XRP is one of the oldest cryptocurrencies. Originally built by David Shwartz, it has been in circulation since 2012. Unlike many cryptocurrencies, XRP has stayed true to its initial goals for a long time, becoming a digital asset built for real time decentralized global payments.
In this article, we’ll go over the use cases for XRP starting with where it comes from and what it’s used for.
What is XRP, Where Does it Come From, and What is it Used For?
Blockchain technology, smart contracts and other similar technological advancements have the ability to dramatically improve our global financial infrastructure. One of the products of these advancements is XRP, the native cryptocurrency to the XRP Ledger (XRPL), an open-source public blockchain built for payments. XRP is the facilitating currency which ensures that global transactions are settled at high speeds and security.
Let’s explore the ways XRP and the XRP Ledger are being used
Integration With Banking Systems & Financial Institutions
The world is wealthier than ever before according to leading consultancy firms, with our global net worth being estimated at around $510 trillion dollars. As global populations rise and connectivity to the digital economy increases the need for faster, safer, and more accessible ways to manage and transfer money around the world is growing. Cryptocurrencies and smart contracts could help address this growing need.
By making the technology available for international and cross-currency payments, XRP enables companies and institutions to expand their global payments networks safely and rapidly. In tackling some of the issues with our current financial systems, XRP and the XRPL could therefore be able to help companies solve real problems faced when conducting business globally.
For instance, financial institutions using the XRPL can offer better transaction and conversion fees without the need for intermediaries, a third party which can often slow down the process.
Transaction & Payment System Basics
Enabling the internet of value
The XRPL offers unique features and functionality when compared to other blockchains. For example, the XRPL uses a Federated Consensus protocol for verifying transactions—unlike bitcoin, which relies on proof-of-work consensus. Together with the off-chain processing ability of XRP, this enables transactions to be settled in under 5 seconds, compared to 15 minutes with Ethereum and 60 minutes with Bitcoin settlements.
International Banking Systems & Beyond
Vast amounts of money are transacted daily in the global financial system. These transactions can be extremely complex, slow, and prone to problems using the current infrastructure. Transaction speed and costs are amongst the problems faced by international banks.
Another important advantage of the XRPL is its inherently green attributes. It is one of the first major carbon-neutral blockchains pursuing carbon neutrality ambitions.
Open-source, Decentralized Blockchain Technology
Democratising access to financial infrastructure
The open-source XRPL allows developers and entrepreneurs to design and launch new use cases on the XRP Ledger.
By making it easier for anyone to become involved in the process of building future financial systems, XRP is helping fuel the new digital economy and fostering financial inclusion globally.
The community-focused utility of XRP is levelling the playing field by giving access to all developers to participate in the design and construction of future financial systems.