Ripple is an open-source, distributed payments system built on the same technology that powers Bitcoin. It has been launched to enable secure, instantly and nearly free global transactions of any size with no chargebacks.
The ledger uses the native cryptocurrency known as XRP. It connects all the major banks, payment providers and corporations via RippleNet to provide one frictionless experience to send money globally, instantly and with extremely low fees.
Here are 5 ways Ripple can help your business.
How it works
Ripple simplifies existing technology, which in turn helps reduce transaction costs. Ripple is a real-time gross settlement system (RTGS), Ripple’s currency exchange and remittance network. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol is built upon a distributed open-source Internet protocol, consensus ledger, and native cryptocurrency called XRP (ripples).
Released in 2012, Ripple purports to enable secure, instantly and nearly free global financial transactions of any size with no chargebacks. The ledger is based around an open-source Internet protocol, consensus ledger and native currency called ripples or XRP.
Who can use Ripple?
The broad use case of Ripple lies in its ability to make global transactions at a fraction of current costs. However, some specific use cases set it apart from other cryptocurrencies such as Bitcoin.
For example, cross-border remittances are one major area that banks are highly interested in. The World Bank estimates that $430 billion was sent by migrants to their home countries in 2016.
This is roughly three times higher than global foreign direct investment flows and about 30 times higher than international development aid. Remittances could offer an enormous opportunity for cost savings through real-time settlement across borders via a distributed ledger like Ripple.
Advantages of using Ripple
The Ripple network allows global transactions to be completed within seconds. This is unlike traditional fiat-based payment methods that might take days to complete. Another advantage of using Ripple over traditional methods is cost. While some banks charge transaction fees of 1% or more for using credit cards, Ripple has no fees.
There are also no limits on how much a user can transact per day or per month. Finally, there are no middlemen between parties on the Ripple network (as with credit cards), meaning users have more control over their funds at all times.
They can choose which other users they want to conduct business with. In short, anyone who wants to send money across borders should consider Ripple as an alternative method of doing so. They’ll save time and money in doing so.
Why Ripple Transaction Is Secure
You may have heard that Ripple is a distributed system. The servers that a single entity does not run process transactions. Instead, anyone can set up a server to validate transactions for an account.
If these servers disagree about which transactions should be considered valid, the network automatically resolves those disagreements.
When comparing it to other cryptocurrencies’ mining functions, where votes from miners determine what transactions are added to a block of data that is being processed as part of a ledger, Ripple uses consensus among its many servers to confirm transaction accuracy without relying on miners or mining at all.
Where to buy Ripple?
A common question from cryptocurrency newbies is Where to buy XRP? At present, users are required to convert their fiat currency or another cryptocurrency like Bitcoin into XRP in order to use its distributed ledger technology.
Luckily, there are multiple ways to do so. The best way is still debated among enthusiasts. Still, generally speaking, people first use one of a handful of exchanges that deal in fiat-to-XRP pairings-like Coinbase, Kraken, and Gemini-and then transfer their coins onto an exchange with XRP/BTC pairings like Bitstamp or Bittrex.
Final Thought
Ripple is one of many altcoins (alternative digital currencies) that have sprung up over recent years. While there are a handful of major players (bitcoin, Ethereum etc.), thousands of others with smaller market caps are worth looking into – especially in volatile times like these. One or two might surprise you as well.
