Created by Jed McCaleb and Chris Larsen, Ripple is a system that uses a particular cryptocurrency (named XRP) to intermediate between financial transactions of any two or more parties anywhere in the world. It was first released in 2012, fully integrated with a payment system that uses blockchain technology as its network. Ripple may or may not have been intentionally made to replace the SWIFT system, as many banks of the world today use it to transact overseas. Although reliable and time-tested, SWIFT still takes a few days to a week to process an international transfer. Incidentally, Ripple does the same, albeit with better reliability and speed. It completes cross-border transactions within mere seconds.
Many financial institutions today prefer to use Ripple since the payment system is also cost-effective. Ripple costs very little in fees compared to bitcoin, which is at 0.0001 XRP, a mere fraction of a penny. In addition to that, Ripple also uses much less energy. and does not do blockchain mining for transactions. Instead, it serves its clients using a consensus mechanism between bank-owned servers for confirmation of transactions. Currently, Ripple belongs to the top six most valuable blockchain-based tokens in terms of market capitalization. Even though it was somewhat hampered by a lawsuit filed against it by the Securities and Exchange Commission or SEC, they were alleged to have conducted 1.3 Billion dollars of unregistered securities offering. The government body deemed that it violated SEC rules. The legal battle continues up to today. Nevertheless, XRP's value continues to surge.
XRP Ledger is the company's open-source blockchain, featuring the XRP token as its primary asset. Although Ripple uses it for many purposes, it works independently of the corporation. The XRP Ledger, while not as well-known as many other blockchains, can be utilized as a settlement platform.
The XRP Ledger, unlike Ethereum, does not rely on a proof-of-work (PoS) consensus protocol. Unlike most other cryptos, it doesn't use a proof-of-stake consensus mechanism either. Instead, it employs the XRP Ledger Trust Model, which is a bit more centralized but quite efficient at lowering the speed and costs of international transactions. Transactions on the XRP Ledger can be executed in seconds, far faster than Bitcoin's ten-minute block duration or established systems such as SWIFT.
Furthermore, RippleX provides blockchain services to businesses looking to deliver payment-related services. Companies can use RippleX, and the fast XRP Ledger's to allow for broad scalability and an enjoyable user experience in their payment solutions instead of creating their own decentralized apps and blockchain. Examples of companies that use RippleX services include Interledger and PayString.
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