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We saw XRP'S price move from 0.47 to a high of 0.93 on Thursday but what actually caused this move and what is the SEC's involvement with ripple?
What is XRP?
XRP is a cryptocurrency that operates on the XRP Ledger, an open-source, public blockchain designed to facilitate fast and low-cost payments.
According to CoinDesk, the XRP Ledger is a network of peer-to-peer servers that powers XRP transactions. XRP serves as a "bridge" between different fiat currencies that may not have direct trading pairs.
The XRP Ledger utilizes the Federated Consensus algorithm, which distinguishes it from traditional proof-of-work or proof-of-stake mechanisms. In this algorithm, network participants are known and trusted by other participants. Unlike miners in other networks, they are not rewarded for securing the network.
The XRP Ledger is known for its speedy settlement of payments, taking less than five seconds. It also boasts a high transaction capacity, capable of handling over 1,500 transactions per second.
What happened at the District Court Hearing?
The recent price jump of XRP was a result of a ruling by the District Court for the Southern District of New York. The court determined that the buying and selling of XRP on digital asset exchanges did not fall under the category of investment contracts, and therefore, did not violate federal securities laws.
The case brought by the US Securities and Exchange Commission (SEC) against Ripple, the company behind XRP, was aimed at determining whether XRP should be classified as a security. If considered a security, the institutional sales of XRP could have been in violation of securities regulations.
In response to the court ruling, Brad Garlinghouse, the CEO of Ripple, expressed that this was a significant win for the cryptocurrency industry in the United States. He saw the ruling as a positive outcome for the entire crypto sector.
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