Ripple – What is it and how does it work?

Bitcoin is probably the pioneer of cryptocurrency, and there are a lot who are fighting over its throne. However, in order stay competitive, these pretenders look for ways that would allow them be “one of a kind.” Perhaps, the most mind boggling one is “Ripple.” A much more focused cryptocurrency in a very localized space.

For those who are not familiar with what Ripple is, allow us to enlighten your minds. Ripple is classified as a cryptocurrency, however, the way it was discovered and the way it functions is something unique– not what you often find in other cryptocurrencies. That’s why experts recommend to research first before giving this cryptocurrency a try in order to see if it’s really something that would work for you or not.

Ripple Origin

Ripple was first discovered way back in 2012, the time it was initially launched as one of the receivers of the first public cryptocurrency on Bitcoin Talk Forums. Around 30,000 XRP tokens were given away for the users to try and have a better understanding of what it is about. For those who have been part of this kind of investment, this is somewhat new– a p2p payment network that allows anyone to issue debt– which is considered as a currency agnostic.

For those who are having difficulty in understanding what this actually means, Ripple basically prevents network spam.

How Does It Work?

According to OpenCoin– the founder of Ripple– the main purpose of the currency is to keep the money flowing smoothly. There’s even a blog post that explains the short history of Ripple, together with its transportability that also affects the economy in a sense that banks, as well as other institutions hinder the processing of finances with processing delays and transaction fees. The aim of Ripple is to be able to build a localized digital currency established by bitcoin.

Ripple Functioning Like the Internet

According to the chief cryptographer of Ripple, David Schwartz, a lot of payment systems that we have today can be compared to what email was like back in the 80s. Wherein, each provider created a unique system that can be used by their clients. The problem is, if users utilize different systems, it would be a challenge to connect with one another. With the help of Ripple, it becomes possible to connect various payment systems as a single body. Aside from that, experts also look forward to seeing large companies losing their power over the flow of other client’s cash, similar to how they lost control over the flow of details.

Designed for the Banking Industry

Basically, Ripple is specifically made for the banking industry. That means with the use of Ripple Network, it becomes possible for banks to conduct payments across borders in a timely and cost effective manner. As a blockchain system, the information is not only transparent, but immutable as well. The only disadvantage is that unlike bitcoin, Ripple is centralized.

The Banks’ Reaction

There are actually a lot of banks, especially in Europe, Asia, and the US that have been using Ripple to process transactions efficiently and at a very affordable cost. A few years from now, it’s expected that more banks would adopt Ripple as it’s the most practical route, allowing them to operate more efficiently and save money.

How Fast Can It Settle Payments?

As astonishing as it may sound, Ripple is actually capable of settling payment in a matter of seconds– in fact, it can complete a transaction in just 4 seconds. This is very impressive considering the fact that other cryptocurrencies are operating at a much slower pace.

Another wonderful thing about Ripple is that it’s scalable. It could handle 1,500 transactions per second and works on a 24/7 basis. Even developers assert that it could scale to levels higher than VISA and the like.

How Would Bitcoin Users Benefit?

Aside from allowing bitcoin to connect in a number of ways, as well as those who are using other types of currency, Ripple also ensures a faster, and hassle-free transaction with better order. As an appointed network, they don’t solely depend on one company to handle and protect the transaction database. That means there’s no need to wait for block verification and everything happens simultaneously.

Another wonderful thing about utilizing peer-to-peer is that there’s no need to worry about system failure anymore.

What is the Blockchain?

Cryptocurrencies are pretty popular at the moment. So, even if you have not had any particular interest in this brave new world of finance, chances are that you have heard a few things about cryptocurencies, otherwise known as virtual currencies.

One word that gets thrown around a lot is blockchain. The entire world has probably heard about it. But ironically, few can fully explain what the term blockchain means, how it works, or even why you should care about it.

What is Blockchain?

And so, what is blockchain? Or even more specifically, what is a blockchain? All these are valid questions; and it is surprising how many people are at a loss to explain what the term means. That’s probably because you don’t need to know what blockchain means to invest and make money using cryptocurrencies.

To begin with, blockchain is a technology that came about with the father of all cryptocurrencies – Bitcoin. To say the least, blockchain technology is the backbone of any virtual currency in existence today. Otherwise, blockchain is a digital record of a financial transaction and other transactions leading up to it.

What Makes Blockchain Technology Special?

What gives this technology a reputation as a groundbreaking financial discovery is the fact that it is incorruptible and decentralized. This makes up for many flaws that exist in the traditional financial system.

Thanks to blockchain technology, a transaction’s details are duplicated several times, and linked to all the preceding transactions. This makes it impossible for any single party to modify a transaction’s information to their benefit.

For instance, a hacker would have to hack a particular block, and every other former block to be successful. That is practically impossible, which is why the technology is so astoundingly secure. Furthermore, this financial information is publicly available and decentralized – it is spread out over countless computers.

That is what makes blockchain technology so ironclad. No single entity, be it be a bank, a government, or even a hacker, can tamper with the details of blockchain transactions.

So, to put it simply, blockchain is a safer and more reliable way of handling online-based financial transactions. And although the mainstream banking industry is beginning to appreciate the benefits blockchain technology has to offer, it is primarily associated with virtual currencies. That is why the terms cryptocurrency and blockchain technology still go hand in hand today.

How Does Blockchain Work?

Here is how blockchain works – to avoid having to rely on the integrity of another party in a financial deal, or involving an expensive third party, blockchain takes on the role of a cheap and independent go-between.

Based on a script detailing the terms of the contract you are making with someone else, the blockchain will know how to settle the transaction when the conditions of the contract are met. So, if someone acknowledges the receipt of goods, the technology will know to make the escrowed cash payment to the seller.

The brilliance of this technology is that it is smart enough to know that the contract conditions have been met without the need for additional input from any of the parties. For this reason, the system is completely impartial. To top it off, the technology works fast and at a much lower cost.

How Blockchain Technology Can Make You Money

A lot of people are investing in cryptocurrencies and making themselves fortunes. Many of them cannot even offer a coherent explanation of what blockchain is, but they still make money through their investments.

As mentioned earlier, blockchain is the backbone to any virtual currency. So, once you understand what blockchain is, you are pretty much conversant on how any cryptocurrency is configured to function. And this knowledge should give you an upper hand as you dip your toe into the world of cryptocurrency investments.

Some people speculate on the prices of virtual currencies, trading them in exchanges for a profit. This is sort of like a regular forex exchange transaction. The upside is that these new-age currencies tend to experience deeper price fluctuations, which means you will get better opportunities for profits if you take the right positions in these transactions.

You can also make money, indirectly, by accepting cryptocurrency payments for your goods and services. Being safer, you will have a better chance of getting paid for your services. Additionally, since blockchain technology comes with reduced transaction costs, you will save quite a bit of money over time.

It is also possible to make money through blockchain technology by setting up computer rigs to help mine virtual currencies. Depending on the size of your crypto mining operation, you can rake in hundreds or even thousands of dollars each month through cryptocurrency mining. One of the biggest companies that provide mining services is BitClub, they offer mining pools where you can earn bitcoin by getting together with other people. It’s worth checking out if you want to start immediately.

There are countless other ways to make money through cryptocurrencies. For instance, you can register with a bitcoin faucet site and get paid to view ads. You can also earn virtual currency for small online tasks, and so forth. You just need to do a little research to discover where your most promising path to blockchain-based fortunes lies.