Ripple (Cryptocurrency)

Ripple is a technology that acts as both a cryptocurrency and digital payment network for financial transactions, first launched in 2012 and co-founded by Chris Larsen and Jed McCaleb.

coins for cryptocurrency It is pre-formed and labeled XRP.

Ripple is better known for its digital payment protocol than the Ripple cryptocurrency XRP. It operates on an open-source and peer-to-peer decentralized platform that allows for smooth money transfers in any form be it USD, Yen, litecoin or bitcoin.

To understand how the system works, consider a money transfer structure where two parties on both sides of the transaction use their preferred intermediaries to receive funds.

Lawrence wants to send $100 to David who lives in another city, he gives Kate the local agent the money sent to David with a password that David must answer correctly to receive the money. Notify David’s agent, Rose, of the transaction details – payee to refund and password If David gives Rose the correct password, it will give him $100. Kate will owe an additional $100. Rose can save all of Kate’s debt notes, or IOUs. For example, if Rose represents Martin and Martin wants to transfer $100 to Itios representing Kate, this will cause The $100 balance owed to Rose due to Itios will be paid from Kate’s account.

Although the ripple network is a bit more complex than this example. But the example illustrates the basics of how the ripple system works. In the example above, it can be seen that trust is required to initiate a transaction – trust between Lawrence and Kate, Kate and Rose, and David and Rose Ripple It uses a medium known as Gateway which acts as a link in the chain of trust between the two parties wishing to transact the Gateway. Acting as a credit intermediary that receives and sends currencies to public addresses through the Ripple network, anyone or any business can register and open a gateway that allows registrants to act as intermediaries in liquidity-maintaining currency exchanges. and transfer money in the network

important points

The XRP digital currency acts as a bridge currency to another, it does not distinguish between one fiat/cryptocurrency and another, making it easy for any exchange. Each currency in the ecosystem has its own gateway such as CADBluzelle, BTCbitstamp and USDsnapswap. If David wants bitcoins to pay for the services he provides, Lawrence doesn’t need bitcoins. He can. Send payments to his gateway in Canadian dollars (CAD) and David can receive bitcoins from his gateway. It is not necessary to use a single gateway to initiate a complete transaction, multiple gateways can be used to build trust among the trustees. use

Holding a balance with a gateway exposes the user to counterparty risk, a risk that is evident in traditional banking systems, if the gateway fails to honor an IOU or liability, the user may lose the value of the money held at the gateway. Those that don’t trust the gateway can then transact with the trusted gateway which will be associated with the gateway. This way the IOU stays with an accredited or trusted gateway, counterparty risk does not apply to most bitcoins and other altcoins as the user’s bitcoin is not the user’s IOU or liability. another

Ripple. How does it work?

The Ripple network does not work with proof-of-work systems like bitcoin or proof-of-stake systems like bitcoin. Nxt but transactions depend on the consensus protocol to check account balances and transactions in the system Consensus works to improve the integrity of the system by preventing double spending Ripple users who initiate transactions with multiple gateway, but send the same $100 to a skilled gateway system will have all But the first transaction is deleted, each node distributed consensus decision at the first transaction by poll to determine the majority of votes, confirmation is instant and takes about 5 seconds, because there is no central authority Decide who can set up nodes and verify transactions Ripple platform is therefore described as decentralized.

Ripple tracks all IOUs in a given currency for any user or gateway, credit IOUs, and transactions made between them. Ripple wallets are available on the consensus ledger. Ripple, although the history of financial transactions is publicly available and published on the blockchain. But the information is not linked to the ID or account of any person or business. However, public records of all correspondence are sensitive to data de-anonymization measures.

Ripple improves on some of the disadvantages inherent to traditional banks, transactions are settled in seconds on the Ripple network, although the platform handles millions of transactions, unlike banks which can take days or weeks to process. Bank Transfer Transaction fees on Ripple are minimal with the minimum transaction cost required for a standard transaction set at 0.00001 XRP compared to the hefty fees charged by banks for processing payments. cross border

The token ticker for Ripple is XRP as of August 2019. Ripple is the third-largest cryptocurrency by market cap with $13.37 billion, followed by Bitcoin (BTC) at $205.03 billion and Ethereum (ETH) at $205.03 billion. $24.18 billion

Article Source – Investopedia.com