The state of the XRP distributed ledger changes every few seconds. When the nodes that validate the transactions agree on which transactions to validate and add them to the ledger, a new instance, or current state as it is known in other blockchains, is defined. It is given its own serial number which helps to identify it.
Ripple has turned the tables on financial activism by directly targeting banks and helping them to instantly and cheaply affect worldwide transfer of money. They have effectively force-fed an incentive that has slowly turned pro-establishment financial institutions to embrace blockchain technology by showing them a better way of doing what they do. Buying and holding XRP is an investment in and of itself in the long run since its traffic, (and hence demand) has been growing.
Ripple confirms transactions in under 4 seconds, and it handles more than 10,000 transactions per second, giving it a huge edge over Bitcoin (which does less than 7 transactions per second) and many other altcoins.
As Ripple continues to appeal to larger banks, XRP continues to gain traction. The blockchain holds the third largest market capitalization amongst cryptos (~ $8 billion), after Bitcoin and Et...
Ripple pre-mined 100 billion XRP at the inception of the blockchain and designed the protocol such that no more XRP can be created. The company holds 61 billion of all XRP, but has locked them in smart contracts that only allow a release of 1 billion XRP each month.
Because the company holds the lion’s share of the coin, anything that makes the price plummet is not good for them. This means that they would not want, for example, to sell their holdings all at once, which would increase supply and crash the price. Corporations can invest in Ripple the company directly, but individuals can only invest by buying and holding XRP.
Destruction of XRP
Whenever a transaction is validated and 0.00001 XRP is burnt, it means that the supply of all XRP in existence reduces by a little bit. However, the rate of destruction is not enough to cause deflation as it is negligible in the short and long term. At current r...
Ripple's blockchain has been developed to enable fast and cheap global transfer of money. It enables real-time gross settlement that aims to make global payments as fast as sending an email. With Ripple, users make payments to each other by using cryptographically signed transactions denominated in either fiat currencies or Ripple's internal currency (XRP).
To help us understand how the protocol works, let's use the Hawala system to explain, which is a method of transferring money without any actual movement. Suppose Ian works in the US and wants to send GBP 100 back home to Jane who lives in the UK. He gives his bank (called a Gateway in Ripple’s lingo) the money and a password which he shares only with Jane. The bank will inform Jane’s bank to release GBP 100 to anyone who knows the password.
After Jane comes and states the password, she is giv...
Positioning itself as the solution that allows banking institutions to transfer large amounts of money freely and without delays on a distributed network, Ripple is a decentralized, blockchain-based real-time gross settlement system (RTGS), currency exchange, and remittance network.
A brief history of Ripple
The predecessor to the Ripple payment protocol, Ripplepay, was first developed in 2004 by Ryan Fugger — that's 4 years before Bitcoin was born. Fugger wanted to create a monetary system that was decentralized and could effectively allow individuals and communities to create their own money.
In May 2011, after selling the now-defunct crypto exchange Mt. Gox, Jeb McCaleb hired Chris Larsen to work with him on the Ripple project. McCaleb borrowed the consensus idea from bitcoin to come up with a distributed system for money transfer. McCaleb asked Fugger to hand over RipplePay, the predecessor to Ripple, and founded OpenCoin in 2012.
OpenCoin worked on and released the Ripple money tra...
When an entire organization is formed and run using a combination of smart contracts and decentralized applications, with very minimal human intervention, it can be referred to as a DAO.
Buterin has posited that a DAO can be run without human managerial interference so long as it is built on a Turing-complete platform like the Ethereum Virtual Machine (EVM). After it has been developed, its coin can be launched, and investors can buy this coin with Ether. They can then use this coin to vote and can eventually earn a percentage of the profit commensurate with their coin holding.
DAOs have been proposed to run for various purposes, including as charity organizations, venture capital organizations and medical insurance firms.
The most famous DAO was The DAO, an Ethereum based Venture Capital fund that was crowdfunded to the tune of $150 million a...
When several smart contracts are working in harmony, they can produce complex outcomes in a strict and exact way as programmed by the creator. When this happens, the group of smart contracts can be referred to as a decentralized application, or dApp.
To find out what the blockchain can enable us to do, it is important to note that the Ethereum blockchain gives us three types of dApps.
Money based applications allow us to trade in money, transferring it from wallet to wallet, peer to peer, at a fraction of traditional costs.
Applications that involve money allow for the transfer of other types of data, including records, licenses, certificates, etc. in exchange for that money.
Other applications that do not necessarily involve the transfer of money but can give absolute provenance and security of other types of assets are also possible — for example, government systems like voting, opinion polls, and surveys.