Ripple, also known as the Ripple Transaction Protocol (RTXP) or Ripple protocol, is a real time payments and settlements system. It also operates as a currency exchange with its native currency known as XRP, and boldly claims to enable ‘secure, instant and nearly free global financial transactions of any size with no chargebacks.’
The eToro team has put together an infographic to help simplify this seemingly complicated financial asset:
Much like the Bitcoin software and other blockchain technologies, Ripple is built on a distributed open-source protocol and consensus ledger where users in the system agree and confirm transactions. And like a number of competitors to Bitcoin, Ripple has arguably done a better job of creating a platform that works much faster than Bitcoin and executes transactions at very low cost.
If it works as well as they claim, the benefits to companies who adopt Ripple are clear. They can generate new revenue opportunities, enjoy lower processing costs and ultimately deliver better overall customer experiences through their payment processes.
The beginnings of Ripple actually pre-date Bitcoin and blockchain in many respects. Back in 2004, developer Ryan Fugger had the vision that he wanted to create a decentralized monetary system, one that relied solely on individual users and communities and cut out the middlemen and governmental authoritarians.
He created RipplePay, a financial service that intended to provide secure payment options in an online community. It was the nucleus of Ripple. Over the years Fugger continually refined and expanded his concept, working with a range of other digital payment entrepreneurs and developers.
Ripple itself, and as we know it today, first came to light in 2012. The effect ever since has very much been true to its name with a rapidly increasing number of technology enthusiasts and crypto traders keen to understand its potential implementations and unique benefits over other digital currency platforms and operating structures.
It is now undoubtedly one of the biggest cryptocurrencies in the world and is actively used by a range of well-known financial businesses, including the likes of UniCredit, UBS and Santander. The Ripple protocol has excited the major banks and payment networks with its settlement infrastructure and advanced technology, especially the low cost and security it offers, all on a major scale.
That said, we must remember that this is still very early days in the grand scheme of things. Yes, there are household brand names actively using Ripple but they are doing so in a controlled manner. And there are plenty more big financial houses and commerce giants yet to fully commit, still assessing their options from the touchlines.
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