What Is Ripple? Everything You Need To Know (part one)
The first thing to know is that Ripple is both a platform and a currency. The Ripple platform is an open source protocol which is designed to allow fast and cheap transactions.
Unlike Bitcoin that was never intended to be a simple payment machine, Ripple is definitely going to rule all the international transactions worldwide. Pretty ambitious, but who knows? Maybe currency exchanges will disappear in a few years as Blockbuster stores did.
The platform has its own currency (XRP) but also allows everybody to use the platform to create their own via RippleNet.
RippleNet is a network of institutional payment-providers such as banks and money services businesses that use solutions developed by Ripple to provide a friction-free experience to send money globally.
Let’s give an example: Firstly, Mr Hay lives in Lagos and has a chocolate box he doesn’t need. He is very interested to see Wizkid’s show but doesn’t have a ticket. Secondly, Ms Bee lives in Jos and has an antique map she would like to give away for a box of chocolate. Lastly, we have Mr Sea who lives in Accra and is looking very much for an antique map, and he has a ticket for Wizkid’s show in Lagos.
In our current system, these people would probably never find each other and remain with their ‘not valuable’ valuables.
But in Ripple world, they could say: “Hey, I have chocolate, I want Wizkid” and the system will look for a shortest and cheapest combination to make it happen.
Moreover, the platform allows to make payments in any currency including Bitcoin and have a minimal internal transaction commission of $0.00001. The only reason it’s not free is to prevent DDoS attacks.
XRP is a token used for representing the transfer of value across the Ripple Network. The main purpose of XRP is to be a mediator for other – both cryptocurrencies and fiat – exchanges. The best way to describe XRP is ‘Joker’. Not the creepy Batman enemy, but the card that can be any other card. If you want to exchange dollars to euro, it can be dollar with dollars and euro with euros to minimize the commission. As highlighted above, the transaction cost on Ripple is $0.00001.
To be continued in next post.