Ripple: the notion and the way it works
The forerunner of modern Ripple platform - the RipplePay system - appeared in 2004. Canadian programmer Ryan Fugger managed to create a decentralized payment platform for a wide range of users. However, despite a good idea, the project did not get much success, and Fugger decided to go even further - to change the existing system of bank and interbank payments. Or rather, make them decentralized, independent of intermediaries and third parties.
The updated system appeared in 2012 and was named Ripple. The company, which is engaged in the development and maintenance of the platform, was named Ripple Labs. Fugger together with other developers created a secure decentralized platform for payments between physical and even legal entities (primarily banking institutions). In addition, the platform launched its own crypto currency, called the ripple with the designation XRP.
The basis of the system is a unique algorithm. Ripple uses its own secure RPCA protocol, which connects different nodes of the system (so-called entry points). This is an open source protocol that allows all users in the system quickly and safely exchange resources (dollars, BTC, gold or even air miles). It’s easy to make payments and conclude deals, while paying a single minimum commission for ripples.
To explain the concept Ripple is often used the example of an apple and a movie ticket. For example, you live in Krasnodar and you have an apple, and you want a ticket to the cinema. Peter has a ticket, but he lives in Toronto. There are a lot of other people between, each of them also own certain resources. Together you can unite in a single system for exchange. You "launch" the apple into the system - Ivan buys it for the ball - Peter buys the ball for a ticket to the cinema - you get your ticket by giving the apple. This is a simplified form of your exchange network and is Ripple. You exchange resources with other users and are not dependent on third parties.
You give one resource and get another, paying only the minimum commission that is needed to maintain the system. Similarly, you can exchange a million dollars for BTC and pay for it all the same minimum commission. It is not surprising that such a system immediately came to the liking of world banks - a similar algorithm makes it possible to significantly simplify the procedure for payments.
That is, that XRP acts as a "fuel" for conducting transactions. To exchange their resources for others, the user pays the commission in the form of ripples. In addition, he can buy another currency for the same ripples. However, this crypto currency is completely different from the usual BTC, ETH or LTC.
Ripple’s feature as crypto currency
- XRP cannot be mined. It's not even that it's impossible, but just such an option is not foreseen by crypto currency developers. They minted about 100 billion coins, left themselves 65% of the extracted assets, and the remaining 35% were released to the market.
- Ripple does not use blocking technology. Instead, the system operates so-called "gateways", through which all transactions pass. Dozens of servers installed in the company's offices around the world are responsible for the operation of these gateways.
- The compulsory commission for operations is only 0.00001 XRP. It is noteworthy that immediately after the transaction, this amount "burns up", so it completely disappears from the system. It is done to reduce the likelihood of spam attacks. There is a special category of intruders who send out a huge number of false orders for transactions in order to overload and "collapse" the system. And if the average user does not even notice the withdrawal of the commission, then for the spammer who created a lot of applications, this will result with a huge sum. That is, spam Ripple is simply not profitable. In addition, the "combustion" of coins leads to a gradual reduction in their total quantity, which contributes to a natural increase in the market value of XRP. The fewer coins in circulation, the higher price they have.
- The popularity of ripple as a crypto currency is determined by the number of partner banks that use the Ripple payment system. So, in 2016 the company signed a contract with more than 20 banks, and the price of XRP immediately grew by 200%.
- The scanty cost of ripple today is explained by the large number of coins issued. As the number of coins decreases and the popularity of the entire system increases, the cost of XRP will naturally increase.
The main advantages of XRP:
- High speed of transactions (higher than in the network BTC and even SWIFT);
- The possibility of exchanging any currency for any other currency or value (for example, gold, shares or even precious metals) with minimum commission;
- High level of protection against spam, hacking and hacker attacks;
- Impossibility of inflation (all coins are already nominated, it is impossible to obtain new ones, and hypothetical excess of coins is offset by their "combustion" when paying commission);
- Reversibility of transactions - any transaction can be canceled or edited if an error was committed.
- High monopolization (Ripple Labs owns 65% of existing coins, which allows it to manipulate the exchange rate);
- High centralization (only the developers decide how many coins "throw" into circulation right now).
The way to purchase XRP
As we have already figured out, you cannot blame the ripple in the common sense of the notion. That is, buy an asik or a farm and start blasting the blocks you will not succeed - there are simply no such blocks. Although some kind of mining is still available.
Going to the official site of ripplelabs.com, you can join the scientific developments supported by the corporation. For this, it is necessary to "mine" scientific projects - to carry out calculations or perform other prescribed actions using computational algorithms. The company regularly pays for the work of such "miners" with ripples.
The second way is more usual - to buy crypto currency on the exchange or in the multi-currency.exchange. Or buy cryptocurrency with bank card
Given the popularity of the ripple, you can exchange it in almost every exchanger - you can get acquainted with the current offers and the course on the BestChange.ru monitoring website. With the stock exchanges, problems should also not arise - all the leading players of the crypto-currency market took part in the ripple, including Poloniex, Kraken, Bittrex, Korbit, BitStamp, Coinone, CoinCheck, EXMO, etc.
Where to store XRP?
From the very beginning Ripple Labs offered users to store crypto currency in the purses inside the system itself. But the idea was not liked by most users - only ripples could be kept on the internal purse. And not everyone was eager to start a separate purse for the then not very popular crypto currency.
As a result, the company closed its purse, and the owners of the ripple offered two ways of storing the currency:
- Download and install a special crypto
- Create a crypto on GateHub
How to earn money by means of XRP?
In general, the Ripple system itself and the associated crypto-currency are targeted not at a wide audience of users, but at banks.
For example BTC was created as an alternative to conventional payments, including banking. And Ripple technology is aimed at improving the banking system of payments to make it faster, more efficient and more secure.
However, ordinary users can earn money by XRP:
- Purchase XRP and sell it when the currency becomes more expensive.
- Invest the development of the company.
The main argument for the successful XRP future is the stunning growth of its positions in the market. A year ago, the capitalization of XRP was about 200 million dollars. Today, the total value of the coins issued is estimated at almost $7 billion, and XRP takes the honorable third place after BTC and ETH. Experts call Ripple and its associated crypto currency future payment system.
Today it is used by such banking giants as UniCredit, UBS, Santander and Western Union. Among the partners Ripple is even Microsoft, Google corporation also invested the company's development nearly $60 million.
By the way, it was the abundant financial influence from a corporation with a world-wide name that caused a sharp increase in attention to XRP. If such serious people invest XRP, then this enterprise is doomed to success.