The Ripple XRP cryptocurrency and Interledger Protocol can create an Internet of Value

Ripple is currently the number three cryptocurrency based upon market capitalization as of August 29, 2018. Ripple has a market capitalization of $13.6 billion. Chris Larsen is co-founder and former CEO of the cryptocurrency company Ripple. In Feb, 2018, Chris held 17% share in Ripple company. (15.56 billion XRP) At today’s exchange rate of $0.34 per XRP, Chris Larsen total worth is about $5 Billion.

XRP is currently over a thousand times faster than Bitcoin.
XRP confirmation time is deterministic and closes every 3.2 seconds.
XRP transaction costs are 0.1 cents.

XRP consistently handles 1,500 transactions per second, 24×7, and can scale to handle the same throughput as Visa. (50,000 transactions per second, as of July 15, 2017.)

Ryan Fuger is a developer who created Project Ripple in Canada in 2004. Project Ripple was to create a person-to-person exchange of IOUs.

In 2011, three people wanted to build a cryptocurrency that was much more efficient than Bitcoin. They wanted to change the consensus algorithm. They took ideas from the ripple project around the idea of pathfinding algorithms to exchange anything of value for any other thing.

You could exchange anything of value in a very efficient way with a pathfinding algorithm coupled with a digital asset that you know had no counterparty or gateway counterparty.

The birth of XRP was to make company that was gonna advocate for an ecosystem and focus on the ecosystem. The company was given a large percentage of the XRP currency. Ryan’s ripple project folder was bought.

Internet of Value

Globalization has problems today because it is incomplete.

Real mobilization needs interoperability and three core things
1. data – goods
2. Shipping
3. Money

1. data – goods interoperates with the Internet
2. Shipping interoperates with the shipping container
3. Money – but money networks do not interoperate

Blockchains are a subset of the solution.

The broader solution combines value interoperability protocols with a super fast and efficient digital asset and then with some kind of mechanism for programming how that value moves around.

Interledger Protocol

The Interledger Protocol (ILP) and XRP (Ripple) can enable money network interoperability.

Payment networks today are siloed and disconnected. Payments are relatively easy within one country or if the sender and recipient have accounts on the same network or ledger. Sending from one ledger to another is often impossible. Connections that exits now are manual, slow, or expensive.

The Interledger Protocol provides for routing payments across different digital asset ledgers while isolating senders and receivers from the risk of intermediary failures. Secure multi-hop payments and automatic routing enables a global network of networks for different types of value that can connect any sender with any receiver.

A Simple Payment Setup Protocol (SPSP) module would call the interledger module with the address and other parameters in the interledger packet to send a payment. The interledger module would send a transfer to the next connector or destination account along with the interledger packet and according to the parameters given. The transfer and interledger packet would be received by the next host’s interledger module and handled by each successive connector and finally the destination’s SPSP module.

In the Ripple case, the interledger module would call on a local ledger module which would create a Ripple transaction with the interledger packet attached to transmit to the Ripple Consensus Ledger. The Ripple address would be derived from the interledger address by the local ledger interface and would be the address of some account in the Ripple network, which might belong to a connector to other ledgers.

Ripple XRP vision

Ripple XRP’s wants to remove friction from global payments and enable the Internet of Value.

This will rewire the global financial system to improve the cost, speed and certainty of transactions.

A core problem in the global financial system is how liquidity is managed.

If you enable liquidity in real-time then you can eliminate the need for funding (nostro and vostro) accounts.

Nostro account refers to an account that a bank holds in a foreign currency in another bank. Nostros are frequently used to facilitate foreign exchange and trade transactions. The opposite term is vostro accounts. Costro is how a bank refers to the accounts that other banks have on its books in its home currency.

Ripple sees this new frictionless financial world being a ten to fifteen-year transformation.

Written by Brian Wang at Nextbigfuture.com
Sources- Ripple Youtube videos, wikipedia and Ripple website

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