CryptoZiller Ripple Dashboard
What is Ripple?
Ripple is a digital transactional protocol that uses a distributed ledger system to independently validate transactions and allow for a seamless transfer of money in any form. Ripple is used in the real-time gross settlement (RTGS), remittance and currency exchange networks.
Ripple is built on a shared database system, which means it relies on a consensus process between those validating servers to ensure integrity. Those validating servers are the participants of the network and can include banks, organizations or individuals.
Transactions in Ripple protocol are facilitated using XRP tokens, same as Ether for Ethereum blockchain. This enables transactions to be completed almost instantly and a direct transfer of money between two parties can be facilitated from anywhere across the globe. Ripple network aims to avoid the fees and wait times that are usually common in traditional banking and cryptocurrency transactions.
How is Ripple different from Bitcoin?
Because of validating servers and consensus mechanism, you might think that Ripple is blockchain-based technology. Well, it's not. Unlike Bitcoin that leverages blockchain to create and validate online cryptocurrency transactions, Ripple uses a HashTree to summarize the data into a single value that is compared across its validating servers to provide consensus.
Ripple has the potential to handle one thousand five hundred transactions per second and fifty thousand Visa level transactions per second. In comparison, Bitcoin can handle three to seven transactions per second and Ethereum twenty transactions per second.
XRP is Ripple's token. It isn't mined like Bitcoin, Ether, Litecoin or many other cryptocurrencies. Instead, it is issued at its inception, just like the way a company issues stocks when it incorporates.
What is XRP and what is it used for?
XRP is the digital asset that is used to facilitate global payments in the Ripple network. XRP transfers are effectively immediate, which means no typical confirmation is required. In fact, Ripple's XRP can settle a payment in 3.6 seconds, and have it available and ready to be spent thereafter.
When Ripple was created, 100 billion XRP tokens were issued at inception. This number is maintained with no mining and the company says this is the total number of XRP tokens that there will ever be.
What is Ripple's 55 Billion XRP Escrow?
Ripple's XRP Escrows refers to the 55 billion XRP tokens locked into a series of escrow ledgers to boost predictability of the XRP supply. The release of these XRP escrows is enforced by consensus through ledger mechanics.
XRP escrows are made up of independent on ledger escrows that release a total of one billion XRP contracts each, over 55 months starting with january 2018. As each contract expires, the XRP will become available for Ripple's use and whatever is unused is returned to the back of escrow rotation. This in effect, regulates the amount of new XRP that can be brought into circulation.
The XRP ledger escrow system can be utilized in a variety of ways including:
- Locking funds on the ledger for allotted amount of time subject to release when certain conditions are met
- Providing a uniform and reliable way to support hosted accounts where an agent, especially Exchanges, perform a transaction on behalf of its customers
- Facilitating higher-value, on-ledger and cross-ledger atomic payments using Interledger Protocol
- Providing payment channels for lower-value, off-ledger payments and micro-payments
Ripple's 55 Billion XRP Escrow aims at building XRP liquidity and a healthy and trusted global payment market.
Who can use Ripple?
While it can be used by person to person, Ripple is primarily built for the enterprise. It is purposefully built to move lots of money around the world seamlessly and as rapidly as possible, which perhaps explains why it is popular with banks and payment providers.
In actuality, Ripple's value proposition is not in XRP tokens but the Ripple network itself and its ability to transfer assets quickly around the world. Banks can leverage Ripple software to shift money between different foreign currencies seamlessly and faster.
Why the all the hype about Ripple?
Ripple's price has significantly increased since the beginning of this year, which puts it in a good position in the market. This boost in XPR's price is attributed partly to the availability of XRP in more exchange platforms and partly to the widespread adoption by financial institutions.
Although Ripple's XRP is not mined like in Bitcoin, XRP transfers are way faster. Also, XRP's price is influenced by internal changes to XRP ledger and general cryptocurrency trends.