XRP (Ripple) is a project whose worth is 43 billion dollars in respect to its market capitalization. Before we proceed further and discuss how safe the XRP payments are, we have to understand why it is required. Let us have a look at some of the XRP news.
There are many banks that are using infrastructure that were constructed 40 years back for this operation including Swift, Western Union, Money Gram. These are a few examples of expensive, slow, and relatively limited systems that are used for the transfer of money. In this article, we are going to see are the XRP payments a safe gateway compared to the traditional banking systems.
What Is XRP?
Ripple provides two types of currencies that include XRPs and IOUs. IOUs imply the tokens that can be kept on any Ripple wallet. The other one is XRP which is the real digital currency. It is a crypto that is used on the Ripple network for the purpose of transferring money among varied currencies.
XRP is used by the Ripple labs. This digital currency uses the Ripple network to make XRP payments. Now for instance, if a bank wants to transfer a huge amount of money, they are required to use a lot of banks to complete the process. But with XRP’s help, the money can easily be converted and sent to the required bank. It is an asset and is not a liability. The advantage of XRP payment is that it is scalable and fast. Making any transactions in XRP takes just 4 seconds, while other cryptos like the Bitcoin require 10 minutes approximately.
XRP Payments: Relation Between XRP And Ripple
XRP is a product that is used for exchanging currencies. The currency was created by the Ripple labs. This company emphasizes on serving the banking industry by enabling it to carry out the international transfer of time in just a few seconds. XRP payments are considered ideal for cross border money transfers. This entity aims to help the payment providers and banks throughout the globe instantly at cheap rates. Unlike other digital currencies that aim at individual users, Ripple Lab focuses on payment providers and banks.
The concept of Ripple was imagined in the mind of Ryan Fugger in 2004. Just the way the internet carries its protocol to transfer the data as HTTP; similarly, RippleNet utilizes a protocol known as the RTXP for moving value across the globe. RippleNet is the network behind the present XRP payments. It is a decentralized structure and is based on blockchain technology. To date, most cross border transfers use Swift, which is availed by banks for money transfers. Swift takes care of an estimated 6 trillion dollars of currency transfer every day. In 2018 alone, Swift made half of all the high value transactions.
How Effective Are The XRP Payments In The Ripple Network?
Speed is a crucial factor in the present world. When you wish to send money from one nation to another, at times it requires days to be completed. It is generally very expensive. This latest technology aims to develop four dimensions, which include an Interledger protocol, messaging system, the stability of transfers, and currency exchange rate. Ripple net also has a characteristic that is known as ODL (on-demand liquidity). The two basic reasons why people are using on-demand liquidity are low cost and speed. So this makes XRP payments a more convenient option than relying on a traditional banking system. At the time of writing this, the XRP price is $0.7564.
Is Ripple Investment Safe For Making XRP Payments?
So the Securities and Exchange Commission (SEC), which is an agency that is based in the US, debates that XRP is a security and is not a currency. SEC says that XRP sales were not varied from a company selling a bond or stock and that is illegal as they were not registered with the commissions. The basic variation between commodities and securities can be found out by using the “Howey Test”. This test allows us to figure it out by asking questions related to whether an investment includes money.
Conclusion: XRP In 2022
Over the last few years, Ripple has developed to be a high-performing network of money transfers that enables transactions to be cheaper and faster. It has arrived a long way to attain where it is presently. But what the digital currency has in the pocket for 2022 is quite a puzzle. With the SEC vs Ripple case anticipated to come to an end this year, experts expect that the price of XRP will dramatically increase if the result is in the favor of the company.
Along with that, general price predictions indicate that XRP will attain US$1.62 in this year, which would imply a doubling of its value in comparison to now. The XRP chart further implies that Ripple could even attain US$2 if everything is set. But having said that, the ease of XRP payments cannot be denied, especially in the present day scenario where after globalization, cross border payments are a regular thing now.