Ripple Payment Protocol

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Ripple is a real-time gross settlement system (RTGS), currency exchange, and remittance network developed by Ripple Labs. Also known as the Ripple Transaction Protocol (RTXP), it operates on an open-source distributed Internet protocol, leveraging a consensus ledger and a native cryptocurrency called XRP.

Introduced in 2012, Ripple aims to enable "secure, instant, and nearly free global financial transactions of any size without chargebacks." It supports tokens representing fiat currencies, cryptocurrencies, commodities, or other units of value (e.g., airline miles, mobile minutes).


Key Features

1. Consensus Ledger

2. XRP Cryptocurrency

3. Speed and Cost

4. Adoption by Financial Institutions


How Ripple Works

  1. User Trust Lines

    • Participants set trust limits to facilitate IOUs (e.g., Bank A trusts Bank B up to $1M).
  2. Pathfinding

    • The protocol finds the most efficient route for transactions, even converting currencies via XRP if needed.
  3. Liquidity Pools

    • Market makers (hedge funds, FX desks) provide liquidity for less-traded currency pairs.

Historical Milestones


FAQs

Q1: How is Ripple different from Bitcoin?

Q2: Can XRP be mined?

Q3: Why do banks prefer Ripple?

👉 Explore Ripple’s official site for developer tools and case studies.


Future Outlook

Ripple continues expanding its global payment infrastructure, targeting $500B+ in annual transaction volume. Critics highlight centralization risks due to Ripple Labs’ control over XRP supply.

Last updated: June 2024


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