Behind the digital asset of XRP is RippleNet. RippleNet is a decentralized financial ecosystem with several digital payments and financial service providers using Ripple’s distributed ledger technology (DLT). XRP is the native coin of the network and is used by providers or enterprises who are part of the ecosystem.
RippleNet enables quick, real-time and low-cost convenient cross-border transactions. This makes it a very good alternative to SWIFT, the current international payments system that most banks use. There are several advantages Ripple offers for international transactions that make it much more efficient than the current SWIFT model.
- The average transaction processes in five seconds meaning it is extremely quick.
- The transaction fee is only 0.00001 XRP, which was much less than a fraction of a cent, even at the token's all-time high in price.
- XRP can be used as a bridge currency. This gives financial institutions a cheaper way to trade currencies. They can hold XRP instead of various types of fiat money.
- XRP uses a consensus protocol to verify transactions. Validators compare proposed transactions to the most recent version of the XRP ledger and accept legitimate transactions. For a transaction to be verified, the majority of the validators must accept it.
RippleNet was initially broken down into three different offerings:
- xCurrent - a bank-focused payment system.
- xRapid – a liquidity provider through XRP.
- xVia – an API allowing customers to connect and combine the previous two services.
However in late 2019, Ripple unified the three different products under the same umbrella to expand the usage of XRP.
Overall when comparing RippleNet to the SWIFT banking system, it becomes evident that RippleNet and its associated digital asset XRP offer significant advantages. In terms of functionality and performance, RippleNet surpasses SWIFT. However, when comparing RippleNet to other digital assets like Bitcoin, the evaluation becomes more complex.
RippleNet and XRP do possess superior qualities for their intended purpose. They provide efficient cross-border transactions and offer impressive utility features. Nonetheless, due to the big current centralized nature of XRP's ecosystem, for me it goes against the core principles of blockchain and cryptocurrencies. This divergence from decentralization is a critical factor that prevents me from giving this technology rating 5*.
The original vision behind blockchain and crypto was to disrupt and move away from centralized systems. While RippleNet and XRP demonstrate remarkable utility, the extent of its centralization raises concerns for me, therefore it becomes difficult to confidently say in my opinion that this system is superior to others. Show Less
