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Ripple and XRP: The complete Ripple and XRP guide and everything you should know

Ripple has been highly prominent in the cryptocurrency space, for both positive and negative reasons. Ripple is a payment protocol that enables fast, frictionless cross-border payments with low fees. This technology is based on a network of servers that constantly communicate while maintaining a distributed ledger with the most recent balances and transactions.

The payment protocol hosts its native asset, XRP, which serves as the primary medium for transferring value across the network. XRP, which was rebranded in late 2018, was previously known as Ripple. RippleNet is Ripple’s most recent payment protocol iteration. In late 2019, Ripple, Inc. combined all of its products into a single network that could be used to transfer value in a variety of ways. RippleNet allows for the use and transfer of XRP, but it also allows

for the generation of value and liquidity without the use of the XRP asset. RippleNet operates

by potentially hosting multiple potentially valuable assets.

The network includes an On-Demand Liquidity mechanism, which could enable value transfers and exchanges all over the world. By 2020, RippleNet will have collaborated with over 200 banks in various stages of exploration, and On-Demand Liquidity will have hosted around 15 companies, with more members on board. The network accepts payments in any fiat currency as well as cryptocurrencies such as Bitcoin (BTC). This set of features is not possible for Bitcoin and is only marginally viable for Ethereum. Bitcoin has remained committed to its first-layer solution, employing the BTC asset as a means of payment. Ripple and Bitcoin have been competing in recent years.

Ripple's protocols promised to displace Bitcoin's older, less technologically advanced network.  However, the most significant challenge to Bitcoin was that Ripple eliminated mining and used

a lighter form of encryption to avoid DDOS attacks, while also carrying virtually unlimited transactions. Bitcoin's security is provided by transaction fees, but on some days, even the Bitcoin network is overwhelmed with transactions. Bitcoin processes 300,000 to 700,000 transactions per day, or 7-15 transactions per second. The Ripple protocol, on the other hand, is designed to handle up to 1,500 transactions per second. However, the exact number of XRP daily transactions is not as clear.

Mostly, Bitcoin has relied on volunteer miners and node operators. The connections between them are made possible by the general Internet infrastructure, except for a few exceptional nodes that are easier to contact. The Bitcoin network has over 10,300 nodes communicating globally, and it takes minutes for all nodes to update to the most recent state of the ledger and confirm transactions. Ripple, on the other hand, has a list of validators with known locations and even names. The validators communicate every 4 seconds, which updates the ledger and achieves transaction consensus. The Ripple network's native token is XRP.

The Ripple protocol was developed in 2004 to revolutionize interbank transactions. However, XRP appeared later, around 2013, when Ripple Labs began its operations and Jed McCaleb joined the team as its leader, later bringing in new investors. The XRP asset was then envisioned as having multiple network use cases. The immediate use case for XRP is to serve as a transaction vehicle by representing any type of asset. Using XRP also necessitates the payment of network fees, with each transaction erasing US$0.00001 from the ledger. This helps to avoid spam transactions if transfers are completely free.

XRP was designed with a total supply of 100 billion indivisible units, unlike Bitcoin. Millions of those billions of units were distributed through various stages of airdrops, preliminary sales, and private placements. XRP has been distributed for testing to a variety of owners, including banks. However, Ripple, Inc. is the largest XRP holder, holding 55 billion units to gradually release them on the open market. This process, on the other hand, could take more than a decade to complete.

XRP has linked Ripple, Inc. to several partners, including Jed McCaleb and R3, a major early partner who negotiated a large XRP haul when the asset was trading for less than a penny. Ripple has issued several challenges to Bitcoin's dominant position. The project was already years ahead of Bitcoin in terms of protocol development. However, Ripple did not consider linking itself to the world of digital assets, at least not until Bitcoin had established its success. Ripple entered the cryptocurrency world thanks to Jed McCaleb's involvement. The competition between Ripple and Bitcoin heated up after that. At this point, the narrative of Ripple and its protocol making Bitcoin obsolete' began to emerge and be repeated.

However, Ripple's asset was still trading for pennies, whereas Bitcoin had already broken into the four-digit range. Bitcoin was experiencing its growth spurts at the time, with mining challenges attracting larger business interests. The Mt. Gox scandal also tarnished Bitcoin's reputation, highlighting some of the significant risks involved in the new world of cryptocurrency. However, as time passed, the growing trading ecosystem elevated Ripple's reputation to rival that of Bitcoin. While the Bitcoin community grew slowly, with significant skepticism and setbacks, Ripple strategically positioned itself, building a strong community and a new narrative.