WHAT IS RIPPLE (XRP) is a cryptocurrency designed for use on the Ripple network in order to quickly transfer funds between merchants and buyers using different currencies.
Ripple Labs, an American technology company, created the Ripple Network as a platform for banks and financial institutions to transfer Ripple internationally quickly and at a lower price. Merchants, money receivers, and banks can convert their local currency into XRP, send the local currency to a local destination, and re-convert the XRP to the currency accepted by the merchant.
This reduces both transfer times and fees for banks that may not have a direct relationship with a foreign institution, as long as they are both on the Ripple network.
Silver Ripple Coins
How does Ripple work?
The Ripple network is based on independent computers around the world to monitor the history of each currency by keeping a record of transactions, and this is similar to how other digital currencies, such as Bitcoin and Ethereum, work.
Since this record is not kept in a central location, this record is called a decentralized registry system. This decentralized system allows for increased transparency that banks rely on to send Ripple to other registered financial institutions around the world. Now, banks have the benefits of a larger financial network that they might not have had in the past.
For example, if a merchant in Prague wanted to sell a good or service in Czech Koruna (CZK) to someone using New Zealand dollars (NZD), there might not be banks in these countries that had a direct relationship with each other. Funds through a network of banks, waste time and charge fees along the way.
Ripple allows the bank or ‘gateway’ to simplify the process by changing the local currency of the payer to the Ripple digital currency. It can then be changed back to the merchant’s local currency in just seconds when you reach the recipient’s portal, or held in WHAT IS RIPPLE (XRP).
To what extent is Ripple open source?
The Ripple network is the main network of communication between global banks and financial institutions. They use this platform to easily transfer money to all parts of the world using the currency of the Ripple network.
Ripple Labs, which manages the network, puts the protocols in place, and this financial institutions reduce processing times, ensure protocol transparency, and report suspicious activities such as money laundering. While the validators work independently, the operations of the Ripple network are centralized and not open to developers.
Ripple Labs offers an open source version of its software for developers who want to integrate Ripple payments into their software and applications. This service is called RippleX, and it has open source aspects.
Ripple’s main services, unlike other cryptocurrencies, focus on fast international currency transfers. This means that while their networks rely on a decentralized registry and active authenticators, they still retain control over how the network is used to ensure trust in their platform.
Ripple terminology WHAT IS RIPPLE (XRP)
RTXP – Ripple Transaction Protocol.
Central – A centralized regulatory body, such as Ripple Labs, that establishes network rules.
Consensus – when more than 80% of the auditors agree to the deal. This is a huge advantage over other blockchain technologies.
Decentralization – is a system that operates without an individual body controlling stakeholders or operators.
Paths – The smallest unit of Ripple. It is 6 decimal points and is defined as stopping potential spam, or unwanted transactions on the network.
Gateway – a place to convert local currency to Ripple, or to convert Ripple to local currency. The portal can be banks, financial institutions and others.
Mining – Verifications of transactions for digital currency. This is not available on the Ripple network.
Node – a validator on the Ripple network.
Open source – a computer program or part of it whose code is made available to developers with the ability to change sections of the code as needed.
Ripple Network – is a software platform for banks and financial institutions to access Ripple.
Replex – is an open source platform that allows developers to add Ripple payment system to their applications.
Unique Node List (UNL) – A list of recommended validators on the Ripple network provided by Ripple Labs. Validators – Independent computers that manage Ripple’s records and confirm transactions.
Ripple – is the currency issued by Ripple Labs.
Ripple Register – A record that keeps a history of each currency’s transactions.