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Pros And Cons Of Ripple (XRP)
By Kapil Rajyaguru
We know how Ripple XRP is different from other cryptocurrencies.
The primary goal of Ripple network is to improve the efficiency of cross-border payments in the financial service industry by providing faster and cheaper settlements.
Since Ripple is different in some ways from other cryptocurrencies, let us review its pros and cons.
Pros of Ripple XRP
1. Speedy Settlement
Ripple confirms transaction in 3 to 5 seconds, compared to 10 minutes to hours taken by Bitcoin or days taken by banks to complete wire transfer.
2. Very Low Fees
The cost of completing a transaction on Ripple network is only $0.00001 XRP, a small fraction of penny at current price.
The average transaction fee on both Bitcoin and Ethereum has often reached two digits, with all time high going above $50.
Banks wire transfer can cost anywhere between $15 to $30 and more.
3. Adoption By Large Financial Institutions
Induslnd Bank, Santander and Bank of America are among few using this network, signifying it has larger institutional market adoption than most cryptocurrencies.
Cons of Ripple XRP
1. Centralized Infrastructure, Governance, Issuance
Unlike other decentralized cryptocurrencies, the Ripple system is somewhat centralized.
2. Large Pre-Mined XRP Supply
Most of the Ripple supply not held in circulation is locked in escrow; its possible large chunk of tokens may get introduced, which could impact the value of XRP.
3. SEC Against XRP
In December 2020, the U.S. Securities and Exchange Commission filed a lawsuit against Ripple, saying that since it can choose when to release XRP, the company should have registered it as a security.
The company has denied the allegation.
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