Contrary to popular belief that XRP positions itself as a competitor with Bitcoin, it rather positions itself as a complement. The Bitcoin website has created a separate page for only Ripple, for bitcoiners. As a distributed network, Ripples' transactions happen immediately across the network. Since these transactions are usually from peer to peer, the network is elastic to system risk. Unlike Bitcoin and its peer coins, Ripples are not mined. However, each transaction ends up destroying a meager amount of XRP, which leads to the addition of a deflationary measure into the system.
Currently, there are 100 billion XRP (Ripples) in circulation.
Cryptocurrency is another word for a math-based currency, and it describes a digital asset that has mathematical properties that are verifiable. Such verification is similar to how gold can be reliably verified as a substance made up of atoms with 79 protons. Cryptocurrencies or math-based currencies occur as digital assets in their right. Hence, they can be transferred similarly to flat cash between users without reliance on a centralized protocol operator. In this case, Ripple Protocol is the centralized protocol on which XRP runs as a math-based currency.
The main role of XRP is to keep the XRP protocol safe against denial-of-service (DoS) spam attacks. With Ripple Protocol being based on a shared ledger of accounts, it is possible for a malicious attacker to attempt to overload the protocol. This he could do by trying to create enormous amounts of \"ledger spam\" (e.g., unreal accounts) and \"transaction spam\" (e.g., unreal transactions). This could lead to the size of the ledger becoming difficult to manage, hence interfering with the ability of the protocol to clear legitimate transactions as completed swiftly.
As a bridge currency, the value of the XRP is great. This is because each gateway balances trade as clearly different assets within Ripple. Hence, the number of possible currency pairings can become significantly high. XRP offers an option to quoting every feasible currency or gateway arrangement, by acting as an important bridge currency to enable these transfers. The possibility of this is real, because every currency is liquid to every other currency, once every currency is liquid to XRP.
The Ripple Protocol is a mutual public database which entails a ledger, which is utilized for accounts tracking and their balances. As a distributed database, the ledger is a perfect, shared record of accounts, balances, and transactions occurring in the Ripple Protocol. The ledger is updated automatically and constantly by the Ripple Transaction Protocol (RTXP), such that an identical ledger can be found on numerous servers around the globe. This means, at any particular time, anyone can review the ledger and access the record of all activities on the Ripple Protocol. In the event of changes being made to the ledger, all computers connected to the Ripple Protocol will mutually agree to such changes through a process termed Consensus.
The consensus is reached on the Ripple Protocol worldwide, within seconds after making a change. The consensus finding process is the engineering breakthrough that enables fast, secure and decentralized settlement of transactions seen on the Ripple Protocol.
The Ripple Protocol is not controlled by any individual or any organization. It runs on computers globally, with all working in harmony to constantly maintain a flawless, shared record of accounts, transactions, and balances. However, distributed networks offer many efficiencies, compared to centralized networks.
Due to the \"self-clearing\" ability of the network, there is the elimination of the requirement of a centralized network operator, and also the associated layer of fees involved. Likewise, distributed networks are more reliable because there is no single point of failure. Lastly, distributed networks, being an open source tends to be more secure compared to the centralized network.