Ripple has recently been in the headlines ranging from the generous donation by Ashton Kutcher on the Ellen Degeneres Show with the currency as well as the steady adoption of the currency by some notable banks around the world. But what is actually this crypto asset all about? This is what we will find out in this piece.
In understanding Ripple, the first point of recognition is that Ripple is a form of cryptocurrency, is rather insufficient, as that is but a part of what it entails. To this, Ripple is both a platform for an open payment network, in the form of RippleNet and a cryptocurrency, in the form of Ripple XRP. The idea of Ripple, though in the works way back in 2004 via an established prototype, is currently regarded to as the brainchild of Ripple Labs and Open Coin, and was released in 2012, whereby, via a company blog post by Open Coin, titled “Ripple and The Purpose Of Money” the goal of Ripple was stated to be, the growth of the decentralized digital approach set out by bitcoin and transform money in a similar fashion to the transformation of information by the internet.
To this, Ripple from a general view is gleaned as an opensource payment system, which utilizes a common ledger managed by a network of self-subsisting validating servers which continuously compare transaction records. Furthermore, it is warped around a shared public database that makes use of a consensus process between said validating servers, to guarantee integrity. Also, it is pertinent to state that, said validating servers can belong to anyone, ranging from either an individual to a bank. Consequently, a proper understanding of Ripple leads this piece to comprehend what the RippleNet and Ripple XRP entails.
As earlier stated, the RippleNet is a platform for an open payment network. However, this alone is not enough to do the RippleNet justice. To this, the RippleNet as an open payment network is a well-constructed system containing institutional payment providers such as banks and money services businesses, as well as individuals, who employ the use of solutions created and developed by Ripple to provide and effect an harmonic experience to send money globally.
Basically, it is a system that creates the simplest, shortest possible combination for the transaction of money or currency to be made. It connects financial institutions, banks, and individuals and allows them to make any transaction in any currency allowed to be used as a medium of exchange, this includes Bitcoin and other forms of cryptocurrency, and these transactions are recorded and lodged on the decentralized XRP ledger.
Furthermore, a good feature of RippleNet is the transaction fee. In regards to collecting transaction fees, Ripple is unlike any other transaction platform. This is not to insinuate that, a transaction is free, rather it collects a very low price from each transaction made. This low commission is $0.00001, which is said to be equivalent to 1/1000th of a cent. There too, basically a free charge.
As stated above, the RippleNet is Summed up as a platform for an open payment network connecting the global financial community for the transaction of currency, and for this platform and the financial community in general, Ripple created a currency known as XRP. The Ripple XRP is the currency crafted for the payment network for all payments and transactions on Ripple network, in order to reduce the time & money associated with cross-border transactions, as well as to act as a mediator for other cryptocurrencies and other exchange mediums. In reference to the XRP being a mediator, this simply connotes that, the XRP is crafted in a way where, if there is need to exchange dollars for pounds, the XRP can be dollar with dollars and pound with pounds, all in the essence to minimize the commission.
Another advantageous feature of the Ripple XRP is the processing time of an XRP transaction, that is each transaction utilizing XRP in the Ripple network is processed in only four seconds, which is in contrast to Bitcoin, which can take up to an hour and Ethereum which takes more than two minutes. Furthermore, XRP as a currency is scalable, in that it has been reported to be able to handle up to 1,500 transactions per second, which in comparison to Bitcoin is far better, as Bitcoin is reportedly able to handle not more than seven in the same timespan. It is also pertinent to highlight that, XRP can be used totally independent from the Ripple network in general, that is, banks and other financial institutions don’t actually need XRP to transfer money on the Ripple network. Also, a feature of the XRP, that is not too popular, is the fact that the Ripple XRP cannot be mined.
In grasping the nature of Ripple, a point or feature of its network to be highlighted on is a specific ommission in the nature of its algorithm, that is the Ripple Protocol Consensus Algorithm. In reference to the ommission aforementioned, Ripple unlike other forms of cryptocurrency as Bitcoin or Ethereum does not possess a blockchain. First off, a blockchain is a ledger digitized and decentralized, for the chronological record of all cryptocurrency transactions, which are made public. Consequently, for a Cryptocurrency to be without a blockchain, pretty much sounds absurd, as verifying of transactions and inspecting the general records of transactions made, becomes impossible. However, Ripple has created its own technology in order to carry out the blockchain’s functions and more. This technology is what is referred to as the Ripple Protocol Consensus Algorithm. Its method of operation is basically warped around the word ‘consensus’, as if every node is in agreement with every other, in respect of a transaction, then that transaction is deemed to have no issue. Whereas, if one node is against the transaction, said transaction will be put on hold the reason for the node being in opposition is solved.
In today’s society, cryptocurrency is a growing trait in the economy and its forms are widely accepted and put in use for their unique advantages and merits. Although compared to most forms of cryptocurrency, Ripple is lacking in popularity and widespread acknowledgment, but still, its nature makes it advantageous to the society, and so this article humbly opines the need for proper recognition, if not for much but for its fast international transactions, its low commission currency exchange, to mention but a few unique traits of Ripple.
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