‘Ripple’ may be a totally unknown term to you or you know exactly what I am talking about – either way ‘Ripple’ is creating ripples!
What is it?
‘Ripple’ is one of the implementations of ‘Blockchain’. As you may recollect, ‘Blockchain’ is the decentralized network where different nodes agree on transactions. Each node has a copy of the transaction and none of the transactions can be deleted or modified in any way. You can read more about Blockchain here.
Supply chain management, election process, banking sectors and the very popular cryptocurrency ‘Bitcoin’ are all popular implementations of ‘Blockchain’. Any system that has a lengthy process and needs more transparency for its customers is a worthy contender for ‘Blockchain’ implementation.
Given that reason, what could be a better implementation of ‘Blockchain’ than the payment industry and cross border payments? ‘Ripple’ net is the ‘Blockchain’ decentralized payment system uniting banks, payment vendors and digital asset exchanges to simplify payments all across the world. It was originally created by Arthur Britto, David Schwartz, Ryan Fugger in 2012. It is also known as ‘Real time gross settlement system'(RTGS). To reinstate, the main aim of Ripple is to simplify cross border payments. Ripple net also provides access to digital asset ‘XRP'(XRP is a decentralized digital asset)
Imagine, you are sending money to your loved ones living in a different country in a different time zone. This process is always associated with huge process delays and exorbitant fees. This can be simplified by being using ‘Ripple’ net.
How is it done?
While the detailed working of Ripple is more complicated, let us see an overview of its working:
The originating bank receives the best quotes for sending payments along with foreign exchange rates and fees. The best quote is received and the payment is transferred within a matter of seconds. In short, it is finding the best path to transfer money.
Banks use ‘xCurrent’ to process payments. Payment providers use ‘xRapid’ to liquidate funds and businesses use ‘xVia’ to send the payments.
Advantages of ‘Ripple’:
- Speed – the average transaction takes about 4 seconds
- The funds can be traced in real time
- Low costs and easy liquidity of funds
- Scalable to involve more networks
According to ripple.com, Ripple net provides a “frictionless experience to send money globally”.
Who are the members of ‘Ripple’ net now?
The numbers of members adopting Ripple net is constantly increasing. From India, ‘Axis Bank’, IndusInd bank and Kotak Mahindra bank are some of the popular members. Apart from that, we have Standard Chartered bank, American Express, Yes Bank and others as their members. For a complete visit of members visit this link.
As ‘Ripple’ and the underlying Blockchain is transforming cross border payments, it is important to keep up with this latest technology and sweep its benefits!
Disclaimer: I do not own any cryptocurrency and do not plan to own any for now! 🙂 It is purely my interest to study these interesting topics and write on them!
Jayanthi Manikandan has an undergraduate degree in Computer Science from India and a Master’s degree in Information systems with a specialization in Information security from Detroit, MI, USA.
She has been passionate about Information security and has several years of experience writing on various technical topics. Additionally, she loves to pen a few personal thoughts here as well! 🙂