How do XRP and XRP ledger differ from each other? Perhaps it is time for an in-depth exploration of the two especially now that the two are gaining traction as the market is heating up.

XRP ledger made its debut in 2012, which means it is one of the pioneers in the blockchain segment. It is a product of Ripple Labs. Like most other blockchains, it boasts of characteristics such as being decentralized, permission-less and open-source. It also offers smart contracts and therefore can support decentralized apps (Dapps).

The XRP cryptocurrency and uses

XRP Ledger has a native cryptocurrency called XRP. It plays multiple roles in the network and can be described as the backbone of the XRP ledger. Let’s take a look at some of its uses:

  1. Transactions- XRP ledger users use XRP as the medium of transactions within the network
  2. Liquidity- The XRP cryptocurrency provides liquidity within its ecosystem. The biggest benefit for this is that it makes it easy to move value within its native blockchain ecosystem.
  3. XRP acts as a bridge currency to facilitate cross-border payments.
  4. It is used as a reserve asset to secure the XRP ledger network.
  5. XRP can be traded against other assets.

Now that we are familiar with XRP uses cases, here’s a look at how it differs with the XRP ledger’s use cases.

  • As a network and digital ledger, its primary function is to process transactions.
  • It is the network on which cross-border transactions relating to ODL are conducted. One of the major advantages is that it offers these services rapidly, cost-effectively and in a secure manner.
  • Smart contract capabilities allow for programmable and automated financial agreements.
  • The XRP ledger has extra features such as payment channels and escrow which boost its functionality in financial applications.
  • The XRP Ledger also supports the creation and deployment of digital assets including tokens and stablecoins on its network.

Why XRP Ledger has not been as widely adopted

One would expect that the XRP Ledger would be widely adopted and used across the world. Especially considering that it offers features that seem ideal for the financial industry. The reality if things is far much different. While the network has achieved a considerable degree of adoption, the pace of progress has been slow.

The main reason for XRP Ledger’s relatively slow pace of adoption was the lengthy legal battle between Ripple Labs and the U.S Securities and Exchange Commission (SEC). The law suit kicked off in December 2020 and initially accused XRP as a security.

The legal battle which has dragged on for years ended up denting XRP ledger’s market confidence. Consequently. Potential investors and businesses have been hesitant to embrace the network and its services.

Although the Case is still ongoing, Ripple has so far emerged victorious in some regards. However, the SEC has been relentless following claims that it intends to appeal. Nevertheless, the case is closing its tail end, and a favorable final ruling for Ripple may finally clear the adoption hurdles.

How to invest in the XRP ledger

The primary method of investing in XRP Ledger is to buy into its XRP token. This can be done by purchasing it on centralized and decentralized exchanges. The asset can be held in private wallets for extended durations or traded during shorter market swings.

Those planning to hold on to the XRP cryptocurrency for passive gains can do so on reliable yield farming platforms. As always this information should not be used as financial advice but is for educative purposes only. Always conduct your own due diligence before investing your hard-earned funds.

 

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