XRP is a cryptocurrency developed on the XRP Ledger, an open-source blockchain, being a digital coin that is used for numerous purposes. For example, it can enhance global financial transfers and be utilized to store value if you want to profit from price fluctuations. XRP has had a great evolution, as it has become an important cryptocurrency in the crypto space because it facilitates trustless transactions and offers fast cross-border payments. Luckily, if we consider the XRP price prediction, the value of this cryptocurrency will increase even more, which is the desired scenario for any digital coin.
In this article, we will explore the lesser known facts about XRP, so keep reading to learn more.
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Ripple is Not the Official Name of the Cryptocurrency
Even though XRP is often addressed as Ripple, Ripple is not the name of the cryptocurrency itself. Ripple Labs is the company behind the creation of the XRP coin, and over the years, people have also used the name for the digital coin because it is easier to remember. Thus, because Ripple is a catchier name, people have started to use the term Ripple to refer to the cryptocurrency.
Ripple is a software company that created the Ripple Consensus Ledger, which functions on a distributed ledger technology offering various payment solutions products. XRP is the native token of the RCL, which is why confusion has been made between the two terms. XRP has a limited supply of 100 billion digital coins that have already been mined. The main reason why people use XRP is that it is viewed as a bridging currency that could replace USD when converting money. So, XRP wanted to offer a better alternative to the traditional model, as it can eliminate fees and make the processing times much faster.
XRP can’t be Mined
XRP is a cryptocurrency that can’t be mined because the owners have only created 100 billion digital coins, the maximum number of tokens that will be in circulation.
The company’s management can release up to one billion tokens a month, and when it does, people will find out from public announcements. Although not all XRP coins are in circulation, they have been mined and will be released gradually to the public.
Not All XRP are in Circulation
Although the maximum supply of XRP has already been mined, not all digital coins are in circulation yet. Ripple Labs has locked up 55 billion XRP in escrow to maintain the digital coin’s value. Then, 1 billion of the XRP is released gradually each month. Usually, the XRP coins are sold to the marketers and institutional investors, and the unsold digital coins are returned to the escrow. This is why it takes longer than 55 months to circulate the entire supply. Additionally, Ripple Labs has declared that they use less than a third of the 1 billion XRP they first announced they would release monthly. This is why we might need to wait longer until the entire supply is hit, which can happen around 2035 or even later.
The Initial Purpose of XRP wasn’t to Serve as a Payment Currency
People often believe that all cryptocurrencies have been made to be payment currencies, but digital coins have many more use cases and applications. If not, what would be the point of having more than a digital currency?
So, XRP hasn’t been used to serve as a payment cryptocurrency, which is why you will not see many XRP tokens being used to buy a service or a product. Instead, XRP is more of a cryptocurrency used as a payment transfer that helps people move their money more efficiently by offering cheaper and faster alternatives.
XRP is Very Fast
Cryptocurrencies are known to offer faster money transfer over fiat money, but that time differs from one digital coin to another. For example, for Bitcoin, the largest digital coin by market cap, payments take from 10 to 30 minutes to be processed, while for Ethereum, things are a little bit faster, as it takes around two minutes or more, depending on the network congestion. However, XRP is much faster, and money can be transferred almost instantly, as according to Ripple Labs, it takes around four seconds. XRP’s blockchain can also handle more transaction volumes than other cryptocurrencies, including Ethereum and Bitcoin, which can only handle 3 to 15 transactions per second.
This is not the case with XRP, which can handle about 1,500 transactions per second, and the company suggests that the platform could also be scaled to have around 50,000 transactions per second.
XRP has Low Transaction Costs
One of the most popular downsides of crypto payments is the high transaction costs, especially for mined cryptocurrencies, that need to pay miners for their effort in generating new blocks to the network. Bitcoin is known for having high transaction fees, which increased to around $20 in 2017 and 2018. Ethereum has lower transaction fees but higher than XRP.
The average transaction fee for XRP is less than a penny, and its maximum value was $0.03 when the crypto landscape boomed in 2018.
Conclusion
XRP is one of the most important cryptocurrencies out there and has captured people’s attention. XRP has been designed to be a cryptocurrency that functions through a centralized payment system, which has the great advantage of carrying out transactions efficiently and at a lower cost than the traditional options. People are less aware of many surprising facts about XRP, and we have presented a few of them in this guide. Did you know some of these facts, like that Ripple is not the original name of the digital coin? Or the fact that the total supply of XRP is not in circulation yet?
