Ripple is a cryptocurrency, operating on an open source network and a decentralized platform. It was born in 2013 in San Francisco, within Ripple Labs, where it continues to be developed. The term Ripple also means the network at the base of the cryptocurrency. At the end of the year 2017 it reaches the maximum share capitalization value in its history, exceeding 100 billion dollars.
Almost twelve months later, today Ripple is the second digital currency behind Bitcoin with the highest market cap, although the latter suffered a sharp contraction (less than 20 billion dollars). The founders of Ripple are Jed McCaleb and Chris Larsen. With the creation of the cryptocurrency and the Ripple network, McCaleb and Larsen wanted to introduce a new subject in the cryptomony sector that could eliminate the problems in Bitcoin.
What is Ripple
As is known, Ripple is a cryptocurrency. However, the most interesting aspect of Ripple is its network and the elements that compose it. In total there are three: the digital currency (XRP), the stock exchange and a network of payments. Two other fundamental elements of the cryptocurrency in question are Ripple Consensus and Ripple Consensus Ledger. The first is the algorithm that governs all the transitions that take place in the network, the second instead the register where the latter are stored and stored. Those who join the Ripple network are guaranteed the ability to transfer money in different currencies.
When referring to the technology behind the cryptocurrency of McCaleb and Larsen, it is also necessary to mention transaction cryptography, a factor that distinguishes Ripple's monetary network. Another point to be taken into consideration is the reduction of intermediation costs, the same that people are forced to pay to the banks during the withdrawal and transfer of money from one current account to another.
How Ripple works
The Ripple network relies - as mentioned - on the currency of the XRPs, a network of payments and a stock exchange. Its operation is relatively simple if explained in words. To understand it, however, it is necessary to introduce another element that has not yet been taken into consideration: the IOU credits (word indicating I owe you, which literally means "I am indebted to you"). These credits, within the Ripple network, represent only currencies (dollar, euro, yen etc.).
Once they are sent or received, the IOU credits undergo the conversion process into real money in the Ripple gateways. When it comes to explaining how Ripple works, it is important to underline how the only allowed currency in the network is XRP, the digital asset of the Ripple cryptocurrency, which is also the unit of measurement at the basis of the exchange of credits called IOU. The transitions that take place in the network created and developed by Chris Larsen and Jed McCaleb have considerable advantages, which can be summarized in three crucial aspects: security (use of cryptography), immediacy, maximum distribution.
Difference between Ripple and Bitcoin cryptocurrencies
Ripple and Bitcoin are born as two different projects and this is the reason why the differences between the two cryptocurrencies are numerous. The main feature that differentiates Ripple from Bitcoin is its financial nature. At the time of the creation of Ripple, the founders Larsen and McCaleb looked with great interest to a possible partnership with banking and financial institutions.
Any bank interested in the technology proposed by Ripple guarantees a speed that has no equal in the transition operations that take place within the networks of other cryptocurrencies. In this regard, the gap that Bitcoin accuses against Ripple is considerable (10 minutes against 2-5 seconds). Not only does the cryptomonet of Chris Larsen and Jed McCaleb guarantee an immediacy in transitions unattainable for Bitcoin but also allows the traceability of any currency (Bitcoin was designed to track only the movements of its digital currency, the BTCs).
