Ripple, is a US-based technology company, and a real-time gross settlement system, currency exchange and remittance network developed by Ripple Labs Inc. “secure, instantly and nearly free global financial transactions of any size with no chargebacks.
What is Ripple?
Ripple was developed by Jed McCaleb and created by Arthur Britto and David Schwartz, who then approached Ryan Fugger, who debuted in 2005 as a financial service to provide members of an online community through a global network with safe payment options. A framework named Open coin that would become Ripple was developed by Fugger. In order to allow financial institutions to move money with negligible fees and wait-time, the company has developed its own type of digital currency known as XRP. In 2013, the company recorded interest from banks in using its payment system.
Ripple Labs continued as the primary contributors of code to the consensus verification system behind Ripple, which can “integrate with banks’ existing networks.” Since 2013, the protocol has been adopted by an increasing number of financial institutions to “[offer] an alternative remittance option” to consumers. By December 2014 Ripple Labs began working with global payments service Earthport, combining Ripple’s software with Earthport’s payment services system. The partnership marked the first network usage of the Ripple protocol. On December 29, 2017, XRP briefly became the second largest cryptocurrency, with a market capitalization of US$73 billion.
When bitcoin was developed as a viable currency with the ability to hang around, other cryptocurrencies started to emerge in its aftermath to try to dethrone it.
Bitcoin and Ethereum are the two major cryptocurrencies in the world by market value, but the third biggest – Ripple – stands out from them.
Ripple’s technology is built to make transactions simpler and easier for banks, making it a more common crypto-currency alternative for larger financial institutions. Although Ripple is also used to refer to the XRP cryptocurrency, much of the XRP is currently owned by the business (formerly known as Ripple Labs). Not only does Ripple deliver a variety of payment schemes, but it owns around 60 billion XRPs and keeps 55 billion XRPs in an escrow account. They’re able to sell up to one billion of these a month – but they rarely do.
- The corporation behind XRP, the cryptocurrency itself, is Ripple
- With high transaction costs, Bitcoin transaction confirmations can take several minutes, although XRP transactions are confirmed with little cost in seconds
- XRP is a technology primarily known for its protocol and digital payment network
- The xrp payment system is used by several major banks.
How does Ripple work?
Ripple functions similarly to the Hawala scheme, except that there are Ripple gateways instead of Hawala dealers. Usually, financial institutions such as Bitstamp and TheRockTrading are such gateways (validators/ servers). The Ripple network is a relatively wide network where not everyone using Ripple knows and trusts one another. In order to get around this, Ripple uses trust chains to bind Ripple gateways. Chains of trust are basically relations between two gateways that trust each other, although there may also be indirect connections of trust between gateways, as seen in the next picture.
Ripple gateways use https to transport IOU payment data to each other: the same protocol that banks are now using for encrypted online credit card payments. The Ripple network triggers the gateways involved in the transaction to update their ledgers 3 to 4 seconds after a payment is made.
An average fee of 0.00001 XRP (10 drops) is expected for each transaction and can increase with higher than normal loads. Who are the beneficiaries of these transaction fees? In reality, these tokens are lost and so all the XRP token holders themselves are the beneficiaries through a reduction in token supply.
What is the Ripple Coin?
Ripple coins makes operating a high-performance payments company simpler than it’s ever been.
Financial institutions are able to grow into new markets around the world with the most innovative blockchain technology for global payments and also remove pre-funding by leveraging the power of XRP via the On-Demand Liquidity service of Ripple coin.
The fact that it is meant to be used and embraced as such by major financial players means that Ripple has a lot of space for growth and that typically translates well into the XRP price, making it a good coin to invest in.
XRP is designed for payments as a digital asset. It is the native digital asset on the XRP Ledger—an open-source, permission less and decentralized block chain technology that can settle transactions in 3-5 seconds.
XRP can be sent directly without a central intermediary, making it a versatile method to quickly and easily bridge two separate currencies. For ANY form of currency or asset that Ripple gateways are prepared to accept, the Ripple Network can be used. The native currency used in the Ripple method is XRP. If a chain of trust between two Ripple gateways cannot be identified by the network, then the two gateways can transact with XRP.
How Many Ripple Coins Are There?
Although there are 100 billion XRP tokens in existence, most are not yet in circulation. As of this writing, Ripple Labs owns approximately 60 billion XRPs, 6.25 billion of which are directly held and 55 billion of which for future delivery are in escrow accounts.
The value of all XRP in circulation is $31.52 billion based on the current XPR price of just under $0.80, making it the third-largest cryptocurrency by market cap. The combined value of all XRPs that exist, however, is almost $80 billion.
Over the last two weeks, the Ripple price has been consolidating within a small range. Although this altcoin continues to make a series of higher highs and higher lows in an uptrend, there are two crucial thresholds that will decide where it goes next. After rising to an annual high of $0.76, Ripple’s price fell all the way down to $0.35 on February 2. This cryptocurrency formed an ascending channel after the major downswing, where it has been contained over the last two weeks.
At the time of writing, the XRP price is trading at $0.55 around the upper trend line of the channel, waiting to set a strong trend.