Date Launched: February 02, 2013
Founders: Arthur Britto, David Schwartz, Ryan Fugger
Major Investors: Andreessen Horowitz, IDG Capital, Google Ventures, CME Ventures, Seagate, SBI Investment, Santander
Type: Currency, Payment
Child Code Fork: Stellar
Ripple is a blockchain based infrastructure that helps banks do international payments. Currently, cross-border payments are slow and involve multiple middlemen. Ripple’s big bet is that XRP will become a “bridge currency” that many financial institutions use to settle cross-border payments faster and more cheaply. The company aims to compete with the current SWIFT system of cross-border payments.
Ripple as a Cryptocurrency
Many contend that Ripple is not a truly decentralized cryptocurrency. In Ripple’s network there are no miners; all 100 billion coins of XRP that exist were created when the network launched in 2012. Its creators kept 20 billion and gave the rest to the company. Since then, Ripple has been “methodically” distributing tokens to clients, but it still holds nearly 50 billion in an escrow account.
In addition, Ripple uses a list of identified, trusted participants to validate their transactions. This stands in stark contrast to Bitcoin, where anyone can run a Bitcoin node or become a miner. This potentially gives Ripple a large measure of control over XRP’s inner workings, leading many crypto enthusiasts to dislike Ripple.
Finally, Ripple’s blockchain-based payment network doesn’t need a bridge currency to work, and many of the institutions adopting the network has so far chosen to exchange digital IOUs instead. Ripple has outlined to bank that they can save money by using the XRP token. It remains to be seen whether XRP will be adopted as the mainstream form of bridge currency.
Ripple uses a group of validator nodes to confirm and process transactions. Validator nodes are setup through the Ripple Corporation and includes wellknown organizations such as Microsoft and MIT. These nodes are continuously getting added to the ecosystem as more trusted organizations use Ripple.
Ripple transactions are extremely fast. Due to its network of consensus nodes, Ripple can process up to 1400 transactions per second, with average transaction confirmation speeds of about 4 seconds. There are virtually no fees for Ripple transactions. Instead, a tiny amount of Ripple is burned in each transaction.
Currently, Ripple’s main focus is to build up its ecosystem of banks and implement XRP into the platform. In the future, Ripple aims to upgrade its platform to include more than just currencies, creating a marketplace where anything of value can be traded.