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 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.