What is Ripple?
Ripple is the name for both a digital currency (XRP) and an open payment network within which that currency is transferred. It is a distributed, open-source payments system that’s still in beta. The goal of the ripple system, according to its website, is to enable people to break free of the “walled gardens” of financial networks – ie, credit cards, banks, PayPal and other institutions that restrict access with fees, charges for currency exchanges and processing delays.What does Ripple do?
According to is OpenCoin, the company behind ripple, the currency addresses the need to keep money flowing freely. A company blog post titled “Ripple and the Purpose of Money” gives a brief history of money and its transportability, and points to the frustration of having banks and other institutions impede the transfer of funds with transaction fees and processing delays. The goal of Ripple, it says, is to build on the decentralized digital currency approach set by bitcoin and do “for money what the internet did for all other forms of information.”How would Ripple function like the internet?
Ripple’s chief cryptographer, David Schwartz, explains it like this:
“Payment systems today are where email was in the early ‘80s. Every provider built their own system for their customers and if people used different systems they couldn’t easily interact with each other. Ripple is designed to connect different payment systems together.”
Schwartz also anticipates the possibility of seeing “big companies lose their control over the flow of other people’s money just as they’ve lost control over the flow of information.”Who’s behind Ripple?
The company building the Ripple protocol, OpenCoin, was co-founded by CEO Chris Larsen and CTO Jed McCaleb. McCaleb is well-grounded in digital currency, coming from Mt. Gox, which currently handles the majority of the world’s bitcoin trades. Larsen previously co-founded and led the online financial company E-LOAN. Other developers on Ripple’s team also have a bitcoin background.
OpenCoin recently picked up a round of funding from Andreessen Horowitz, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and the Bitcoin Opportunity Fund.
(Note: OpenCoin is not to be confused with OpenCoin.org, which is developing an open-source version of an electronic cash system developed by David Chaum.)Is Ripple like Bitcoin?
In many ways, yes. Like Bitcoin, Ripple’s XRP unit is a digital form of currency based on mathematical formulae and has a limited number of units that can ultimately be mined. Both forms of currency can be transferred from account to account (peer-to-peer, or P2P) without the need for any intervening third party. And both provide digital security to guard against the possibility of counterfeit coins.Does that mean Ripple is a Bitcoin rival?
Ripple positions itself as a complement to, rather than a competitor with, Bitcoin. In fact, the site has a page dedicated to Ripple for bitcoiners.
The Ripple network is designed to allow the seamless transfer of any form of currency, whether dollars, euros, pounds, yen or bitcoins.
“Ripple will open up many more gateways for bitcoin users and easier ways to bridge bitcoin with the mainstream world of finance,” says Stephen Thomas, a senior developer for the ripple protocol and a bitcoin advocate.How would Ripple benefit bitcoin users?
In addition to giving Bitcoin more ways to connect with those using other forms of currency, Ripple promises expedited transactions and increased stability. As a distributed network, Ripple does not depend on a single company to manage and secure the transaction database. Consequently, there is no waiting on block confirmations, and transaction confirmations can go through the network quickly.
Another advantage of using peer-to-peer is the absence of a “central target or point of failure in the system,” Ripple’s backers note.How many Ripples will there be?
The company plans to ultimately create 100 billion ripples. Half of those are to be released for circulation, while the company plans to retain the other half.Why is Ripple described as “free(ish)” rather than free?
Ripple doesn’t collect transaction fees the way PayPal, banks and credit cards do. However, it does take “a small portion of a ripple (equivalent to ~1/1000th of a cent)” from each transaction. That amount is destroyed rather than retained. The deduction is meant as to safeguard against the system being swamped by any one individual who might try to put through millions of transactions at once.
Since Bitcoin in the "KING" of crypto-currency due to its high price compared to other currencies.
“The creation of Bitcoin has allowed purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution”.
Now to my main point about long term value of XRP Ripples & why i feel its going to be a success in the long term for investors, banks and people .
Some of this information you may have already come across & but when you put 2+2 together you can see things in a context providing a more complex but complete picture.
Ripple is recognized as “the world’s first open payment network”,
Ripple is currency agnostic; it supports any currency (USD, EUR, BTC, etc.) including its own native currency, XRP.
When a user wants to withdraw money from the Ripple network by redeeming a balance for cash, the gateway that originally issued the balance is responsible for redeeming it against the deposits it holds just like a conventional bank account.
In practice, many Ripple gateways may look very similar to traditional banks; but a gateway can be any business that provides access to the Ripple network. Gateways can be banks, money service businesses, marketplaces, or any financial institution.
Traditional banking has risks, we learned during the financial crisis, dollar balances at Chase are not always equivalent to dollar balances at the Bank of Cyprus. So there are understandably risks involved with XRP Ripple as well as we learned from the Bitcoin crash in 2013 which sent crypto-currency markets flat of their head, resulting, investors loosing substantial amounts of their investment.
XRP Ripple investment carries a risk where the value inflates & deflates based on supply & demand like any other investment.
Why Banks Have Confidence in Ripple Protocol
Banks see Ripple protocol or payment gateway as a future payment processing network not only to save money but to provide a service to clients as well with an "INSTANT" transaction within seconds rather than days. Banks view this method a more feasible, cost effective & reliable way to do business.
In some way Ripple is now become more like traditional banks (in early stages of development) in terms of transparency just happens to be that the way that the Ripple technology tracks information is by account. And an account is connected with an account holder, an individual or an entity that's holding that account. So, using this technology we're able to see financial activity by account holder just like traditional banks.
Raised Capital Gives Market Confidence
Finally banks only invest in projects they see that will make a profit, so far Ripple Labs have raised $41 Million . Several banks, including CBW Bank and Cross River Bank in the United States, announced that they would adopt the protocol.
The reason behind this is that transactions will take seconds rather than (currently) it takes at least 2 days for international bank transfers, this will save banks & companies large amount of money & hours spent processing payments.
Current Banking Payment System
Global payments systems are built on pre-Internet, outdated rails. The invention of bitcoin and cryptocurrency marked a pivotal moment in history, as it laid the foundation for an IP-based payments system. Now, Ripple wires the world's money together through its breakthrough transaction Internet protocol and federated payments network. What does it mean? Anyone can send money anywhere in the world, in any currency, instantly and practically for free.
Did anyone ever imagine in 2009 that Bitcoin will be accepted as a payment method? Look at it today, its common & accepted & used widely.
Ripple Future
In my view once the ripple network gets recognized & is used & accepted widely as a forex or money exchange by traditional banks, then this will be the time when we will see Ripple price go towards a constant upward trend, which is expected to take around 3-5 years. In meanwhile turbulent Bitcoin will dictate Ripple price until fully developed & functional.
original content found here,
https://forum.ripple.com/viewtopic.php?f=15&t=15785
my thought ?
i am not a huge fan of there ideas to work with the banks,
i Just think that the people are not ready to leave the third party system,
and that's why ripple has a shot it wont run for ever but they can make the best of it,
eventually they wil need to find a way to work without banks ,
as most of us agree on we dont need the third parties we can handle our own,
Have a great day,
@Blockchainsupporter
