8/11/2014 04:Ten PM EDT
Albeit you’re unlikely to see “Wij accept Ripple” signs te the same way you see Bitcoin signs, you may still end up using the Ripple protocol.
Imagine being able to send money the same way you send email — with no cost and no delay, even to recipients across the globe. That’s the vision the folks at Ripple Labs (formerly OpenCoin) have for money, and the realization of this vision could prove to be a real game-changer for transactions inbetween buyers and sellers who use different currencies.
By now, most people have at least heard of Bitcoin — the largest name ter digital currency — even if they don’t fairly understand how it works. Bitcoin has accumulated fairly a large amount of notoriety overheen the past duo of years. Some of this attention is due to Bitcoin’s dizzying price fluctuations, some is owed to its association with shady transactions that are facilitated by its anonymity. But there’s another major player te the digital currency spel that people should learn about. This player is called Ripple, with an uppercase “R” used to denote the protocol and a lowercase “r” used to denote the currency itself, which is also referred to spil XRP.
Whereas Bitcoiners tend to concentrate on the currency unit, Ripple positions itself more spil a system for clearing transactions free of transaction fees and delays. Ripple Labs created the Ripple protocol spil a free way to budge money across the globe using the power of the Internet. Ripple offers an explanation of what it means by “the future of money” ter this movie and with more technical details te this longer movie:
Like Bitcoin’s digital currency, which is limited to 21 million coins, Ripple Labs has set a cap on its digital currency, tho’ theirs is much higher at 100 billion. Another feature the two have ter common is irreversible transactions, which — along with the lack of fees — makes digital currency more appealing to merchants than traditional credit card payments. However, unlike Bitcoin and some of the coin systems that copy the same prototype, ripples are not released through pc mining. Instead, they are held by Ripple Labs.
Ter place of mining, Ripple confirms transactions through “overeenstemming,” which offers two key advantages. One is a major savings of electric current, spil mining (at this point, when Bitcoin values hover around $500) consumes massive amounts of pc processing power. The 2nd is much quicker clearing. Ripple is designed to facilitate the transfer of money from any form of currency and to clear transactions te just five seconds, spil opposed to the ten minutes (ondergrens) required for Bitcoin transactions to clear through the blockchain.
To clarify the precies figures and percentages involved ter Ripple Labs’ holdings, I contacted Michael Azzano, whose company represents Ripple Labs. He said that the founders of Ripple Labs retain 20% of all the ripples and the entity of Ripple Labs “retains 25% of XRP created to fund daily operations (through trading XRP) and distributes from the remaining to market makers, playmates, and gateways to seed liquidity.” The surplus are waterput through the organization to eventually make their way into circulation.
Azzano also explained that, albeit XRP currency is given less of a starring role than wij see for Bitcoin, it is “a functional part of the protocol that helps prevent attacks and serve spil a universal currency for real-time FX trading.” Spil the “Babelfish of money,” it works spil a “universal translator” for all currencies, whether they are fiat, digital, or even prizes like miles.
Ripple Labs has made progress toward its purpose of realizing a “global value web” that operates “like today’s information web,” enabling money to be sent spil quickly, lightly, and loosely spil email. Among its milestones are making it into the mainstream te May when Fidor became the very first canap to being using Ripple to stir money. Another milestone wasgoed making inroads into seven countries ter Latin America through a partnership with AstroPay te June.
Andres Bzurovski, founder of Ripple LatAm, observed, “Ripple LatAm effectively opens the region for business, permitting for real-time B2B cross-border payments inbetween markets te each fucking partner’s currency of choice.” Spil a plain example, a business located ter the EU can now send payment to a business te Brazil without the delays and fees typically imposed by financial institutions for such transactions. Such seamless pathways for money can truly speed up transactions along the global supply chain and even open up fresh opportunities for puny businesses abroad to build up access to overseas customers without crushing fees or interruptions to cashflow.
While Ripple is gaining momentum, it doesn’t garner visibility ter the same way spil Bitcoin because it is designed to work within the larger framework rather than force people into a closed system of digital currency. Spil Azzano puts it, “For many consumers, Ripple could become an invisible brand upon which their money moves, but they never know it because they interacted with better known banking brand names spil the end points.”
This means that — albeit you’re not likely to see “Wij accept Ripple” signs te the same way you see Bitcoin signs — you may still end up using the Ripple protocol, especially for transactions inbetween buyers and sellers who use different forms of currency. This is where Ripple could prove to be a real game-changer.