Ripple is a real-time gross settlement protocol, currency exchange and money transfer system. The protocol supports tokens representing fiat currencies, cryptocurrencies, commodities and/or other assets. Ripple was created as an alternative settlement method for the banking system, not as an alternative to fiat money and the traditional banking system. Ripple Labs’ three core products – xCurrent, xRapid and xVia – form an ecosystem driven by the RippleNet network of banks and financial institutions. Ripple’s main customers are banks using the xCurrent software solution to make cross-border payments with real-time tracking of transfers. Regular users also can use Ripple’s digital currency for settlements.Cooperate
Liquidity Problem Solution
The xRapid payment platform solves the liquidity problem faced by international banks - they have to keep money in different local currencies to make money transfers. xRapid gives them the ability to free up this capital using XRP as an intermediary. The main currency of the bank is exchanged for XRP, and after successful processing of the transaction, the XRP is exchanged for the local currency.
Instant Payments Worldwide
xVia is an API under development that ties together parts of the Ripple ecosystem. With help, companies will be able to connect with RippleNet and make instant payments on different networks around the world. xVia does not need to be installed. It functions as a browser extension and can be integrated into existing software.
Instant Cross-Border Payments in the Banking Sector
The xCurrent platform allows banks to make instant cross-border payments in highly liquid fiat pairs (USD / EUR, USD / JPY, etc.). xCurrent provides an automated process to ensure that all payments are tracked and accounted for.
In January 2021, it became known that Ripple development team was in talks with central banks to use the XRP Ledger as the basis for national digital currencies (CBDC). This was announced by the general manager of RippleNet, Ashish Birla.
In March 2021, Ripple announced pilot testing of a private version of the public XRP ledger designed to launch central bank digital currencies (CBDCs). Ripple believes most CBDCs will be based on distributed ledger technology. Central banks can use existing blockchains to quickly launch digital currencies, the company’s experts say. But, in their opinion, public registries are unlikely to be suitable for this. The company is confident that CBDC private ledger will provide cost-effective, reliable, near-instant transactions in the volumes required by central banks. The throughput is announced at tens of thousands of TPS at the initial stage.
In addition to using XRP Ledger technology, the firm’s solution supports the RippleNet network and the Interledger suite of protocols to provide “ultra-high bandwidth for use cases such as micropayments.”
The direct Ripple developers are American programmer Jed McCaleb, cryptographer David Schwartz and programmer-encoder Arthur Britto. The author of the basic concept is the Canadian programmer Ryan Fugger. In 2004, Fugger, having familiarized himself with the work of the Vancouver branch of the local exchange trading system, became interested in the idea of creating a decentralized payment system. In 2005, he launched the first iteration of such a system, RipplePay.com, which was not widely adopted.
In 2011, Fugger transferred one of the top management positions in his company to Jed McCaleb. He invited David Schwartz to the project and hired Arthur Britto as development manager. In 2012, McCaleb created OpenCoin. American entrepreneur Chris Larsen became its CEO, while Fugger left the project. In 2013, the company changed its name to Ripple Labs, Inc. The current CEO of the company, who is responsible for the outsource Ripple development and the accomplishment of other tasks, is economist and entrepreneur Brad Garlinghouse. He succeeded Chris Larsen in this position.
XRP is the digital currency of the Ripple network that only exists in the Ripple system. 1 XRP is subdivided into a million units called “drops.”
The entire limited supply of XRP tokens (100 billion) has been pre-mined. Quasi-mining of the coin is available to users. They can participate in scientific research supported by Ripple Labs, perform calculations or perform other actions using computational algorithms, and receive XRP tokens as a reward. Ripple owns 65% of all tokens; the remaining 35% are issued on the market. Users of the Ripple network are not required to use XRP. However, a 20 XRP stock is required for each Ripple account.
Ripple does not use blockchain technology. Transactions on the network are confirmed through a consensus process known as the Ripple Protocol Consensus Algorithm (RPCA).
As a part of this process, most servers, also referred to as nodes that are included in the Unique Node List, must agree that the transaction is valid and that the sender has sufficient funds to complete the transaction. RPCA is part of the Ripple Transaction Protocol (RTXP) payment protocol, developed in 2012 by OpenCoin.
XRP acts as a payment bridge that is used when a direct exchange of assets is not available – for example, when dealing with two rarely traded assets.
On the Ripple network, XRP tokens are freely traded for fiat money or cryptocurrencies. However, Ripple views the token primarily as a means of payment and a tool in exchange transactions, and not as an alternative digital currency.
Ripple's architecture resembles that of the global payment system SWIFT, but instead of a central processor, Ripple uses its own global network, RippleNet.
A transaction on the Ripple network is a registry change proposed by any server and is distributed throughout the network of active Ripple nodes (servers). Having received or formed a transaction, the servers automatically come to a consensus on which transactions should be added to the ledger and which should be excluded.