History of Ripple: 10 facts

Why is there so much interest in Ripple cryptocurrency? Why have so many Bitcoin exchanges been including the option of trading Ripple coin on their platforms? Apart from what it offers technologically, Ripple has attracted a great number of investors due to its skyrocketing performance. Being as low as one cent in March 2017, the price of Ripple cryptocurrency has surged to the highs of $3.60. At the moment, the coin has dipped to $1 again. However, it’s still hard to find any XRP news where they don’t speculate on the Ripple price history, claiming the rate can reach $10 or even higher in 2018.

Being a layman, it is very hard to come up with the decision whether to invest or not. The best way to solve this issue is to understand what Ripple actually is and go to the roots of its evolvement. So, the roadmap of the article is the following:

• Go through 10 facts about this innovative system;
• Review a broad Ripple price history;
• Ripple news today.

1. Ripple is a payment processing network

Nothing to add, really. Ripple is, first of all, a network, whose aim is to provide an efficient payment processing. While…

2. XRP is the internal token within the network

XRP is the ticker for which the token is traded on the corresponding platforms. People mostly call it Ripple and that’s ok. It’s just that you need to know the difference before delving deeper.

3. Ripple is the fastest decentralized payment network

In Bitcoin, every transaction is supposed to be processed in 10 minutes, but in practice it takes from couple of hours to even days (If you don’t pay additional fees). Transactions in Ripple reach their destination in, literally, seconds. On average, it takes about 4-10 seconds for every payment to be verified and processed.

4. Ripple doesn’t include fees… almost

For every transaction, the network requires from 0.00001 to 0.00009 XRPs. It’s silly to even call it a fee. What’s more interesting is that this money doesn’t go to inventors, nodes or other ‘network keepers’ - it disappears, or as some people call it, - burns away.

Why do they do it? It’s a sort of antispam mechanism that prevents Ripple from being overwhelmed with aimless transactions that occur with only one purpose — disrupt the network.

5. Ripple’s ‘core audience’ are banks

Think about this… It’s the 21st century and we still need to wait a couple of days before any international transaction is finalized. It still makes sense not to send money on Sunday, because many banks do not operate on that day. That’s completely ridiculous…

Unsurprisingly enough, many financial institutions already cooperate with Ripple. On the one hand, it is a complete breakthrough that today you can send money to any part of the world without fees and in only 4 seconds. On the other hand, it’s about time... Come on, we’ve already been in space and walked the moon. Why was it that hard to send money overseas on Sunday for so many years?

6. Ripple cryptocurrency algorithm operates on the blockchain, but it’s not that decentralized as Bitcoin

Lack of an absolute decentralization is the greatest disadvantage of Ripple. At the same time, it is the price cryptocurrency Ripple pays for much greater performance than of any other cryptocurrencies. Here are some numbers just for statistics. Currently, the network of Ethereum holds about 33 thousand independent nodes that validate the transactions, while Ripple — as little as 55 validator nodes. This is not decentralization in its pure form. What this means is that theoretically, these 55 nodes can act by their rules. But the fact is that they are held by major banks and corporations who need Ripple as a payment system. So, it seems they have absolutely no sense to disrupt the network by confirming fake transactions.

7. Still, it is open-source and provides for P2P interaction

Ripple’s source code is all available on Github. Still, the interaction between participants is peer-to-peer, meaning that there’s no any third-party standing on the way.

8. All Ripples already exist

It’s not the case of Bitcoin, when all coins will be eventually mined in a distant 2140. All Ripple coins were already pre-mined. However, not all of them circulate in the network. About 60% of coins are held by the inventors. It seems they have their own plan of when and how to spread the tokens. The most widespread theory is that they will be gradually rendered to banks to provide liquidity.

9. The network can be used as a sort of decentralized exchange

The XRP ledger has a currency exchange built on the protocol level. So that you don’t have to use any private exchanges in order to buy or sell XRPs. The network has, what they call, gateways. They are at the intersection of the digital network of Ripple with its XRP tokens and the physical world and any store of value in it (such as fiat money). Any online financial institution can become a gateway of the Ripple network.

10. The concept of Ripple was born even before Bitcoin

That’s how we smoothly came to the point of reviewing Ripple from the historical point of view.

• Bitcoin — the first cryptocurrency of its kind was released in 2009. However, four years before that, RipplePay was developed. The initial aim of Ryan Fugger, the inventor, was to create a decentralized network where users could create ‘their own money’. On actual basis, it was a monetary system for providing secure payments.
• Some years later, namely in 2011, Jed McCaleb, inspired by RipplePay, came up with the idea of building the digital currency system where coins are not mined as in an already existing Bitcoin, but verified through a consensus mechanism. That’s how it could possibly provide faster transactions and require less power for network maintenance.
• After almost a year of discussions and propositions, a team of three: Jed McCaleb, Chris Larsen and Ryan Fugger established OpenCoin. They started working on Ripple Transaction Protocol, which would allow for p2p transactions and a currency exchange within the network. That’s when XRP token was created as well.
• In 2013, OpenCoin is renamed RippleLabs and makes the source code available for everyone.
• 2014 — Fider was the first major bank to start partnership with Ripple.
• Later that year, Ripple started cooperating with a global payment service, which positively affected its price.
• Throughout 2015, progressively more major banks and companies were joining the network of Ripple, making the year truly groundbreaking.
• In 2016, RippleLabs was eventually renamed Ripple and also achieved a virtual currency license, making it possible for Ripple to officially operate in the State of New York.
• As for today, Ripple is cooperating with over 100 financial institutions, like UniCredit, TransferGo and Credit Agricole.

These guys are working really hard to introduce blockchain on the worldwide financial level. For now, it seems that, in this specific branch of activity, they totally have no competitors. Considering the current situation, there’s absolutely no doubt that in 2018 Ripple coin will continue prospering, as it has all the required background to really make the running in the current and following years.