Blockchain – Ripple Cryptocurrency | Ripple vs Bitcoin

FREE Online Courses: Dive into Knowledge for Free. Learn More!

In this article, we will learn about ripple cryptocurrency. Let’s start!!!

What is ripple cryptocurrency?

Ripple is a technology that was released in 2012 by Chris Larsen and Jed McCaleb, which can act as a cryptocurrency as well as a digital payment network for transactions. The token used for the cryptocurrency, XRP is premined (i.e, was mined before the launch of the cryptocurrency).

To sum up, Ripple is the name of the company and the peer-to-peer network owned by it. While XRP serves as the cryptocurrency token. The token acts as a medium of exchange between two currencies or even networks.

Like most blockchains, Ripple is an open-source decentralised peer-to-peer network that facilitates hassle-free money transfer in any currency. Hence, it is also used by major banks.

What makes Ripple unique is that unlike conventional blockchains which use mining to verify transactions, Ripple relies on a consensus mechanism via bank-owned servers. This way, these transactions are eco-friendly, quick and cheap; however, bitcoin transactions are energy-intensive, slower and more expensive in comparison.

  • Founders- Arthur Britto, David Schwartz, Ryan Fugger
  • Developers- Ripple Labs Inc.
  • Initial launch– 2012
  • Stable launch– 0.0/ 15 may 2018
  • Repository– com/ripple
  • Programming language– C++
  • OS- Server: Linux (RHEL, CentOS, Ubuntu), Windows, macOS
  • Type- Real-time gross settlement, currency exchange, remittance
  • Licence- ISC licence

Important Leftovers

  • Ripple is a distributed ledger electronic payment infrastructure and technology
  • It confirms transactions using a consensus process via a network of bank-owned computers.
  • Ripple operations use fewer resources than bitcoin, are verified and executed in seconds, and have extremely low operating costs.
  • It is one of the top five most significant cryptocurrency assets in terms of market valuation.

History of Ripple

Founded by Jed McCaleb and Arthur Britto, and David Schwartz. Ripple’s genesis also involved Ryan Fugger, who had launched a banking transaction to give safe payment alternatives to participants of an internet group over a worldwide network back in 2005. Fugger’s OpenCoin platform eventually turned into XRP. The business has developed its blockchain technology, dubbed XRP, to enable investment banks to transfer funds with little cost and a waiting period. In 2013, the firm stated that banks were interested in using their payment method.

In 2018, a Ripple official said that “we began with the traditional ledger, which we like. However, banks have stated that you cannot bring the full globe on a blockchain.” Ripple is based on a shared blockchain is basically a decentralised system that stores data about all Ripple funds. Ripple immediately verifies funds and balances for transaction transfer and sends payment notifications in a matter of seconds.

Ripple Laboratories remained the principal provider of software to the Ripple disagreement verification mechanism. The method gained accustomed to the US financial system in 2014, despite privacy and regulatory concerns.

XRP

XRP is the digital currency of the Ripple network and actually behaves like a bridge currency for other currencies. If person-A wants bitcoin as payment from person-B, then XRP allows person-B to pay in bitcoins without actually possessing bitcoins. They can send the payment in whatever currency they own and Person-A will receive them in bitcoins using the Ripple network. This is done using gateways.

Technology is evolving rapidly!
Stay updated with DataFlair on WhatsApp!!

Gateways are like a medium or a link between the two parties involved in a transaction. It receives and sends currencies to public addresses over the Ripple network. If the gateway does not honour its liability, users could lose the value of their money. Thus, caution must be maintained.

How Ripple Works?

As mentioned earlier Ripple works on consensus instead of proof-of-stake (like Bitcoin) to validate transactions. Consensus increases system integrity by making sure there is no double-spending.

For example, if a Ripple user wants to send a $100 but opens multiple gateways, then all but the first gateway would be deleted. The decision of which transaction was made first is taken by consensus of a network of distributed nodes. The process roughly takes 5 seconds but ensures a secure and decentralized transaction.

Recognizing the Ripple Effect

Ripple works on an accessible, peer-to-peer autonomous network that enables the smooth movement of money in any currency, like euros, dollars, yen, and even cryptocurrencies such as bitcoin and litecoin. Ripple is a worldwide transactions infrastructure that serves significant banks and financial institutions. XRP is used in its services to allow for fast currency exchange among multiple currencies.

Ripple as a Visual Electronic Money System

To ensure that the platform works, recognize an online payment configuration where the parties involved use their favoured intermediaries to collect the funds on either end of the conversation. Ripple serves as a digital company employing an unofficial method of transmitting cash, generally between nations, without any physical currency changing.

Let us understand with an example.

Let us say Sam wants to give $200 to his friend Raj, but Raj lives in another city. So, Sam gives the money to his broker Rita. But to confirm Raj’s identity, Sam also gives Rita a cryptographic signature. Rita contacts Raj’s broker, Natasha to tell her about the transaction. Once Raj provides the correct passcode, Natasha will hand over the money to him.

Now, Rita and Natasha could either maintain a database of all the transactions that take place between them and settle the money sometime in the future or they could perform opposite actions to equalise the amount.

Even though the Ripple ecosystem is slightly more complicated than this example, it shows the fundamentals of how the Ripple process works. Confidence is necessary to begin a trade, as demonstrated by the examples above: trust among Sam and Rita, Rita and Natasha, and Natasha and Raj.

Ripple employs a channel called Gateway as the connection in the assurance path among two people interested in conducting a trade. Gateway acts as a financial middleman, accepting and sending money to online accounts via the Ripple system. Any person or company can enrol and create a portal, allowing the applicant to operate as a mediator to convert coins, develop and sustain, and transmit funds on the platform.

Ripple vs Bitcoin

Contrary to popular belief, Ripple is not a blockchain. It uses a Hash Tree to summarise the information to compare it across its verification servers in order to reach an agreement. Banks seem to love Ripple because it is engineered for enterprise and its main purpose is to maneuver cash around the globe as quickly as possible.

The XRP, Ripple’s token is not mined like Bitcoin, Ethereum, Litecoin and lots of different cryptocurrencies. Instead, they were issued at the beginning, similar in fashion to the manner a corporation problems stocks once it incorporates. Basically, it simply picked a number(100 billion) and issued several XRP coins.

Position of Ripple at Current Time

Ripple is extremely valuable for its network and ability to maneuver assets around the world quickly, instead of within the XRP token. Currently, this can deal with the SWIFT payment system which is a cumbersome process that depends on the banks having separate accounts in each country they add. Ripple says it’s signed up over a hundred banks (compared to SWIFTs eleven thousand money institutions) together with yank specific.

Security With Ripple Cryptocurrency

The ripple ecosystem has gained a lot of flack for its lack of decentralization as a blockchain-based cryptocurrency. Ripple additionally maintains a trustworthy distinctive Node List (UNL) that means to guard against doubtless malicious or insecure supportive servers. It’s the UNL that controls the network rules, presenting a conundrum.

On the one hand, it protects against problematic validators, but, in theory, a regulatory body or government may be available and force an amendment that won’t be essentially fascinating or is downright invasive. What is more, attributable to a FinCEN violation and fine in 2013, Ripple has updated its policies and can solely acknowledge and advocate gateways that are in compliance with money rules.

According to the money Times, of the eighteen banks and money services corporations in public connected to Ripple, most of them expressed that they “had not nonetheless gone on the far side testing” whereas many had moved on to victimising Ripple’s systems “for moving real cash.” Not one in all sixteen corporations that responded had used the XRP token.

Advantages of XRP

1. It functions as an intermediate currency between two currencies or networks

2. XRP are generated using a less complicated method than mining

3. Allows quick conversions between a number of currencies at low cost

4. Transaction verification does not require Proof-of-work

5. Consensus system used for transaction verification improves system integrity

6. Ripple transactions are eco-friendly and energy efficient

7. XRP transactions are way faster as compared to conventional cryptocurrencies like Bitcoin

8. Allow easy exchange of one currency to another

9. While only 21 Million Bitcoin tokens can be mined, about 1 Billion XRP are released every month making them quite accessible

Specific Factors

Ripple addresses several of the shortcomings of conventional banks. On the Ripple platform, payments are processed in seconds. In contrast, banks may take several days to execute a money transfer. The payment price on Ripple is similarly low, with the lowest transaction value for a typical transaction fixed at 0.00001 XRP, in comparison to the huge costs paid by banks for performing merge transfers.

Conclusion

In this article we familiarised ourselves with the Ripple Network and cryptocurrency. We learnt how it works, what protocols it uses and what are the advantages of XRP over conventional cryptos and fiat currencies. We also reflected on its history and understood the ripple effect. Also we learnt about its security problems and specific factors.

You give me 15 seconds I promise you best tutorials
Please share your happy experience on Google

follow dataflair on YouTube

Leave a Reply

Your email address will not be published. Required fields are marked *