Ripple is an online, decentralized currency exchange, real-time gross settlement system and a remittance network Ripple is an alternative to the current troublesome and expensive banking system which works across the borders. The company was determined to get rid of the notorious money exchange rules and the huge transaction fees. Processing delays, lack of transparency and the most ridiculous of them all, higher currency exchange rates are eliminated by Ripple.
Ripple payment protocol focuses on bringing together payments providers, digital assets exchange, corporates and financial institutions such as banks. Contrasting with other popular cryptocurrencies such as Ethereum and Bitcoin, Ripple has its goals clear. A basic infrastructure aimed at optimizing the world payments process.
In addition, Ripple has partnered with partnered with high profile companies such as Google. It also works with Gateway whose mandate is to facilitate customer deposits in several currencies such as Euros and US dollars.
Unlike other cryptocurrencies and payment networks, Ripple has a very different strategy which leaves them outstanding. Ripple’s technology facilitates payments using the existing financial systems. It therefore doesn’t compete with the existing financial institutions. They both operate with a symbiosis relationship. Due to Ripple’s support of multiple digital currencies, inclusive of fiat currencies, the members are not required to convert their local currencies into Ripples.
Sitting on top of the already existing bank technology, Ripple complies with privacy, risk and regulatory requirements. Payments via Ripple either go through or fail (Settlement Risk). This competitive advantage makes Ripple an efficient and effective payment network amidst the many payment platforms.
What is Ripple capable of?
There are no restrictions from a central authority since Ripple protocol is open source and its network’s shared ledger is open to the public. Any user can create a wallet or monitor network behavior; thus anyone can become a market maker. With this possible, there is reduced competition and increased uptake of the services which makes the network useful to everyone.
The concept behind Ripple Payments
a. A sender specifies an amount and a currency that the recipient should receive.
b. Ripple converts the sender’s currencies automatically. A user may have support of various currencies and thus Ripple will only convert the available currencies at the time of the payment. This is made possible by the integration of the distributed order books into the Ripple protocol.
c. Independent third parties provide liquidity in the order books because they act as market makers. Through the use of a pathfinding algorithm, Ripple’s users enjoy the lowest…