Understanding Ripple in plain text
What is ripple?
Ripple XRP is a digital asset for representing the transfer value across the Ripple network also known as the rippling net created and operated by us-based technology company Ripple Labs. The main goal for ripple is to create an internet of value and connect payment providers, banks, and digital asset exchanges to provide fast and cost-effective global money transfers. Just like the internet has its own HTTP rules, or protocol to transfer information.RippleNet uses a protocol, known as RTXP for moving money around the world. Through the use of RippleNet, there is no reason to pay a fortune and wait for days on transferring money globally. Unlike most cryptocurrencies that focus on the individual, Ripple Labs aims to serve banks and payment providers lower transaction costs and expedite settlements.
How Does it Work?
RippleNet is a network based on a set of rules known as the Ripple Transaction Protocol or RTXP which is relying on the ripple patented technology called the ripple protocol consensus algorithm or PCA in short. All the information of ripple accounts and XRP transactions are stored in a common shared ledger also known as the XRP ledger. The ledger is managed by a network of independent validating nodes that constantly compare their transaction records. Validators make sure every transaction sent through the network follows the RTXP rules. These nodes can belong to anyone from individuals to banks however ripple recommends its clients to use a list of identified trusted participants also known as unique node list or UNL.
How Transaction Validate?
Instead of using the blockchain mining concept just like bitcoin, the Ripple network uses a unique distributed consensus mechanism through a network of validators to validate transactions. The validators or nodes on the network are the authenticities of the transaction. This enables almost all confirmations without any central authority, which helps to keep XRP more decentralized, faster, and more reliable than any of its competitors.
Currencies sent through the Ripple network
Ripple offers two different types of currencies
1. IOUs -->IOUs are the token on the ripple network that can be stored on any Ripple wallet. Any participant on the Ripple network can issue an IOU, it represents something you owe actually an obligation to pay back something you got in real life.
2. XRP --->XRP is a currency issued by Ripple Labs to help transfer payments through the Ripple network. XRP is a form of payment and is considered a tradable asset by anyone on the network.
What are Ripple Products?
Ripple products like xRapid, xVia and xCurrent are offered to companies to optimize
their current solutions or transferring money around the world. For customers of a financial service using Ripple, this solution is transparent. If the bank switches to this technology, your bank accounts balance could be residing on the XRP ledger tomorrow.
Real-World Applications
The Ripple payment system is more popular among banks and payment providers. RippleNet has an association with more than 200 financial institutions based in more than 40 countries, allowing the ease of facilitation of cross-border payments. The Ripple network continues to grow among financial institutions, an area in which it is ahead of many of its competitors in the digital currency space.
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