What is Ripple?

• 30 April 2017 | 1234 Views | By Mint2Save

Payment protocols are the future of digital money. With the increasing density of digital payments and desperation of authorities to solve problems related to it, payment protocols seem to be the sole answer to all their problems. In this article, we are going to explore a next generation payment protocol named Ripple that essentially works on multiple currencies and gives an amazing cross country transaction service.

Ripple is a well known digital currency cum currency exchange and a global open payment network that works with all currencies.  Ripple was launched in 2012 which is a new kind of crypto currency, which allows secure and immediate any size global financial transactions with no charge or for free.

Everyone in the world from the individuals, corporations, Banks to the government can easily connect to this network to send, receive, purchase or sell any currency whether it is gold, XRP, USD or Bitcoins. The main aim of Ripple is to free everyone from using wallet gardens such as credit cards, banks, PayPal, and other payment methods which restricts access with charges for currency or fees. Ripple also consists of its own currency known as ripple identified with foreign exchange symbol XRP.

Basic functions of Ripple or How does it work?

1. Digital currency:

To ease the flow of money it consists a native currency called XRP ripples acts as a medium of exchange  and it is a value reserve, which is mainly be used to transfer money in diverse currency within the network. Ripple prevents the network from useless interference and denial-of-service attacks.

2. Open payment system:

Because of its multi currency network it allows the transfer of all currencies directly and instantly from one place to another place without involving any cost. All the parties connected to ripple can easily send, buy and receive or sell money to anyone. Thus, it is a global open payments system which works with all the currencies worldwide.

3. Currency exchange:

Ripples works as a currency exchange system that facilitates multi currency transfers. There are several currency traders and banks which do offer and bids to purchase and sell currencies. The system automatically performs the exchange at the greatest rate in the network when a transfer is made in one currency to be delivered in another one.

Obviously here the question arises, is ripple same like bit coin?

Yes, there are many similarities and dissimilarities between both.

Similarities:

• Ripple and Bit coin, both have multi signature support.
• Both Ripple and Bit coin allow nameless, free, peer to peer payment networks over the internet and has low to no fees for transactions.
• Unlike traditional payment methods such as PayPal, VISA, etc., which runs on closed, proprietary, for-profit networks, both Ripple and Bit coin are not owned and controlled by any one and thus are open source protocols.
• Both remove various monetary trust requirements.

Dissimilarities:

• In terms of working Ripple can send and can automatically exchange currencies and even faster than Bit coin as it only requires a few seconds to finalize transactions.
• Ripple is a decentralized transaction currency that includes the currency called XRP ripples, but Bit coin is only a decentralized digital currency.
• Bitcoin cannot track account balances of any existing currency, but Ripple can.
• Ripple has no mining or proof of work or direct monetary reward for running a ripple server, but can solve double spending problem with consent.

How many Ripples will there be?

Half of ripples are to be released for circulation and company plans to ultimately create 100 billion ripples.

Ripple works for whom?

1. Financial institutions or Banks

Ripple works with the banks as their back end technology to send money all over the world with no charge. Banks by using ripple can meet their demand instant at low cost which in turn results in new revenue opportunities, lowest cost of settlement and a good customer experience. Using ripple, Banks and other institutions can also use it to place bids and offers to buy or sell currencies.

2. Individuals

While using ripple every consumer will have their own digital wallet that support all currencies and through which individuals can take use of their wallets to buy them as an investment or trade currencies.

3. Merchants:

As the consumers use their ripple wallets to pay or buy for things which ultimately ensure merchants to use the network to sell all over the world and have the capability to get paid in any currency.

Ripple has currently introduced various new features that may improve the Ripple Consensus Ledger or RCL and Inter ledger Protocol  or ILP by bringing the Internet of Value to life and which has an ability to send tens of thousands of transactions per second.

The Ripple.com website was created by Open Coin by CEO Chris Larsen and CTO Jed Mc Caleb, so as to inform the public about the network in order to distribute the XRP currency. Ripple is a traditional crypto currency that has gained a lot and is now the second highest market capitalization of any cryptocurrency which appear to be increasing day by day.

Adoption of Ripple

Not even five years have passed, but Ripple has been aggressively adopted and used by banks as well as other financial firms all over the world. In the year 2014, Fidor, a German internet bank, was the first to adopt and implement Ripple. Since then, top 15 banks spread over 9 countries have adopted to this payment protocol.

Here is the list of new banks that have recently adopted Ripple Protocol:

The number is set to rise in a more steep manner as more and more companies all over the world seek to reduce their costs and time of transaction. Ripple, being a well sorted and managed payment protocol, will soon create a new generation for cross country secure payments.

It is a universal truth that a customer creates a bank and being dependent on customer’s money makes banks primarily responsible for giving best returns and providing best transaction deals.

Ripple puts a bank light years ahead of the competition as not only reduced transaction cost is there, but also a lower turn around for the transaction.

Ripple definitely defines the phrase Internet of Value for us.