Since the crypto coins came onto the market many people didn’t understand the fundamental structure of crypto coins and the way they work. Moreover, Each coin has its own space of work where it uses its own rules to run.
There are so many crypto coins in the crypto market like Bitcoin, Litecoin, Bitcoin Cash, Ethereum, Ripple, Doge, USDT, Dash. Every coin has used its formation but XRP(ripple) is quite different.
However, people are in trouble whether to create an address of XRP or not? in contrast, When someone creates a new address then it needs to activate it. it must have to fund 20 XRP as deposit fees. This is a kind of mystery where most people wouldn’t believe because as per like other crypto coins don’t allow to deposit a fund in order to create an address then how XRP would allow funding in an address in order to activate address?
In this article, we will enlighten the areas which we covered and to make your doubts clear about either if it’s true or kind of rumor.
What is the base reserve?
The base reserve is the minimum amount of XRP which is compulsorily required for every address in the ledger. That basic amount is 20 XRP to fund in an address as it’s called Deposit fees.
Why 20 XRP is Necessary?
As per the statement of the organization who are maintaining XRP have said that the fee structure of 20 XRP is to make it an Anti-spam ledger. Where people don’t unnecessarily create an address like they open for nothing sometimes and never use it after. As one of the main factors which were included by the makers that this amount can’t be withdrawn by the individuals as it will be stored or locked up in an address. To protect XRP address from malicious usages an organization took this step in favor of those users who are actually using XRP address in good manners. They also include that the goal is to create a resistance in between the growth of ledger to match improvements in technology so that the current commodity level can always fit the current ledger in RAM and the full ledger history on disk.
Users cannot send this 20 XRP to other addresses. if anyone willing to transfer these coins then they must include or fund more XRP in the address as per reserve requirement.
What if Someone has not enough funds?
Nothing will happen if someone has not pursued an amount of 20 XRP in Ripple address but, they can not be able to use this address until they have 20 XRP in their address and one has to transfer more than 20 XRP as the first transaction to newly created address.
All in the Final words, that address will consider as a non-using address until they deposit enough or at least 20 XRP in an address in order to activate the XRP address.
Example
If someone creates a new XRP address and fund more than 20 XRP. Let’s just assume that someone funded 50 XRP in the new address and if they wanted to transfer funds in someone else’s XRP address then they would only be able to send 30 XRP at the time because the remaining 20 XRP is the necessary fund to keep activated an XRP address. No one will be able to transfer those 20 XRP from the address.
Even whenever you make transactions in future those 20 XRP are inevitable. If someone wants to transfer a big amount then they should have counted the amount by keeping aside those 20 XRP from XRP(ripple) address.
Can I use one xrp address for multiple purposes?
Unlike any normal crypto coins, XRP(ripple) is quite different from them when it comes to rules & regulations. If anyone who is not aware of what XRP addresses more requires apart from 20 XRP as a mandatory amount. This address used for more than one purpose conversely, It has one more function in order to make it more transparent to use for multiple purposes.
That function called a destination tag. The main thing about this functionality is to specify each recipient of the transaction.
What Is the destination tag?
A destination tag is a kind of functionality that identifies the particular recipient in the transaction system.
This tag could be a 9 digit number that used in every XRP address to show the particular recipient. In addition, the destination tag is an optional function for sending XRP to other addresses. However, If someone wants to create that tag then it has no issue. But One thing to assure that some of the exchange systems do require destination tags.
(Note: when you copied your address link in order to forward that address link to your buyer then destination tag also been copied with it. Make sure to check the link before sending it to the buyer.)
On the other hand, the destination tag ain’t necessary if someone has their own personal address for this coin. Conclusively, the main purpose of this function is to identify each recipient‘s transactions.
Conclusion
all the information in this article may confuse all the users first. But the one main thing has cleared that this isn’t a rumor and an actual fact that 20 XRP is mandatory.
XRP(ripple) organizers have corrected all the information. Moreover, they only wanted one thing is that to protect XRP address from filthy hands and provide the best experience to the actual customers.