Ripple is a technology that acts as both a cryptocurrency and a digital payment network for financial transactions. Ripple is more known for its digital payment protocol than its cryptocurrency, XRP. Ripple operates on an open-source and peer-to-peer decentralized platform that allows for a seamless transfer of money in any form, whether USD, Yen, litecoin, or bitcoin.
Why was Ripple created?
Ripple improves on some of the drawbacks attributed to traditional banks. Transactions are settled within seconds on the Ripple network even though the platform handles millions of transactions frequently. This is unlike banks which could take days or weeks to complete a wire transfer. The fee to conduct transactions on Ripple is also minimal, with the minimum transaction cost required for a standard transaction set at 0.00001 XRP, compared to the large fees charged by banks for conducting cross-border payments.
Who created Ripple?
It was first released in 2012 and was co-founded by Chris Larsen and Jed McCaleb.
Which Technology does Ripple use?
Ripple was released in 2012 that acts as both a cryptocurrency and a digital payment network for financial transactions. It uses a ‘global consensus ledger’. The Ripple network is managed by a range of independent servers comparing their transaction records constantly. A new ledger of Ripple is created each second.
How does Ripple work?
- Ripple uses a medium known as Gateway that serves as the link in the trust chain between two parties wanting to make a transaction. The gateway acts as the credit intermediary that receives and sends currencies to public addresses over the Ripple network. Anyone or any business can register and open a gateway which authorizes the registrant to act as the middleman for exchanging currencies, maintaining liquidity, and transferring payments on the network.
- Ripple keeps track of all IOUs in a given currency for any user or gateway. IOU credits and transaction flows that occur between Ripple wallets are publicly available on the Ripple consensus ledger. But even though financial transaction history is publicly recorded and made available on the blockchain, the data is not linked to the ID or account of any individual or business. However, the public record of all dealings, make the information susceptible to de-anonymization measures.
What problems does Ripple solve?
Ripple is a very unique cryptocurrency as it is focused on solving problems related to just one industry — International Payment Transfers.
Is Ripple anonymous/safe?
- The openness with which the Ripple network operates has, on the other hand, also allowed for vulnerabilities to develop. Although the core of the network remains highly liquid, the structure also allows for attacks on certain nodes within the network to cripple some users' access to funds.
- Ripple is good, but XRP’s success for investors is an uphill battle. Since XRP is centralized, if Ripple dies so too does XRP. Although the company promised to pass on a large proportion of the XRP to the users of the network, so far only small amounts have been transferred.
What makes Ripple special?
An international money transfer takes about a week. On the other hand, Ripple can make it happen within seconds. Also, the fees are considerably lower when compared to what is charged by financial institutions and other cryptocurrencies.