Ripple is a popular name in the tech industry. And Ripple blockchain has created a lot of buzzes. We all know how blockchain is transforming the industry as we know it. But what is Ripple a blockchain technology? What is it, and how does it work?
Ripple is
both a platform and a currency. Meaning, it is a technology that acts as both a
cryptocurrency and a digital payment network for financial transactions. The
Ripple platform is an open-source protocol that is designed to allow fast and
cheap transactions.
It’s a
product of Ripple Labs and is gaining popularity because of its innovative
method of performing currency exchange and payment settlements. The cryptocurrency
of Ripple is XRP. And this platform has over a hundred organizations as its
customers all over the globe.
What is Ripple used for
·
Low
commission currency exchange. There are many currencies that can’t be directly
converted to each other. So, banks need to use the US dollar as a mediator. So,
there is a double commission: converting currency A to USD and USD to currency
B. Ripple is a mediator too, but much cheaper than USD.
·
Fast
international transactions. Average transaction time is 4 seconds. Compare it
to hour or more for Bitcoin and a few days for regular banking systems.
·
Payment
ecosystem. User can basically issue his own currency for fast and cheap
transaction. For example, one can create a currency to buy and see vintage
vinyls or action figures between the collectors.
Which banks support Ripple?
·
Santander
·
Axis
Bank
·
Yes
Bank
·
Westpac
·
Union
Credit
·
NBAD
·
UBS
Ripple is
not decentralized like other conventional blockchain networks. A strong network
of validating servers and a ledger secure this system. The internal ledger of
Ripple guarantees customer transactions. The parent company, Ripple Labs,
handles the release of coins.
But the best
thing about Ripple is, its transactions aren’t limited to its cryptocurrency,
XRP. You can transfer any commodity, including gold, through Ripple as long as
you’re able to find a facilitator who can make its transactions.
Ripple v Bitcoin
While
Bitcoin is a digital currency intended as a means of payment for goods and
services, Ripple is a payment settling, currency exchange, and remittance
system intended for banks and payment networks. The idea is to provide a system
for direct transfer of assets (e.g. money, gold, etc.) that settles in almost
real-time and is a cheaper, more transparent, and secure alternative to
transfer systems used by banks today, such as the SWIFT payment system.
Bitcoin is
based on blockchain technology, while Ripple doesn't use blockchain but uses a
distributed consensus ledger using a network of validating servers and crypto
tokens called XRP (sometimes referred to as Ripples).
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