Ripple’s bread and butter: the consensus protocol
Bitcoin, along with other renowned cryptocurrencies in the market, performs its operations with the proof-of-work system. Others, such as Next, use proof-of-stake; but Ripple implements the consensus protocol.
The consensus protocol validates account balances and transactions in the network, improving overall integrity by avoiding double-spending. The system will automatically delete malicious advances from morally shady people looking to send one deal to multiple gateways.
In short, the protocol consists of distributed nodes deciding by consensus the transaction’s pecking order through a majority vote. One would think that they take a lot of time to complete. Well, five seconds isn’t a whole lot, is it? Ripple is a decentralized platform because it doesn’t involve any governance or central authorities in any part of the process.
While the transactions are all made public in the consensus ledger, there is still anonymity because they can’t be linked with the involved people’s ID or account. All users or gateways have a database of every registered IOU.
Get to know Ripple’s benefits
The consensus ledger that the Ripple system implements is versatile and fast enough that each day, more and more banks and financial institutions are adopting it as their preferred way to perform their business operations.
Ripple provides an improvement on the traditional way that banks use to work. The transactions are completed, settled and registered in a matter of seconds despite the high amount of traffic that the platform experiences every day. That is a vast improvement over, say, the Bitcoin system, which takes an average of ten minutes to complete an operation.
Traditional banks and financial institutions can take days, or even weeks, to perform a wire transfer, and let’s face it, that delay isn’t going to cut it in our current financial reality. On top of all that, the transaction fees in Ripple are almost non-existent: the minimum is 0.00001 XRP. That’s nothing if you compare it to the costs of a cross-border payment.
Ripple, the token
The Ripple network has an associated cryptocurrency; the XRP, which has the power of liquidity by serving as a bridge between other means of payment, making the exchange more comfortable for all parties involved in a transaction.
Judging by data as recent as June 2017, the XRP was the world’s the third-largest cryptocurrency by market cap of $11.94 billion. The first is Bitcoin (BTC,) at $45.26 billion, and the second is Ethereum (ETH) at $31.53 billion.
While there are no central authorities that control Ripple’s price and behavior in the market, the right answer to the question seems to be no: the platform is not entirely decentralized. That doesn’t mean it isn’t successful, as worldly famous financial institutions such as Santander, Bank of America, UBS, American Express, RBC, and Westpac, just to name a few, use it for operations.
The blockchain technology doesn’t allow any party or the network itself to control anything regarding transactions, whereas these banks and institutions, using the Ripple’s distributed ledger, can charge their specified transaction fees.
People can’t pre-mine XRPs, unlike the cases of Ethereum and Bitcoin. They are fully decentralized platforms backed by millions of miners all around the planet. No person or entity can have control over them. Ripple, administrated by the Ripple company, sees its nodes handled and managed by the mentioned financial institutions.
There is a maximum number of Ripple tokens to be hand in the world, set at the moment of its inception to the market. The said number can’t go higher, which means that there aren’t any new XRPs being created.
More Visit: https://whatisxrp.com/