What is the Ripple cryptocurrency (XRP)?

XRP is the cryptocurrency or native digital asset of the XRP Ledger, a decentralized blockchain that was born as a solution aimed at allowing banks and financial entities of all kinds to use the power of blockchain technology to improve their cross-border transaction systems.

Atime you know what the company is ripplelabs and protocol We will talk in detail about the characteristics of its token, the XRP. The XRP cryptocurrency (by its market identifier) is a cryptocurrency. The bases of its creation have been very different from other traditional cryptocurrencies.

XRP cryptocurrency is known as banks' cryptocurrency. The truth is that this description is perfect for her. The XRP Ledger it is intended to be a complement to the current banking system, where it helps international transfers to transform from fiat money to gold. The goal behind its design was to make such transactions faster and cheaper.

XRP is a different cryptocurrency than Bitcoin. But first of all, let's understand a little more about the currency that many know as Ripple.

XRP is a cryptocurrency that uses its own consensus protocol. It seeks to be used to make cross-border payments almost instantly. It is a currency that some banks and financial institutions seek to adopt as a tool in their processes. Another of the characteristics of XRP is that it is designed to make it possible to connect different payment systems. This allows you to move money in different denominations quickly.

Now let's know a little more about this cryptocurrency and its striking features.

Project beginnings

The Ripple protocol was created in 2004 as a working prototype. Although its true story begins in 2013, when the creator of the network E Donkey, made an invitation to a group of top-tier investors to invest in the company Ripple Labs, based in California, United States.

The founder of the Ripple company was Ryan fugger, whose intention was to develop an exchange system that was decentralized. And that it allowed its users effective empowerment over their own resources. In 2011, the founder of EDonkey, Jed McCaleb He hired Chris Larsen and they began to develop an idea of ​​a cryptocurrency whose transactions were verified in consensus by the network. Later in 2012, Fugger was approached with the idea of ​​this cryptocurrency, and after several discussions, Fugger divested the company. Leaving McCaleb and Larsen as the founders of the corporation the OPENCOM.

Here begins the development of the Ripple protocol and its payment and exchange network. In 2013, the OpenCoin corporation changed its name to Ripple Labs Inc, and this year it officially launched the cryptocurrency. Later in 2015 he made another change; leaving the company with the name of Ripple, as it is currently known.

In 2016, Ripple was licensed as a virtual currency by the New York State Department of Financial Services, and in 2017 announced that several corporations and banking institutions had joined its project. Among them, the Spanish banking giant BBVA.

Thus, transactions only take about 4 seconds to complete, thus becoming a simple and fast cross-border network.

How does XRP work?

Quite the contrary of Bitcoin and other cryptocurrencies, XRP does not operate under blockchain technology as such. Instead, it uses DLT (Distributed Ledger) technology along with its own consensus protocol. The name of this protocol is Ripple Protocol Consensus Algorithm (RPCA). In this way, RippleNet has special servers in charge of validating transactions and XRP tokens.

These servers do not offer a reward like the case of Bitcoin, but rather it is a network managed by independent servers. As of today, Ripple owns 5,75 billion XRP.

On the other hand, since its launch XRP has a "premine" for a total of 100 billion XRP tokens. The most curious thing about this "premined" is that XRP is not mined. In the Escrow (trust deposit) there is 46.500 billion XRP. Every 1st of the month, 1.000 are unlocked and sent to Ripple. Ripple decides how many to keep and returns the rest. It uses them as the main source of financing. Escrow was born to give transparency to the system and prevent most of the XRP from being held by the company. This system also ensures that the XRP that is not used is returned to the guarantee deposit.

Knowing the Ripple Protocol Consensus Algorithm (RPCA)

El consensus protocol which makes XRP work, is known as the Ripple Protocol Consensus Algorithm, or RPCA. The RPCA was a protocol designed by David Schwartz, Noah Youngs, and Arthur Britto in 2014. . The role of RPCA is to offer the RippleNet network and XRP a protocol with a certain capacity of Byzantine Fault Tolerance (BFT). To achieve this, RPCA works in a series of rounds that we will describe:

1. Initially, each server takes all transactions as valid before beginning the consensus process.
2. Next, each server gathers a series of candidate transactions from all the servers and votes on their veracity.
3. Transactions that receive more than the minimum percentage of “YES” votes are carried over to the next item. While transactions that do not receive enough votes are discarded or will be included in the candidate set for the start of the consensus process in the next round.
4. The consensus round requires a minimum percentage of 80% of the agreement of the servers on a transaction. All transactions that meet this requirement apply to the ledger.

RippleLabs partnership with banks

RippleLabs has entered into alliances with several of the world's leading major banks. Among them are BBVA, Santander, Axis Bank, YesBank, Westpac, Union Credit, NBAD, UBS e Itaú. We can also review the association it has with the Federal Bank of India, which is one of the largest in this Asian country, and also an important financial center. All of these banks have decided to use Ripple's technology to make cross-border payments. Where they can relate to the remittance market they manage.

Another important Ripple alliance is with the SBI Financial Group from Japan, with which it has implemented a payment application called MoneyTap. Which is already licensed by Japanese financial regulators for use. In the same way, the network of banks of reisebank from Germany, started testing the RippleNet network application. With which transfers can be made between banks in the network itself and others located abroad. These tests have generated a fairly reasonable degree of acceptance, since they allow transfers to be made in a fairly short average time.

On the other hand, the XRP cryptocurrency is the only one, for now, compatible within the universal payment network Corda Settler, Developed by the company R3. In turn, this network is the same one that is being explored by the company SWIFT, the same system that banks currently use to make cross-border shipments. So, we can realize the acceptance in the financial market that this cryptocurrency and its multiple applications have had.

XRP Characteristics

1. The original design of XRP allows it to operate as a efficient and safe daily payment system. So your transactions are done much faster and cheaper compared to Bitcoin.
2. It is for institutional, business and private use. Anyone, in short, can use XRP.
3. XRP operations can be processed and validated approximately every 4 seconds.
4. Owns better Scalability than some cryptocurrencies. It can process about 1500 transactions per second.
5. The XRP coin has the ability to be exchanged to any cryptocurrency, fiat currency or value, like gold, with a unified minimum commission. So Ripple operates as a mechanism that will unite the different currencies in use globally.
6. All XRP coins were created from the start and they already exist. So XRP mining is something that cannot be done. If necessary, Ripple Labs can increase the issuance of tokens at will.
7. The more banks use the Ripple protocol, the higher the value of XRP will be.
8. RippleLabs owns 5,8% of the coins currently existing.

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