How Ripple is perceived globally

Ripple is a real-time funds transfer system, a network for exchanging currencies and sending remittances, created in 2012 by Ripple Labs, OpenCoin at the time

by Lorenzo Ciotti
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How Ripple is perceived globally

Ripple is a real-time funds transfer system, a network for exchanging currencies and sending remittances, created in 2012 by Ripple Labs, OpenCoin at the time. The system name, in full, is Ripple Transaction Protocol, in abbreviation RTXP.

XRP is the native currency of the Ripple network and exists only in these systems. XRP is divisible based on 6 decimal places: therefore, the smallest divisional unit, drop, is worth 1 millionth of 1 XRP. 100 billion XRP was created at birth, with no further creation of base currency, as per the rules of the protocol.

The system was designed as a scarce asset which decreases its availability. It is not dependent on third parties for redemption, it is the only currency in the Ripple network that does not carry counterparty risk, and it is the only digital native asset.

The other currencies of the Ripple network are debt instruments. Users of the Ripple network are not required to use XRP as a medium of exchange and storage of value. However, every Ripple profile is required to have a small reserve of 10 XRP.

The purpose of this request is discussed in the anti-spam section of the Ripple protocol.

How Ripple is perceived globally

As the Federal Reserve Bank of Boston wrote, the adoption of distributed networks like Ripple could help the banking industry achieve faster processing and improve the efficiency of global payments and mail banking services.

In 2013, Ken Kurson told Esquire about Ripple as a payment network that big financial services brands should treat Ripple like record companies have treated Napster. In August 2015, Ripple was awarded the Technology Pioneer Award by the World Economic Forum.

The New York Times-owned Dealbook site noted in 2014 that Ripple is capturing what has proven hard to achieve for virtual currencies: the participation of mainstream players in the financial system. Since its debut, the Ripple protocol has had the attention of both the financial and mainstream press.

Ripple has been featured in industry articles by The Nielsen Company, Bank of England Quarterly Bulletin, NACHA and KPMG, with many articles examining Ripple's impact on the internationalization of the banking sector. In April 2015, American Banker argued that from a banking perspective, distributed ledgers like the Ripple system have several advantages over cryptocurrencies like bitcoin, including security.

It is based on an open source internet protocol, where transactions are recorded on a distributed ledger. The aim is to make possible free and global financial transactions of any amount without chargebacks, the system uses tokens that represent a fiat currency, cryptocurrency, commodities or any other unit of value, such as kilometers traveled in frequent flyer programs or minutes of mobile telephony.

Ripple is built around a shared, public database that uses a consensus process for verifying payments in a distributed process. The network is decentralized and can operate without the Ripple company. Validators include companies, internet service providers, and the Massachusetts Institute of Technology.

Adopted by companies such as UniCredit, UBS and Banco Santander, Ripple is starting to be used as a technological infrastructure by banks and payment networks. American Banker explains that from the perspective of banks, distributed ledgers like Ripple's system have major advantages over cryptocurrencies like bitcoin, including price and security.

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