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Ripple

ripple

Ripple is an alternative cryptocurrency (Altcoin) that, although it is based on Bitcoin technology, aims to solve several of Bitcoin’s problems, such as the time it takes to verify transactions. This coin cannot be mined since the contribution is based on the computing power used to maintain the network.

It is based on the Ripple Transaction Protocol (RTXP) or Ripple protocol, which is a real-time gross settlement, currency exchange, and remittance network. It is based on an open-source distributed Internet protocol, a consensus book, and a currency called Ripple (XRP).

This technology was created in 2012 with the goal of enabling “secure, instant and almost free global financial transactions of any size without chargebacks.” It supports fiat coins, cryptocurrency, merchandise, or any other unit of value such as frequent flyer miles or mobile minutes. The network can function without the Ripple company. Validators include firms, Internet service providers, and the Massachusetts Institute of Technology.

The blast wave has been increasingly adopted by banks and payment networks as settlement infrastructure technology, with American Banker explaining that “from the banks’ perspective, distributed ledgers such as the Ripple system have some advantages over cryptocurrencies such as Bitcoin, including price and security.

As of May 2021, XRP’s market capitalization is $55.5 billion, making it the seventh-largest cryptographic currency in circulation.

Early development of Ripple

Ryan Fugger, a web designer from Vancouver, Canada, developed Ripplepay, the predecessor of the Ripple payment protocol, in 2004. Fugger designed the idea after working in a Vancouver exchange system facility, and he intended to create a decentralized monetary system that could enable individuals to create their own money efficiently. Fugger’s first attempt to create this system, RipplePay.com, debuted in 2005 as a financial service that provides secure payment options to members of an online community through a global network.

This creation led to the design of a new system by Jed McCaleb, creator of the eDonkey software, that was designed by David Schwartz and Arthur Britto. In May 2011, they began to develop a digital currency in which transactions were verified by consensus among network members, rather than by the mining process, as is the case with Bitcoin, which is supported by blockchain. This Ripple new system version was then designed to eliminate Bitcoin dependency on centralized exchanges, use less electricity, and make crossings faster. In September 2012, the Ripple team founded Open Coin, Inc.

OpenCoin and Ripple Labs

Based on Ryan Fugger’s concepts, “OpenCoin” began to develop the Ripple Transaction Protocol (RTXP). This protocol then allowed the direct transfer of money between two parties. The protocol permitted the commissions and times of the traditional banking system to be circumvented, and any currency could be exchanged, including US dollars, euros, yen, rupees, gold, and airline miles.

To maintain security, OpenCoin programmed Ripple to rely on a common ledger which “would be managed by a network of independent servers, which would constantly be comparing their transaction logs.” Servers could belong to anyone, including banks or trademarks.

Focus on the banking market

By 2014, Ripple Labs was involved in multiple protocol-related development projects, launching an iOS application for the iPhone which allowed users to send & receive any currency via their iPhones. However, this application no longer exists. In July 2014, Ripple Labs proposed Codius, a project to develop a new intelligent contract system.

The protocol has been taken up by many financial institutions to “provide an alternative trading system” for their clients. Ripple allows international payments for specific customers, corporations, and other banks. Larsen mentioned that “Ripple simplifies the exchange process by creating a transparent point-to-point transfer system in which banks do not have to pay bank fees.”

The first bank to use Ripple was the Fidor Bank in Munich, which announced its partnership in 2014. In September of that year, the New Jersey-based Cross River Bank and Kansas-based CBW Bank announced that they would begin using the Ripple protocol. By the end of 2015, Ripple Labs began working with Earthport Global Payment Service, combining Ripple software with Earthport’s payment system.

In September 2016, Ripple announced the creation of the first interbank group to make global payments based on financial distribution technology. By April 2017, the members of this network later dubbed as the Global Payments Steering Group (GPSG), are made up of Bank of America, Merrill Lynch, Canadian Imperial Bank of Commerce, Mitsubishi UFJ Financial Group, Royal Bank of Canada, Santander, Unicredit, and Westpac Banking Corporation.

Design features of Ripple

Gateways

Any organization or person can be a “gateway,” a link that allows users to make transactions with money and draw cash from Ripple. Accepting cash deposits from users and issuing balances are in Ripple’s distributed general ledger. They can also repay balances in the ledger against deposits held when cash is withdrawn. In practice, gateways can be similar to banks but share a ledger thanks to the Ripple protocol.

Lines of confidence

Users must “build trust” within the Ripple gateway. This creation of a trusted line indicates to the network that the user is satisfied with the risk that the gateway counterparty can offer. The user must also place a value as a limit to this trust and create a similar limit for each coin deposited in this gateway.

Credibility

Similar to the reasons during the Free Banking Age in the United States, the value of a coin can vary significantly depending on the solvency of a gateway. A unified ripple gateway with operating rules must be in place.

Book of consensus

Like any cryptocurrency, Ripple is based on a common ledger. Users operate as independent transaction validators who are continuously checking transaction logs. Although the Ripple protocol is open-source, it has a company (Ripple Labs) that is in charge of further developing the protocol that confirms financial operations. Ripple Labs are currently helping banks merge with the Ripple network. The consensus process is distributed, and its objective is that each server makes the same number of transactions in the book.

Bitcoin Bridge

This is essentially a link between the two crypto coins. The bridge enables payments to any Bitcoin user directly from a Ripple account without having to hold the digital currency. Any merchant who accepts Bitcoin has the potential to accept any currency in the world.

Market producers

Any user of Ripple can operate as a market producer by offering an arbitration service such as providing market liquidity, intra-gateway currency conversion, rippling, etc. According to Ripple’s website, by maintaining balances in multiple currencies and connecting to multiple gateways, market makers facilitate payments between users where there is no direct trust, allowing exchanges through gateways.

Open API

Ripple Labs built the protocol to be user-friendly with the developer community, and the resulting features include an API for your payment network, based on the popular REST API standard.

Future overview

In the case of Ripple, the currency is deflationary, which adds interest to the expectations of future revaluation. What does this mean? Although the current supply of Ripple is limited, its number is in constant decline as each time you use its protocol, a small fraction of the coin is consumed. This circumstance means that its value tends to increase in the future as the supply of currency decreases.

According to the “Global Payments Industry,” in 2024, the global payments industry will generate $1.8 trillion in revenue, with an average growth rate of up to 4%. The size of the global payments industry and its growth rate give an idea of the vast potential that Ripple has if it succeeds in consolidating itself, as its recent history suggests, as an alternative to current international transaction protocols.

Due to its uniqueness and the importance of the technology that supports it, Ripple is one of these crypto coins that should not go unnoticed by all those interested in this market.

How to buy Ripple

Ripple is the seventh-largest cryptocurrency by market capitalization today, behind Bitcoin, Ethereum, and Bitcoin Cash. Ripple is a global settlement network, making it easy to transfer almost any currency to anyone in the world in seconds. The Ripple platform has transformed the obsolete archaic system of sending money via SWIFT or Western Union.

Get a Ripple wallet, like Rippex. The secret password must be noted and stored, as it will give users access to their wallets regardless of why. The XRP wallets generally work the same way as Bitcoin wallets, but they must be financed with a reserve of 20 XRP.

You can buy Ripple on pages like Bitstamp or Kraken, and buying XRP on Bitstamp is very easy. First, you visit the Bitstamp.net registration site and enter your email, first and last name, and country. A username and password will be sent to the mail address you registered. Login with the information provided.

Go to “Account,” “Verify,” enter your ID Document information and other required data and click on “Submit Verification Request” to proceed. Once verified, in “Deposit,” you can select your preferred bank transferred method. The page’s bank details will be shown, and you can make transfers to it to deposit funds to your account.

Once you have the money, go to the “Buy/Sell,” “Buy” section at Bitstamp, and enter an amount. On top of “Buy XRP”, the approximate amount of XRP you will receive will be shown. Buy them and transfer them directly to your Ripple wallet.

However, pages such as Bitstamp or Kraken are usually not very user-friendly. A simpler way to buy this currency is through an exchanger page, like Changelly.

You can register on Changelly for free using one of your social media accounts or providing your email. Once you have done so, go to the “Amounts” section and enter the amount you want to convert to XRP. Enter your Ripple wallet address in the “Recipient’s address” field and click confirm.

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