There are some differences in the world of cryptocurrencies between one and the other. This also happens with Blockchain. For example, Bitcoin was born with the purpose of allowing financial transactions without the need to go to a third party such as a bank. On the other hand, Ripple literally sells its services to banks and financial institutions.
Thus, the purposes of XRP and Bitcoin could not be more separate. Bitcoin was created in the hope of creating a completely new financial system. Ripple, by creating its digital token to support asset transfer, seeks to assist existing financial systems and enhance their capabilities for global transactions.
A little more about Ripple
Developed by United States-based technology company Ripple Blockchain Labs Inc. in 2012, Ripple Blockchain is a real-time gross settlement (RTGS) system, currency exchange, and remittance network.
The most distinctive feature of Ripple Blockchain is in its construction schemes. This system is mounted on an open source distributed protocol. That is, it supports tokens representing fiat currency, cryptocurrencies, commodities, and other units of value, such as frequent flyer miles and mobile minutes.
Additionally, this system is intended to enable secure, instant and almost free global financial transactions of any size, with no transaction fees. Therefore, XRP acts both as a cryptocurrency and as a digital payment network for financial transactions.
How does Ripple Blockchain work?
Ripple Blockchain uses a common ledger that is managed by a network of independent validation servers that constantly compare transaction logs.
Rather than using the concept of blockchain mining, the Ripple network uses a unique consensus mechanism distributed across a network of servers to validate transactions. By conducting a survey, the servers or nodes of the network decide by consensus on the validity and authenticity of the transaction.
In other words, it works in a shared public database that incorporates a consensus process for decision-making and server validation to guarantee integrity. In this way, the servers can belong to anyone, from banks to individual users.
Ripple’s infrastructure is designed to make transactions faster and more convenient for banks, making it a more popular cryptocurrency option for larger financial institutions.
Ripple’s Blockchain system, RippleNet, offers companies and financial institutions a series of programs that help cross-border payments. Among them are xCurrent, xRapid and xVia.
First, xCurrent is a payment processing system for banks. For its part, xRapid enables financial institutions to minimize the cost of liquidity while using XRP as a bridge between one fiat currency and another. Finally, xVia allows companies to send payments through RippleNet.
Thus, Ripple is a for-profit technology platform and also a cryptocurrency (XRP), developed by Ripple Labs. Its objective is to guarantee fast and unhindered transactions, so its Blockchain is designed to facilitate the achievement of this objective.