Why Every Trader Must Own Bitcoin.Ripple is a popular cryptocurrency with ranked at number three after Bitcoin and Ethereum. The market cap of XPR is $28 billion which is expected to grow as the currency is increasingly adopted by the financial institutions. Today will highlight the reason why Ripple is favorite for the banks and other financial institutions and why bitcoiners hate it.
Why Every Trader Must Own Bitcoin
Ripple is headquartered at San Fransisco. It claims to be the only platform to facilitate real time payments fastly and securely. Besides its core feature, Ripple has three other products with different features.
- xCurrent a payment solution
- xRapid a source of liquidity
- xVia a source to connect business to Ripple
Normally, we don’t find cryptocurrencies offering so many products. Contrary they are strict to their native coin or the function that their blockchain-based platform is offering. Many critics even question the need for creating XPR coin when it has so many products to offer.
Why Banks favor Ripple
Lets start with highlighting the reasons why financial institution like this virtual currency. There are more than 34 financial institutions who are using one of the three above mentioned Ripple products. Standard Chartered Bank and American Express are included in the list. Let us list down the advantages of Ripple which makes it favorite of the Banks:
- Ripple is the fastest platform to settle payments in a matter of four seconds.
- It is also scalable
- Ripple is capable of performing up to 1500 transactions per second.
- The platform supports a large number of users because of the TPS value
- It is cheap and economical to transfer money between banks.
- Ripple provides added security to its users which reduces the chances of conflicts and frauds
Why Bitcoin community hate Ripple?
Now we will explore the other side of the picture. While on the first hand, Ripple is the favorite of the financial institutions, the bitcoin community dislikes it.
Total number of XPR tokens created initially were 100,000,000,000. Ripple owns half of the total number of coins created. We can understand the other half were sold or distributed among different entities. With huge number of XPR coins, Ripple can manipulate the value of its coin.
Please Read: Why every Trader must own BTC: Explains Biran Kelly
However, Ripple has tried to address the problem by offering escrows where the unused currency units are held and are secured through a smart contract. This does not seem to work to unclear the doubts and fears since the units in escrow finally goes in control of Developers.
The other feature of Ripple that is contradicting with the principal of decentralization is its use of validators. The distributed ledger of Ripple uses validators to get approval of any activity. The validators are few which raises concerns about other private participants’ authority in in the system. This is another contradiction of the principle of decentralization.
However, Ripple’s top Cryptographer David Schwarts explained as follows:
“As it happens, much of the network infrastructure is run by us today. But we are more than happy to turn that over to others who are willing to do it”
Another such problem is that the adoption of the platform by more users does not affect the value of the currency. Ripple claims that they designed the platform the same way. However, the community then questions the creation of the coin when the platform can work well without it.