Ripple (XRP) has caught the fancy of not just investors but the finance and banking industry as well. That is why many people are actually curious about ripple.
We will today explain what ripple actually is and how the technology works.
Ripple is the cryptocurrency of a protocol which offers a real-time gross settlement system. It works on a global scale. As a result, any individual is able to send money in XRP tokens anywhere around the world. Using the real-time settlement which is offered by the ripple protocol, the money would be sent on a real-time basis. As a result, it will become easier for the individuals or the involved stakeholders to conclude the transaction quite quickly.
Ripple was released in 2012. Ripple was founded by Chris Larsen and Jed McCaleb. A significant number of the cryptocurrency tokens are still held with them. They have placed their holdings and are releasing 1 million tokens each and every month. The total amount of tokens which have been placed in an escrow account is 55 billion. This is done to ensure that the market is not suddenly flooded with XRP tokens. This is also keeping the price of XRP tokens stable.
Technology Used in Ripple:
The XRP token is a cryptocurrency. It is based on the hub and spoke model. Whenever anyone sends the XRP tokens, they are 1stcollected in the form of tokens at the hub. Only once the verification is done, they are sent to the recipient. XRP tokens are not mandatory for the Ripple protocol. Many of the banks that are using the ripple protocol transfer dollars rather than the XRP tokens. The average transaction time of the ripple protocol is 3.5 seconds. As a result, it is possible to send money anywhere around the world within this time.
How does Ripple work?
The consensus mechanism is used by the ripple in order to validate the transaction. With the help of the consensus mechanism, double spending is avoided. The servers in the network constantly compare with each other, the amounts which are transferred. When the amount matches, thereafter only the transaction is concluded. The servers could be owned by the banks or the network or anyone else. When there is a complete consensus between the servers regarding the transaction, thereafter only it is concluded.
Owing to the manner in which the ripple protocol works, the fees are very less. Currently, the fees less than $ 0.01 per XRP token. As a result, not only the assets can be transferred digitally quite quickly but also the fees are negligible as well. This ensures that Ripple is becoming one of the most affordable ways to transfer money anywhere around the world.