The XRP token was launched in 2012 by Ripple LabsThe objective of this project was for this asset to become a prominent player in the field of digital coins and blockchain technology in the framework of transoceanic payments.
The idea behind Ripple's payment system was conceived in 2004 and initially by Ryan fugger, a Canadian developer and entrepreneur who is known for being one of the project's pioneers. But it was with the intervention of Jed McCaleb and Chris Larson that this took shape and this blockchain gave rise to its native token XRP.
At birth, Ripple Labs received 80 billion of the initial supply of XRP and 20.000 million remaining were assigned to the co-founders. In other words, the total amount of XRP tokens was 100 billion units, designed to offer faster and more efficient currency conversions and with a particular focus on the banking sector.
Unlike cryptocurrencies like Bitcoin, XRP does not use a complex mining process. Instead, it runs on Ripple's own payment network and uses a consensus mechanism only known as proof of work or PoW What happens is that every time a transaction is made, even though these are fast and secure, a small fraction is destroyed, slowly reducing the amount of this cryptocurrency on the market.
Even so, it has managed to position itself as the preferred option for most financial institutions seeking reliable solutions for fast, cross-border payments on the blockchain. Some experts and enthusiasts indicate that as more people use the Ripple network, the coins will gradually run out or the XRP price will increase.
But why is it impossible to mine XRP?
La cryptocurrency mining or crypto mining involves the use of computer equipment to perform complex and rapid mathematical calculations that validate transactions and allow for the expansion of the blockchain. In other words, it's a record that groups together all completed transactions.
As for Ripple, Their operation in this sense is very different. That's why it's said to be one of the few cryptocurrencies that can't be "mined" in the traditional sense. At the time of its launch, were created, as already said, 100.000 billion tokens XRP, thus establishing a maximum limit of currency units in circulation. Ripple, which was born with the name of the OPENCOM, still holds around 55% of this total supply of these digital assets.
Furthermore, the entity responsible for Ripple (Ripple Labs Inc., a technology company based in San Francisco, United States) has the ability to release up to 1 billion XRP tokens monthly, although they rarely use this maximum limit. Whenever they decide to release new tokens, they do so through public announcements.
So how do Ripple and XRP work?
Ripple It works to allow transactions between banks to be carried out quickly and with very low commissions. compared to other types of transactions. It also facilitates transfers between companies and between people, known as P2P commerce.
Due to its very nature and the way it was conceived, Ripple, more than a blockchain, It is a digital payment network that uses a technology called XRP Ledger It's similar to a blockchain, but has key differences. The most important is the use of a consensus mechanism instead of mining to validate transactions. Its technology uses a distributed ledger, which operates on a unique consensus protocol. This system allows you to validate and record transactions quickly and efficiently, without the need for mining as in other cryptocurrencies.
This is because Ripple focuses primarily on facilitating international transfers Fast and economical, using traditional banking systems. However, transactions made with their platform are completed in just a few seconds.
This is a noticeably shorter time compared to the minutes it takes Ethereum, Solana or Cardano, the hours that Bitcoin can take and the days that transactions between banks require in fiat currencies or fiat money like the dollar or the euro.
Another advantage of using XRP in transoceanic operations is the average cost of a transaction. When doing it with Ripple, this system uses a standard rate which is 0.00001 XRP, which is less than half a cent. This makes it one of the cheapest cryptocurrencies for traditional transfers and thousands of times cheaper than conventional banking methods.
If it's not mined, is Ripple a cryptocurrency?
Although Ripple does not follow the usual rules of the cryptocurrency ecosystem in terms of its operation, Yes, it is considered a cryptocurrency because it uses cryptographic technology.This digital asset is arousing great interest due to its potential to modernize the international banking system, which, for a globalized world like today's, could be considered obsolete.
Moreover, This cryptocurrency has the particularity that its value increases with its use. and, from this point of view, proposes a new vision of financeAnother thing to keep in mind is that this digital asset was created with the goal of facilitating more agile transactions between banks, businesses, institutions, and individuals.
Hence, Ripple is always looking to establish multiple strategic alliances to expand its network. While it is not possible to mine Ripple in the traditional cryptocurrency sense, There is the option to obtain it by exchanging it with other mined currencies.
This is called indirect mining and has centralized character. It also does not allow anonymity. These are two factors that can lead to some blockchain technology purists and decentralized finance (DeFi) to avoid this currency and not consider it a cryptocurrency as such.
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If we cross the sidewalk and stand next to banks and other financial institutions, the centralization and control associated with Ripple represents a level of security that is difficult to achieve with other cryptocurrencies.. If we add to this its impressive speed and low-cost transactions, it is especially attractive to these organizations. In this sense, Ripple can be considered as an innovative cryptocurrency and forward-thinking thanks to its revolutionary approach that combines the benefits of DeFi with conventional systems.
