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Ripple (cryptocurrency)

Ripple (cryptocurrency)

Ripple is one of the centralized cryptocurrencies based on creating a secure, instant and almost free global financial transactions with currency called ripples (XRP).

Ripple is a currency exchange and remittance network by Ripple. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol, it is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples). Ripple was released in 2012, helping to enable "secure, instant and nearly free global financial transactions of any size with no chargebacks."

At its core, Ripple is based around a shared, public database or ledger, which uses a consensus process that allows for payments, exchanges and remittance in a distributed process. In 2014, Ripple defended the security of its consensus algorithm against a competitor; Stellar Network. Currently, Ripple is the third-largest cryptocurrency by market capitalization, after Bitcoin and Ethereum. Used by companies such as UniCredit, UBS or Santander, the Ripple protocol has been increasingly adopted by banks and payment networks as settlement infrastructure technology.

Concept

With the Ripple ledger, people can send and receive different types of fiat currency or cryptocurrency. XRP is the native currency of the ledger, but by preparing trustlines, in other words a trust relationship between two parties, two financial organizations or people can trade with multiple currencies, all on the Ripple ledger. In this way, banks can send money across the world in just seconds, not days. The foreign currency that is held on the ledger is in the form of an IOU. In addition, if one party sought to purchase a foreign currency from a party for which they have no direct trustline, Ripple provides a path-finding algorithm that connects the two parties through indirect trustlines. This mechanism is called 'rippling' and consumers who have multiple gateways in the same currency can 'allow rippling' on their account to receive a small transit fee for allowing inter-gateway liquidity.

Spam prevention

Every Ripple wallet must have a minimum of 20 XRP and every transaction mandates a fee in Ripple. This helps to prevent flooding of the network from adversaries who wish to thwart it.

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David Schwartz, Noah Youngs and Arthur Britto

The Ripple Protocol Consensus Algorithm

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