“Ripple”, the company
Ripple is a San Francisco based company started by Chris Larsen and Jed McCaleb in 2012. The company is best known for developing the Ripple Payment Protocol which is a ‘real-time gross settlement system’ network. This protocol is also known as XRP or Ripple’s XRP. This protocol is built upon native cryptocurrency (a medium that uses the internet as a way of transactions in a secure way) and distributed open source protocol.
Ripple’s XRP is a native currency which is only divisible to only 6 decimal places. The unit 1 drop is the smallest drop and is equal to 1 XRP. Initially, Ripple only created 100 billion XRPs and decided to create no more according to their protocols. Out of 100 billion, only 20 billion XRPs were reserved or possessed by the creators. Currently, XRP is a scarce asset. Therefore the available supply is decreasing.
— Ripple (@Ripple) December 8, 2017
So how is it fast and secure?
Cryptocurrency transactions are either On-Ledger or Off-Ledger transactions. On-ledger transactions are those which are formed on the basis of blockchain revolution. This means that a person can send a currency unit to any other person as a peer-to-peer directly to other person’s wallet. This transaction is called On-ledger transaction. These transactions are slow as they take most of the time and use most of the internet transactions.
Off-ledger transactions are such where the transactions are grouped before being sent into batches. Therefore these are fast and comparatively more secure as this uses fewer internet resources. The XRP ledger has an Off-ledger or a common shared distributed ledger. This is a distributed database storing information for all ripple accounts. This is why each Ripple’s XRP as a high TPS rate and is considered as one of the easiest rivals of any other competitor.
Ripple’s consensus algorithm, the ripple’s protocol, is free and available as an open-source on Github. The ripple’s protocol is also known as Byzantine Consensus Algorithm which checks if a transaction is legitimate. However, unlike other cryptocurrencies, the XRP does not require mining because of this algorithm. This is why the ripple protocol results in a very fast speed that the confirmation time does not require currency mining.
Banks use Ripple’s RippleNet to do the cross-border transactions. These transactions are in real-time and can be tracked end to end (native nature of cryptocurrencies).
While cryptocurrency is not people’s choice but many banks and financial institutions are still looking for some blockchain or cryptocurrency based solution to increase their transaction process efficiency and make it better. The XRP, in this sense, has the ability to transform the transaction system on a global level.