacher, was on board SWIFT, the market leader in the industry where Ripple is trying to penetrate.
Besides an experienced leader, Ripple currently has over 160 employees, making it one of the largest blockchain employers. Looking at Ripple’s growth and the combined experience of his senior management, the team looks solid.
A number of large financial institutions are already members of the Ripple Network and the size of the network continues to grow on a regular basis. Well-known banks such as Santander, Reisebank and RBC are examples of these large members of the network.
Besides the network, Ripple has some reputable investors looking for their future. Google’s venture capital investment group supports Ripple financially, like Accenture, Andreessen Horowitz and Seagate. With such support, you can say that this is a serious business.
For a full review of Ripple Network members, see https://ripple.com/solutions/
Reviews of Ripple
Blockchain investors have quite opposite views on Ripple. It either seems like you love him or you hate him. Why people love it is quite simple: it offers a proven solution for a real and global problem. However, hatred for Ripple and his operations also has some content.
The first argument against Ripple is that the company still owns 62% of all the coins it has created. The real reason for this is still unclear, but puts Ripple in a position where they can easily manipulate the price to their liking. Another problem with Ripple is that it is centralized. This arouses many block enthusiasts, as a block is a way of decentralizing the world by preventing any country from controlling all data and accounts.
However, it makes sense for cryptographic data facilitating inter-bank transactions to be centralized, as banks need to have control and accessibility to the history of all transactions. This opposes the anonymity and ownership of your own information, which is a key feature that is part of the popular share of encrypted financial transactions.
Finally, the most common argument against Ripple is that they cooperate with the “enemies” of the bloc’s ideology: governments and financial systems. Using block technology to the exact opposite of what BitCoin means (that is, no central power stations and more control and privacy) has created a serious dislike for Ripple, no matter how useful their technology is.
Investing or not investing?
Generally, Ripple and their XRP crypto-wave are subject to many arguments in favour and against. However, their target market and technologies are solid.
Betting on banks never seems like a good idea, but heavy competition can be expected. Why do banks use the crypt of an outside company when they can create their own block inside? Visa simply can not be ignored when it comes to financial transactions between banks and it is unlikely that they will not come up with a counter-strategy.
However, Ripple’s network is impressive and expanding. The highly qualified leadership gives confidence for a strong vision and strategy. Price manipulation can happen and there are many committed Ripple officers but who need individual investors when you have the support of big players in the financial system.