Ripple
Overview
Ripple is a digital payment protocol that enables fast, low-cost international money transfers. It was developed by Ripple Labs, a technology company specializing in the development and distribution of real-time gross settlement systems, currency exchange, and remittance networks. Ripple's protocol is built upon a distributed open source internet protocol, consensus ledger, and the native cryptocurrency known as XRP.
History
Ripple was first conceived by Jed McCaleb and built by Arthur Britto and David Schwartz. McCaleb invited Chris Larsen to co-found the company, Ripple Labs, which they did in September 2012. The Ripple protocol was designed to enable instant, direct transfers between two parties, in any currency, with the aim of making financial transactions more efficient.
Ripple Protocol
The Ripple protocol is designed to route payments through the shortest and quickest path in a global network of nodes. The protocol uses a consensus algorithm to validate account balances and transactions on the system, improving overall system integrity. The protocol's internal cryptocurrency, XRP, is mainly used as a bridge currency for transferring other values.
XRP
XRP is the native digital asset of the Ripple network and is used to facilitate transactions between different fiat currencies. It acts as a bridge currency to other currencies in the network, minimizing liquidity costs. XRP is also used as an anti-spam measure, as each transaction requires a small amount of XRP to be destroyed, preventing spam transactions on the network.
Use Cases
Ripple's primary use case is for international money transfers, where it can offer significant savings in time and cost compared to traditional methods. Ripple's protocol is also increasingly being adopted by banks and payment networks as settlement infrastructure technology, with American Express, Santander, and Standard Chartered among the companies that have adopted Ripple's technology.
Criticisms and Controversies
Despite its potential benefits, Ripple has faced criticism and controversy. Some critics argue that Ripple's centralization contradicts the principles of decentralized cryptocurrencies like Bitcoin. Others have expressed concerns about the company's control over the XRP supply, which could potentially allow them to manipulate the market. Ripple Labs and its executives have also faced legal action from the Securities and Exchange Commission over the sale of XRP.
