Advantages and Disadvantages
If you have not heard of ripple currencies, then what in the world are you talking about? ripple is actually a new currency trading model which uses the ripple protocol to trade the XCP or ripple monetary unit. ripple is a novel real time gross settlement system, digital currency exchange and electronic remittance network developed by ripple labs Inc., a private US-based technological business. ripple allows the two users to negotiate the settlement prices without involving any middlemen, thus increasing the efficiency and reducing the cost.
The key feature of ripple is that it creates a trust relationship between the two users which is not possible in other cryptosystems. You might have heard about how in the traditional cryptosystem, when two users make a transaction, they have to share a certain amount of information together, like their bank account number and the private key. ripple allows two users to transact without sharing any information, which is quite different. With this unique feature, the ripple cryptocurrency token ensures a level of privacy and anonymity. This feature is one of the reasons for its recent popularity. In fact, its recent upgrade, namely the XC Protocol was received warmly by all people including bankers, government officials, and financial institutions.
However, ripple does have some other important features as well which make it the most interesting and promising kind of contemporary currency system. One of the features is known as the ripple protocol, which allows the two users to negotiate without revealing any secret information about the wallet or the private keys, hence the trust relationship is enhanced. This gives the pair of users the ability to transact in the market directly, without worrying about the hidden costs and risks.
Another important characteristic of ripple is that it works on a decentralized manner, where the market price is not affected by the actions of any single entity. This is in contrast to the traditional cryptosystems, which act like a bridge between two parties where the one who acts as a mediator will determine the market rate. Therefore, the two users have full control over their transactions.
The ripple marketplace, however, is different from other comparable platforms such as Forex and the dollar. Unlike other currencies, the ripple Labs tokens are not backed by any physical asset such as gold, silver, or platinum. Instead, this virtual currency is based entirely on the efforts and the hard work of the software creators who created it.
The developers have ensured that the private keys used for the transfer of these coins are kept secret and are kept under wraps. Thus, the system works in a transparent fashion. While this is quite commendable, it also has its disadvantages. First of all, in order to make transactions secure, the whole system needs to be operational. Therefore, if you want to use ripple Cryptosystems on a global scale, you need to pre-determine your trading timeframe and make sure you have enough time available.
The other drawback of the system is that unlike other similar projects, the private keys are not distributed automatically to the relevant users. This means that certain information that belongs to you and has been encrypted will not be accessible to other individuals even with your permission. Also, while your private keys are kept secret, they cannot be copied or destroyed unlike the public keys. This means that your private information is more secure, but at the same time, you have to be extra careful with the security of your private keys.
One good thing about the ripple Cryptosystem is that it allows users to interact with each other in a completely private manner. As such, you can engage in discussions and share views about anything you want. Moreover, you can easily convert the ripple Cryptosystems from one currency to another. All these features have made ripple a preferred option for many traders. If you are looking for a new way to make transactions on the Internet, then look no further than ripple.