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In this post, we will talk about “What is Ripple (XRP) – (Ripple Network – History/ Current Trends 2018)”. Since the inception of Bitcoin, there have been hundreds of other cryptocurrency projects, which all aim at bringing something new to the table. Among all, there are a few more accepted ones, known as altcoins, most of which are beginning to be available on most exchanges currently.
This movement to create and build new things into the cryptocurrency system is attributed to the success of the Bitcoin. No one can really talk about the financial system now, without mentioning the Bitcoin, in fact, the initial bad press surrounding Bitcoin, a way for more and more people to learn about it.
Its name reflects its purpose, Ripple network, helps to transfer money instantly. The thing about these new coins is that they all in one way or the other seem to be an improvement of Bitcoin. Ripple doesn’t show itself as an alternative or competitor to Bitcoin, but rather, a compliment. Looking at the other altcoins, the match to Ripple, in transaction speed is Litecoin, while the system similar to it in the method of operation is Ethereum. In order for Ripple to have a notable place in the cryptocurrency market, it had to offer something similar, but in a different way and for a target purpose. Ripple is the cryptocurrency which has targeted the traditional financial system the most, but not to displace them like Bitcoin, but to assist them in making transactions easier, faster and cheaper. Because of Ripple, you can now make international transfers, which will be completed within minutes or seconds, unlike the usual time interval.
What is Ripple?
Ripple is an open global payment network or system which was developed to carry out payments in real-time. Ripple is a distributed open-source settlement system, which is fast, and effective in carrying out payments across the globe. The current financial system was made before the internet, therefore, strictly speaking, it is out of phase with the current era of world technology, where phones speak, cars drive themselves and billions of people worldwide, are connected to each other in a global village. Transactions with payment providers, banks, and digital asset exchanges are not as effective as they should, and for this reason, the Ripple network was made.
History of Ripple
The current Ripple payment system was birthed out of the Ripplepay, which was initially designed by Ryan Fugger in 2004. Ryan aimed at creating a monetary system which would allow individuals and communities to create their own money, and this system would also be decentralized. It was in 2005 that Ripplepay.com was first introduced, as a financial service for payment, with Ryan Fugger, David Schwartz and Arthur Britto as the original authors of the platform.
Based on the Ripplepay project, a new system was put forward by Jed McCaleb and developed by Arthur Britto and David Schwartz. Chris Larsen, the Ripple CEO, joined the team in August 2012, and that was the year it was initially released.
With many other altcoins, what makes the Ripple network worth the try is that has the most advanced blockchain, which is scalable (handles 1500 transactions per second consistently), secure and interoperates various networks. One may think the Ethereum blockchain, is the best because it allows you operate in many different tokens, but Ripple even beats that because, on the Ripple blockchain, you can transfer funds using fiat, cryptocurrencies and even tokens on platforms.
Ripple (XRP), is to Ripple, as Ether is to Ethereum. It is the unit of currency, used on the Ripple network, and a digital asset which provides the most scalable and currently the fastest way to make payments. Let’s break it down Traditional systems, like banks, finish such payments in 3-5 days; Bitcoin does that in over an hour, Ethereum gets kudos for its speed of over 2 minutes, while Ripple gets the job done in only 4 seconds, using XRP.
So rather than asking why, the question should be why not. This is the lightning speed means of payment, befitting for the times.
How does Ripple payment work?
Ripple uses intermediaries known as gateways to stand between the user and their bank when the user wishes to trade any currency. If you have $400 and you wish to convert it to Euros, because you have an urgent need, all you have to do is a trade on Ripple. Ripple network will automatically source out a Euro trading intermediary that will stand between you and your bank, collecting your $400 and giving you €340 within just 2-5 seconds. It gets better because you can carry this trade out, day or night.
The transaction works cheap also because the Dollars will be converted to XRP, then to Euro s, on the Ripple network. And because the maximum supply of XRP is 100 billion coins, thousands of transactions can take place every second, without obstructing smooth flow.
You guessed right. Banks have come running to be a part of this system, who wants to wait for hours for what can be done in seconds right? Banks such as Santander, Standard Chartered, Westpac, UBS, Bank of Tokyo-MUFG, RBC, American Express, Axis bank and so many others, make use of this system currently. In fact, UK bank, Santander has launched a payment app, to use current for real-time cross-border payments.
Using this system is cheaper for payment providers, and acts to increase their annual revenue while meeting their customers’ need to receive payment with ease and connecting banks, asset exchanges and payment providers together. Using Ripple saves a bank up to $3.76 per payment, and this accumulates over time.
However, before anyone can be a part of Ripple network, user identification is required, including proof of residence, before gateways approve them.
Is Ripple reliable?
With all the hundreds of thousands of transactions which occur on this network every day, Ripple network is like a distributed ledger, which means all transactions are available to be viewed by anyone anywhere. Ripple, however, decided to keep 50 billion coins for payments and hold the remaining to themselves. Currently, over 99% of all the coins are in supply. No hacking, no mistakes, no fraud, no errors, this system has run for 5 years and will still continue this way. What an interesting financial story is has written.