Ripple cryptocurrency sharpens competition in the blockchain solutions market

Ripple Labs was founded in 2012. Then most of the current Altkouns did not exist. Instead of noisy advertising, constant updates and forks, various reasons to attract attention or creating speculative waves on the stock exchanges, Ripple Labs creates alternative methods of payment, but not alternative banks (like Bitcoin and other altcoins), and alternative ones for banks (although, of course, no one forbids use Ripple tokens and individuals for calculations). The advantages of using such tokens over fiat money for payments are the same as those of cryptocurrencies - security, tiny commissions, high speed of making and processing transactions.

Is it possible to call Ripple a cryptocurrency? Ripple is a cryptocurrency, but not Altcoin, since this solution does not rely on the blockchain. Instead, a “payment gateway” system has been created here that makes Ripple (XRP) tokens interesting for bank calculations. Therefore, the founders of the company looked condescendingly at the fuss about the anonymity of cryptocurrencies and “smart contracts”, since all of this did not concern them. The program code has long been written and debugged, and the business is already at the negotiation stage with another bank; yes there, by a consortium of banks. XRP tokens have a stable demand on the stock exchanges, for example, Poloniex , which means that the development has already received recognition from the market. And this is despite the fact that many critics have predicted Ripple the inevitable death. And this year, it seems, their “star hour” is coming.

Ripple Labs plans for 2017

In early February 2017, Ripple began working with a bank, the value of which can be compared with the value of the Central Bank of the country. This is the National Bank of Abu Dhabi (National Bank of Abu Dhabi, NBAD), a financial institution, founded in 1968. The largest bank in terms of capitalization in the United Arab Emirates, with assets exceeding $ 220 billion, operates in five continents and seventeen countries.

This year, Ripple plans to continue to work with NBAD so that the customers of this bank use fast and inexpensive money transfers without losing their funds when exchanging various currencies. The first project of this scale, which arose in the Middle East, was a response to the efforts of the leaders of the Emirate of Abu Dhabi to develop the blockchain technology.
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The overlooked success of Ripple in 2016

NBAD is not the only large bank with which Ripple began cooperation. Overall, last year was very successful for Ripple. In 2016, the total amount of investments received by the company exceeded $ 100 million, and among the company's investors are Google Ventures and Andreessen Horowitz. At the same time, only in 2016, an investment of $ 55 million was received, which is more than in all previous years.

The year 2016 for the company began with cooperation between SBI Holdings and SBI Ripple Asia, which brought them to the markets of Japan, China, Taiwan, South Korea and other countries of the Asia-Pacific region. The consortium began with the unification of 15 Asian banks around Ripple, and by March their number had grown to 30. Now 42 banks in Asia are using Ripple technologies for domestic and international payments. In February, Royal Bank of Canada, the largest bank in Canada, began testing the distributed Ripple registry.

In April, Santander became the first bank in Britain to use Ripple for international payments in real time. In June, Ripple was licensed by the State of New York to conduct BitLicense cryptocurrency operations. In the summer of the same year, ATB in Canada and ReiseBank in Germany made the first trial deal between themselves using Ripple. The first European offices in London and Luxembourg were also opened , and in June, Standard Chartered Bank became one of the investors in Ripple. In the fall, six very large banks: Bank of America, Merrill Lynch, Santander, UniCredit, Standard Chartered, Westpac Banking Corporation, and Royal Bank of Canada founded another consortium with Ripple called the Global Payments Steering Group.

How did the Ripple project evolve?

It all started with the development under the name Ripplepay in 2004, four years before the emergence of Bitcoin, Ryan Fugger, a programmer from Canada. The first version of his system, RipplePay.com, was released in 2005, and then the passion of the popular at that time decentralized torrents technology affected. Ryan Fugger met Jed McCaleb, who was involved in the development of the eDonkey file-sharing network, as well as other members of this network, Arthur Britto and David Schwarz. In 2011, they completely revised the concept of Ripple and decided to rely on a decentralized network, which, unlike Bitcoin, has no mining. At the same time, the Ripple network is much faster than the Bitcoin network. In 2012, they were joined by Chris Larsen, who had previously founded two e-lending systems.

Since 2012, their subsidiary OpenCoin Inc. Engaged in the improvement of the payment protocol. September 26, 2013 OpenCoin Inc. changed its name to Ripple Labs Inc., the original team retired and Chris Larsen became director. And since 2014, the company has reoriented itself to cooperation with banks. The first bank to start work with them in 2014 was German bank Fidor from Munich. In December 2014, the XRP cryptocurrency for a short time bypassed Lightcoin, escaping into second place in terms of cryptocurrency market capitalization, which reached $ 500 million. At the end of April 2015, Western Union became interested in their technology, and at the end of May 2015, Commonwealth Bank of Australia.

The project also had failures, for example, a $ 700,000 fine , issued in 2015 by Ripple Labs for violating bank secrecy. But another success of that year was the opening of an office in Australian Sydney.

What is the logic of the Ripple system?

Instead of creating their currency by mining, they released 100 billion XRP "coins", leaving about two-thirds of them, and one-third more or less evenly distributed among the happy users. When processing each transaction, 0.00001 XRP is written off, which is done to counter spam transaction. The written-off sums simply “burn out”, reducing the total amount of money supply. If the system is attacked (overloaded with transactions), the network will automatically raise commissions until the attack becomes unprofitable for the attacker, while ordinary users will notice almost nothing.

RPCA (Ripple Protocol consensus algorithm) protocol is used, protected from intruders who may try to fork the base. All nodes constantly interrogate each other and after a certain period of time they vote on which copy of the database is correct. If there is a well-developed network of nodes, it is impossible to get a majority when voting, since the attacker needs to gain a majority for the limited time between polls of the network.

The RPCA payment protocol itself consists of connecting peers, representing something like SMTP for email in the world of finance. Nodes can use fiat currencies (USD, EUR, MXN, NZD, GBP, NOK, JPY, CAD, CHF, CNY, AUD), cryptocurrency (BTC, XRP, LTC, NMC, NXT, PPC, XVN, SLL) and even precious metals (gold, silver, platinum), freely exchanging it all with each other using XRP. Each XRP is divided into 1 million parts, and the smallest particle is called a “drop” - “drop”.

Is it worth the investment?

The above facts indicate that Ripple has three important advantages:

• The market price is supported by real applicability and practical cases;
• The company does not attract the attention of regulators, since it has been officially acting for a long time. The Ripple Labs board of directors includes representatives of the FINTECH industry with extensive connections in the banking circles of both the USA and Europe;
• Unlike the discredited projects of DAO and Mt.Gox, Ripple pays attention to security - so there were no successful Ripple hacks that could undermine the credibility of this cryptocurrency. Add until it was.

There is in this “barrel of honey” and “tar spoon”. According to a study conducted in early January by the Chinese cybersecurity center CERT, Ripple has the worst security software. So, if a large number of XRP tokens hit the market as a result of Ripple hacking, and trust in the system falls, the price recovery may have to wait for years.