What is XRP and what is it used for?
XRP, formerly known as Ripple (XRP), is one of the most recognized, valued and popular cryptocurrencies on the market. It consistently appears in the global top 10 by market capitalization. It was created by Ripple Labs along with its blockchain, the XRP Ledger (XRPL), with the goal of building more efficient infrastructure than the SWIFT system, offering fast, secure and low-cost international transfers.
How does XRP work?
XRP uses the Ripple Protocol Consensus Algorithm (RPCA), a consensus mechanism different from the well-known Proof of Work (PoW) used by bitcoin, litecoin and other cryptocurrencies.
Unlike PoW, where miners compete by solving mathematical problems, RPCA is a consensus among validators (independent nodes chosen by the community and Ripple) in which:
- Each transaction is shared across the network.
- Validators vote on its validity.
- If more than 80% of validators agree, the transaction is confirmed and added to the ledger.
This allows XRP to:
- Process transactions in 3–5 seconds.
- Be highly energy-efficient, since it doesn't need miners or power-hungry equipment.
- Keep the network decentralized and secure (anyone can apply to become a validator).
- Have ultra-low costs, since it doesn't require complex infrastructure or energy competition (fees from 0.00001 XRP).
Thanks to this, XRP is used as a "bridge currency", since it enables exchange between two currencies (usually fiat) that don't have a direct conversion pair.
What does this mean? Imagine a user needs to exchange Chilean pesos (CLP) for Indian rupees (INR) and send them to Mumbai. In the traditional system, they would have to exchange Chilean pesos (CLP) for dollars (USD) at their bank, an app or a currency exchange house, and then send those dollars (USD) to the recipient. The recipient would then have to exchange those dollars (USD) for Indian rupees (INR), paying bank fees on each conversion, with the process taking days (or even weeks).
With XRP, on the other hand, a user can easily exchange Chilean pesos (CLP) for XRP within the XRPL network and send that XRP in seconds. The recipient can then exchange the XRP received for Indian rupees (INR) on their exchange or crypto wallet, all in seconds and at a much lower cost than on other networks.
XRP vs stablecoins
XRP has become an increasingly serious alternative to the stablecoins USDT and USDC, especially for managing international payments. But each asset has its own advantages and disadvantages:
- XRP: volatile, with potential for appreciation, ideal for bridge payments.
- Stablecoins: stable digital assets, pegged to the dollar, ideal for preserving value.
That's why, in December of last year, Ripple Labs introduced Ripple USD (RLUSD), Ripple's official stablecoin, which is backed 1:1 by the dollar to ensure its stability.
This move opens the door to more liquidity within the XRPL and shows the ground stablecoins have been gaining in terms of mass adoption. But it also raises the question of how much users will keep needing XRP as a bridge if they already have a native stablecoin.
Institutions, partnerships and the SEC
In recent years, Ripple Labs has worked with banks and large institutions in the financial ecosystem. Its On-Demand Liquidity (ODL) solution makes it possible to process international payments more cheaply than with SWIFT.
The company has established key strategic partnerships such as:
- Integration of USDC on the XRPL in collaboration with Circle.
- The acquisition of Rail, a stablecoin payments platform.
In addition, the SEC recently dropped its lawsuit against Ripple, opening a new chapter in crypto regulation in the US and around the world.
The future of XRP
XRP and its entire network have the potential to remain key infrastructure for global payments. The arrival of RLUSD and USDC on the XRPL network could increase liquidity, attract more users and encourage the adoption and use of XRP. It is undoubtedly one of the most attractive crypto assets for users, especially for those who constantly need to execute global transactions at low cost and almost instantly.
How to buy XRP in Chile with Skipo
Buying XRP has never been easier. With Skipo you can do it in less than a minute with Chilean pesos or other cryptos, commission-free.
You can also:
- Transfer it to other wallets or exchanges.
- Swap it for USDT or AVAX within the app and activate your Skipo interest-bearing account.
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