Ripple is a real-time gross settlement system (RTGS), currency exchange and remittancenetwork created by the Ripple company.
Also called the Ripple Transaction Protocol(RTXP) or Ripple protocol,
it is built upon adistributed open source internet protocol, consensus ledger and native cryptocurrencyabbreviated as XRP (ripples).
Released in 2012, Ripple purports to enable “secure, instantly and nearly free global financial transactions of any size with no chargebacks.
It supports tokens representingfiat currency, cryptocurrency, commodity or any other unit of value such as frequent flier miles or mobile minutes.
At its core, Ripple is based around a shared and public database or ledger, which uses a consensus process that allows for payments, exchanges and remittance in a distributed process.
The predecessor to the Ripple payment protocol, Ripplepay, was first developed in 2004 by Ryan Fugger, a web developer inVancouver, British Columbia.
Fugger conceived of the idea after working on a local exchange trading system in Vancouver,
and his intent was to create a monetary system that was decentralized and could effectively allow individuals and communities to create their own money.
Fugger’s first iteration of this system, RipplePay.com, debuted in 2005 as a financial service to provide secure payment options to members of an online community via a global network.
This led to the conception of a new system byJed McCaleb of eDonkey network, which was designed and built by Arthur Britto and David Schwartz.
In May 2011, they began developing a digital currency system in which transactions were verified by consensus among members of the network,
rather than by the mining process used by bitcoin, which relies on blockchain ledgers.
This new version of the Ripple system was therefore designed to eliminate bitcoin’s reliance on centralized exchanges,
use less electricity than bitcoin, and perform transactions much more quickly than bitcoin.
Chris Larsen,who had previously founded the lending services companies E-Loan and Prosper,
joined the team in August 2012, and together McCaleb and Larsen approached Ryan Fugger with their digital currency idea.
After discussions with long-standing members of the Ripple community, Fugger handed over the reins.
In September 2012 the team co-founded the corporation OpenCoin,or OpenCoin Inc.
On June 13, 2016, Ripple obtained a virtual currency license from the New York State Department of Financial Services,
making it the fourth company with a BitLicense.
On August 19, 2016, SBI Ripple Asia announced the creation of a Japanese consortium of banks in a new network that will use Ripple’s technology for payments and settlement.
The consortium was officially launched on October 25, 2016 with 42 member banks.
As of July 2017, 61 Japanese banks had joined, representing over 80% of total banking assets in Japan.
On September 23, 2016, Ripple announced the creation of the first interbank group for global payments based on distributed financial technology.
As of April 2017, members of the network known as the Global Payments Steering Group (GPSG) are Bank of America Merrill Lynch, Canadian Imperial Bank of Commerce, Mitsubishi UFJ Financial Group, Royal Bank of Canada, Santander, Standard Chartered, UniCredit and Westpac Banking Corporation.
The group will “oversee the creation and maintenance of Ripple payment transaction rules, formalized standards for activity using Ripple,
and other actions to support the implementation of Ripple payment capabilities
According to Bitcoin Charts, ripples were trading at around 115 per $1 (US) on May 17, 2013. (In early April, the price wasabout 1,000 per $1, so the currency has appreciated.
In addition to giving Bitcoin more ways to connect with those using other forms of currency,
Ripple promises expedited transactions and increased stability.
As a distributed network, Ripple does not depend on a single company to manage and secure the transaction database.
Consequently, there is no waiting on block confirmations, and transaction confirmations can go through the network quickly.
Another advantage of using peer-to-peer is the absence of a “central target or point of failure in the system,” Ripple’s backers note
In many ways, yes. Like Bitcoin,
Ripple’s XRP unit is a digital form of currency based on mathematical formulae and has a limited number of units that can ultimately be mined.
Both forms of currency can be transferred from account to account (peer-to-peer, or P2P) without the need for any intervening third party.
And both provide digital security to guard against the possibility of counterfeit coins
Year to date,
Ripple’s XRP has seen its value jump more than 7,000% and its market cap increase by nearly 7,700%