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What is Ripple and how is it distributed?

What is Ripple and how is it distributed?

Nowadays, cryptocurrencies are considered to be an asset for diversifying investment portfolios. Although in recent years traders were only focused on Bitcoin, today there are several options of virtual currencies that meet different profiles of people who want to invest in this crypto-world.

You should already know that each cryptocurrency has some element which differs it from the others, right? They all have particularities and a history of their own, as well as rules and procedures that show how they work. And that is where Ripple comes in!

Interested in learning more about Ripple? In this blog post we will discuss:

  1.     What is Ripple?
  2.     What are the characteristics of Ripple?
  3.     How is Ripple distributed?
  4. How are Ripple transactions validated?

1. What is Ripple?



Ripple is a payment protocol that gained prominence in the cryptocurrency market in 2012.

Its big proposal was to use Blockchain technology to replace the payment processing technology that banks currently use which, in some cases, is already obsolete. What spiked interest in the Ripple project is that it could accomplish this for free. In addition, it should be noted that it is cryptocurrency compatible, along with several other forms of money: gold, miles, physical currencies, etc.

For you to have a clearer idea of ​​what Ripple really is, the term ‘protocol’ means that it is a tool that allows payments to be processed. In the case of Ripple, they are performed quickly and safely, two very important factors for the financial market.

XRP — Ripple’s own cryptocurrency

It is vital to note that the protocol has its own cryptocurrency that bears the name of XRP, which is considered to be one of the most relevant in the market. Moreover, Ripple was created to provide more competitiveness to traditional banks and to enhance the opportunity to match cryptocurrencies in terms of innovation.


2. What are the characteristics of Ripple?

So what sets Ripple apart from all the others within the crypto-sphere?

It is similar to Bitcoin

An important feature of Ripple is that its protocol is very similar to that of Bitcoin. In other words, XRP is a digital currency, which is based on mathematical formulas for carrying out its calculation and the mining process.

Its transactions are carried out using the peer-to-peer (P2P) model, in which 2 users carry out the transaction with each other, without the need for an intermediary.

Has a limited number of units

There are a limited number of units, about 100 billion. In addition, it is important to know that only a part of them were released for transactions, the rest is under the care of the company that created the protocol. We’ll talk more about that later.

It is destroyed with every transaction

Another interesting feature is that a small part of XRP is destroyed with each transaction carried out. It is estimated that more than 7 million XRPs have already been destroyed, something that can help to increase its market value constantly by making it more scarce.


3. How is Ripple distributed?

At the time that XRP was created, 20% of its units remained with its creators. The rest was donated to charities with the help of Ripple Labs, an institution created for this sole purpose. In 2017, Ripple’s distribution won a smart contract that allowed Ripple Labs to use just 1 billion XRPs monthly. Currently, it is estimated that there are more than 40 billion of these cryptocurrencies in circulation on the market.


4. How are Ripple transactions validated?

Let’s start by talking a little about how your algorithm works, which represents your consensus process.

One of the elements of this process is that the algorithm is applied to all nodes of the network instantly, guaranteeing an agreement of the entire network in a few seconds. Therefore, when the consensus is reached, the Ledger, which is the record of a transaction, changes its status to “closed”, which shows the current status of the network, validating this entire consensus process.

The organization of the validation by the network is very interesting, as there are several servers that organize which transactions have not been validated yet. This allows for the creation of a list so that there is a vote on which of them will be prioritized in this validation queue. Thus, transactions are processed more quickly when compared to other cryptocurrency networks.

Now that you know what Ripple is, what do you think about delving deeper into this world? We suggest that you continue to study on the topic or even start investing in cryptocurrency to understand how it works in practice.

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