How is Ripple’s Network Maintained?

Mining, the process of verifying transactions in exchange for the coin, is how validators are compensated on the Ethereum and Bitcoin networks. Contrary to some other coins, Ripple destroys coins with each validated transaction, as a transaction fee.

How is Ripple’s Network Maintained?

Ripple’s money transfer systems are trusted by banks around the world. In order to ensure this trust while remaining transparent, Ripple employs a blend of both centralized and decentralized protocols.

Ripple Labs chooses which protocols validators must follow. In addition, it releases a recommended Unique Node List (UNL) of trusted and verified validators. Ripple users are not required to use these validators for transactions, although it is recommended. In addition, validators operate independently without needing to check in with a central system before updating their ledger.

This begs the question – “Is Ripple a centralized or decentralized platform?”. Ripple is centralized with regard to protocols and acceptance onto the network. It is decentralized with respect to how transactions are validated.

Ripple’s products, including XRP, are created to be moved quickly and efficiently. Ripple Labs’ global network of active users, along with the ability to integrate payments into apps, ensures a use case for XRP.

This can be attractive to traders who feel that XRP holds potential for long-term use. Regardless of XRP’s practicality, it has still proven to be a highly volatile instrument allowing traders to gain exposure to potential gains and losses.

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