Ripple (payment protocol)
| “XRP exists natively within the Ripple protocol as a counterparty-free currency, as Bitcoin does on the Blockchain. Because XRP is an asset, as opposed to a redeemable balance, it does not require that users trust any specific financial institution to trade or exchange it. All other currencies on Ripple do require some amount of trust, as they each have an issuer, from whom that currency can be redeemed (this includes BTC on the Ripple network).” |
— Ripple protocol ContentsAs a bridge currencyOne of the specific functions of XRP is as a bridge currency, As an anti-spam measureWhen a user conducts a financial transaction in a non-native currency, Ripple charges a transaction fee. The purpose of the fees is to protect against by making the attacks too expensive for hackers. If Ripple were completely free to access, adversaries could broadcast large amounts of “ledger spam” (i.e. fake accounts) and “transaction spam” (i.e. fake transactions) in an attempt to overload the network. This could cause the size of the ledger to become unmanageable and interfere with the network’s ability to quickly settle legitimate transactions. Thus, to engage in trade, each Ripple account is required to have a small reserve of 20 XRP, }} Further readingExternal linksSourceSee Also on BitcoinWiki |