The Guide: Ripple and XRP (5)

Details on Xcurrent investors must know

Ripple xCurrent

Another tool on the Ripplenetwork is the xcurrent. In this article we will discuss in detail what the xcurrent is and how it works

XCurrent is Ripple’s enterprise solution that is responsible for facilitating the instantaneous settlement and end-to-end tracking of cross-border payments between RippleNet members. There are four key components that constitute Ripple’s xCurrent:

1. Messenger: This is the application programming interface (API), bidirectional messaging element of Ripple xCurrent. The purpose of this component is to establish a link between transacting banks, in order to connect the beneficiary bank’s Messenger to exchange information such as: ‘Know Your Customer’ (KYC), risk, fees, FX rates and payment details. Every end-to-end payment that is made using xCurrent possesses a payment ID that can be used to determine the status of the payment at any point during execution which makes it especially useful in providing effective troubleshooting for failed or delayed payments.

2. Validator: The function of the validator component in Ripple xCurrent is to cryptographically confirm the success or failure of a payment. This component serves as a single source of truth for transacting parties, whilst also making sure to preserve the privacy of bank customers.

3. ILP Ledger: The ILP ledger, also known as ‘The Interledger Protocol’, is an open and neutral protocol that enables interoperation between different ledgers and payment networks. This xCurrent feature is used to monitor the credits, debits and liquidity across various transacting parties. ILP enables transacting parties to settle funds atomically, meaning that transactions can settle instantly or not at all. Furthermore, ILP also allows funds to be settled instantaneously.

4. FX Ticker – This component of xCurrent promotes exchange between ILP Ledgers by allowing liquidity providers to post FX rates. The FX Ticker provides the rate of exchange between any pair of ledgers that it is configured to. It also keeps track of the account, currency and authentication credentials for each configured ILP Ledger. During a transaction, the FX Ticker will coordinate transfers on ILP Ledgers for settlement, ensure the validity of an FX quote, and also transfer the payment amount to the beneficiary bank’s ILP ledger.

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