Ripple

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Ripple cryptocurrency guide advises where to buy and how to buy Ripple. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about Ripple as well its status in the world of cryptocurrencies.

Ripple, Thursday, 2018-02-22

Ripple (XRP)

What Is Ripple?

The world of cryptocurrency has been growing rather fast. In just 9 years since Bitcoin was founded in 2009, over 1100 cryptocurrencies have entered the market. Call it supersonic speed! But the design, objectives, and operations in various cryptocurrencies are very different.

The core objective of blockchain technology when Bitcoin debuted was to bypass banks, make payment prompt, and extra cheap. This made cryptocurrencies to be seen as alternatives to banks. The approach generated a huge conflict of interest because central administrations are not just about to let go the main sources of revenues. This is why Ripple is seen as the cryptocurrency that opens a new chapter of cryptocurrencies. Therefore, what exactly is Ripple?

Ripple is a unique real-time grow settlement system, a currency exchange, and prompt remittance network operated by Ripple. It is better to call it Ripple Transaction Protocol (RTXP) built on a distributed open source Internet protocol, open ledger system, and cryptocurrency referred as XRP or Ripples.

The network was released in 2012 by Ripple Labs and it indicates it will enable and support secure payments to every global financial transaction no matter the amount without suffering chargebacks. The network supports tokens that represent conventional currency, commodity, or any acceptable unit of value including mobile minutes.

A cryptocurrency aimed at helping financial institutions improve their services

Ripple operates on the basis of a shared public ledger that employs consensus procedure to allow payments, exchanges, and in the distributed network. At this instance, it is important to note that unlike other cryptocurrencies Ripple (as a decentralized network) can work full throttle without the enterprise. Besides, it cannot be shut down by any entity.

In one of the key objectives that have rattled the crypto community the wrong way, the Ripple CEO in 2014 explained that their core target is not to simply add another digital currency. There are enough of those. The main aim, according to the CEO is applying the technology as a model for creating a settlement system that has no central authority.

For some people, the unique model of Ripple is creating a new way for administrations to look at cryptocurrencies. When Bitcoin debuted in 2009, many anticipated getting a completely anonymous system that would keep their transactions, identity, and history completely secure. But Ripple has proven that it is possible to link with centralized organizations and operate to make transactions easier, direct, and less expensive.

A peep at the difference between Ripples and Bitcoin: Ripple is a payment network for financial organizations and a key competitor to systems such as SWIFT. Though it was not intended as a system for purchasing things online, it can still be traded. On the other hand, Bitcoin targets to become the internationally adopted digital currency that can improve and even replace fiat money.

Beginner's Guide to Ripple

Since 2009 when the cryptocurrency technologies debuted, the race to create new digital currencies has been tense. With over 1100 cryptos already in the streamline, people are faced with the option of picking the best. One of the most outstanding cryptocurrencies in the market today is Ripple. The most notable thing about Ripple is its unique model of operation. While most people are getting into crypto world target reaping greatly through mining, Ripple is a different kind of network altogether. The cryptocurrency opted to give the company behind the network, Ripple Labs, the sole obligation of releasing the coins into the network.

The operational design has also rubbed the crypto community the wrong way in that Ripple prefers working with gateways. It specifically prefers working with financial institutions that facilitate payments. Ripple's unique targeting has endeared it to more financial operators and catapulted its value to an all-time high by the end of 2017.

Digging deeper into this unique cryptocurrency

For many people, the argument has been to classify Ripple as a centralized network. Indeed, even some cryptocurrency exchanges opted to leave Ripple out until recently. It appears that the Ripple Laps and entire development team has a clear view of where they want to take the cryptocurrency. In this guide, we will explore everything you need to know about Ripple and demonstrate why a lot of people are developing a lot of trust in it.

Join this exploratory analysis of Ripples to uncover the technology behind the network, its history, security and markets among others. You need the right guide to decide whether to join Ripples or go for other cryptos. That guide starts right here.

Where and How to Buy Ripple?

If you want to invest in Ripple, you can only purchase the coins. Unlike other cryptocurrencies that allow users to mine their coins, the release of the fast-growing Ripple coins is at the discretion of Ripple Labs. Therefore, how do you go about buying Ripples? The first step is acquiring an appropriate Ripple wallet. This is the place where all the ripples will be held. Some great examples include Ledger Nano S and GateHub. Remember that the wallet is your gateway to the Ripple. Therefore, it must be kept as safe as possible to avoid third-party access and loss of ripples.

The second step is picking an appropriate cryptocurrency exchange to buy the ripples. Ripples are traded in most cryptocurrencies because of the fast-growing value. Note that these exchanges are third parties and will require users to create accounts and verify them. Some of the top exchanges to consider when buying ripples include.

  • Poloniex.
  • Bitfinex.
  • Kraken.
  • BitStamp.

Ripple Wallet

As cryptocurrencies continue to grow in popularity, users must have an appropriate wallet to hold them, secure, and make transactions. Cryptocurrency wallets are special software or hardware that helps to store the XRP safely ready for transactions.

A cryptocurrency wallet is the official store for the cryptocurrency assets. But the word storage is actually a misconception. In reality, you do not store XRP because they never exist outside the Ripple network. What you actually store in the cryptocurrency wallet is the private keys and public keys. Whether you want to use XRP for making payment, investment, or becoming part of the network, you need to pick an appropriate wallet.

How to pick the best Ripple wallet

The cryptocurrency wallet you select to hold Ripples should guarantee the highest level of security for all the altcoins of choice. To be sure of picking the best wallets, here are the main things to consider.

  • Ease of using the wallet when storing, transferring and trading the native assets.
  • Multi-currency support capability. This means you will not need to have multiple wallets if you target holding other assets such as Bitcoin and Ethereum.
  • The wallet should have a reliable cold storage system that allows people to keep their coins offline to reduce the risk of getting hacked and stolen.
  • Look for a wallet with a good reputation. This should be information such as positive feedback from past clients who have used the wallet.
  • Do not forget to check the fee charged for using the wallet. If a wallet has a very high storage and transaction fee, it will easily eat into the stored coins. You will require comparing the charges by different wallets.

The best cryptocurrency wallets

There are different types of XRP wallets that one can go for. You can opt to go for a hardware wallet, mobile wallet, desktop wallet, or paper wallet. The mobile wallets operate like special apps that run on your phone. They are the best for people who are always on the go and need to stay connected to their XRP system. The main wallets that have won the hearts of many people in the XRP network include;

  • Ledger Nano S
This is a finger-sized hardware wallet that looks like a USB drive. It is considered the most secure Ripple wallet on the market today. The wallet keeps the crypto assets online to guarantee users of extra security. It is preferred by Ripple users because they can also store other altcoins such as Ethereum and obviously also Bitcoins. To use the wallet, simply plug it into the laptop or phone and initiate the transaction of choice. Note that the latest model provides users with an automated backup of the wallet to guarantee extra safety.
  • Coinpayments
This is a web-based wallet that allows users to store their currencies online. The wallet operates almost the same way that banks do. You can store about 75 different coins with a very small fee of 0.5%. Note that the transaction fee only applies if the transactions are commercial. This means that personal transactions are not charged.
  • GateHub
GateHub is one of the most popular wallets in the crypto world today. The wallet is preferred because it allows users to buy Ripples using fiat currencies directly from the bank. The wallet also has a very intuitive UI (user interface) that makes managing the native assets easy and fast.
  • Rippex
This is a Brazil-based wallet that allows users to make direct transactions with very low transaction costs. The wallet comes with advanced functions that include multi-verification processes, transactions transparency, advanced privacy, and full control. Besides, it also supports multiple cryptocurrencies and guarantees users of very fast transactions.

The wallet you select is the most significant determinant of the stored XRP security. In many cases, loss of the wallet means permanent loss of all the stored XRPs. To keep your cryptocurrencies and wallet safe, it is important to follow the following best practices.

  • Only use the same computer to access your XRP wallet.
  • Make sure not to share the private and public keys with anyone.
  • The moment you get the wallet, ensure to back it up to make it easy to recover in case of a loss.
  • If you opt to use the hardware wallet, consider acquiring them in pairs and keep one under lock and key.

Where to Buy Ripple with Credit Card?

Notably, there is no direct way to buy Ripple with Credit Card. This means that you must use an exchange that accepts credit card to make the transactions on your behalf. First, you need to ensure that the credit card is well loaded with ample funds and the provider accepts such payments.

The second step is selecting an appropriate exchange that accepts payment with credit card for XRP. Note that picking the market should be extended to reviewing its security, fees, and ease of use. You might also need to look at the clients' feedbacks over the recent past. Here are some examples of places where to buy XRP with a credit card.

  • BitPanda
This is an Australian cryptocurrency brokerage that allows users in Australia, Far East, and most EU countries to buy Ripples with credit cards.
  • CoinMama
This is one of the top exchanges that have a presence in most countries. It allows users to exchange Bitcoins with credit cards. This indicates that you have to first buy Bitcoins before using them to buy XRP.
  • Coinbase
This is one of the largest exchanges and crypto wallet that is based in the US. It is perhaps the easiest way to buy XRP with your credit card. First, you have to buy Bitcoins, or Ether and use a different exchange such as Changelly to buy XRP because Coinbase only trades Bitcoin, Ethereum, and Litecoin.

Where to Buy Ripple with PayPal?

The moment the term digital payment is mentioned, what comes to the mind are services such as PayPal. However, these are only services that allow people to transfer actual cash they have in their accounts. It is because of this link to personal cash in the bank that PayPal is widely used especially in online stores. Therefore, can you use PayPal to buy Ripples?

There is no direct way to buy Ripples using PayPal. If your funds are in PayPal, you are required to first convert to Bitcoins before buying Ripples in an exchange such as Poloniex or Changelly.

How to Buy Ripple with Wire Transfer?

While a lot of banks work closely with Ripple to facilitate the transfer of funds from one point to another, it is surprising to note how cumbersome it is to buy Ripples using wire transfers. Indeed, there is no direct way that a person can buy XRP using wire transfer. The best method is first to identify an appropriate exchange that accepts wire transfer for payment and buy other coins such as Bitcoin. Then, use the coins to buy XRP.

The process is usually lengthy because most exchanges insist on checking whether the account has ample funds before transferring Bitcoins or other altcoins. This means that it could take days before a transaction is over. In other cases, some banks might decline to make payments to exchanges especially if such markets have been associated with fraud. Therefore, you might be required to use an alternative method such as credit cards. Some of the top exchanges that will accept wire transfers for Bitcoin include the following.

  • Poloniex.
  • CoinMama.
  • Bitfinex
  • Coinbase.
  • Changelly.

Where to Sell and Trade Ripple?

Many people entering the cryptocurrency market want to take advantage of the emerging popularity. After purchasing Ripples, you can start trading them for fiat currency as well as other cryptos. To sell and trade ripples, you need to pick an appropriate market. These are exchanges that allow users to trade the cryptos based on the market value.

Picking the right place to sell and trade ripples

As more cryptocurrencies enter the market, a lot of crypto exchanges have also emerged. However, the exchanges have become an easy target by hackers to drain their clients as cryptocurrency networks work to seal all visible loopholes. Here are some great tips on selecting the best exchanges.

  • The selected market should not have a hacking history.
  • Only go for an exchange that charges low fees to avoid draining all the ripples during transactions.
  • Identify an exchange that allows users to trade Ripples for multiple cryptocurrencies and fiat.
  • Pick the exchange that; is easy to use and has a responsive support.

How Much Are the Transaction Fees of Ripple?

The fees vary based on the institutions involved. The transfer rate settings in the Ripple ledger allows the sending institutions to charge clients a transfer fee for sending funds. The sender is charged a small fee based on the total currency being transferred, while the recipient is not charged. The fee goes to the issuing address or the sending institution. However, the transfer fee is not applicable when receiving or sending currencies directly to and from the issuing account.

To understand the application of transaction fees on Ripple, let us take an example. A "bank X" has set the transfer fee of 0.5% for all issuances. Therefore a sender using bank X to send 2 Euros, he will have to pay a transaction fee of 0.01 euro. This means that the sender must deposit 2.01 euros before the transaction can commence.

Once the transaction is through, bank X outstanding obligation on the Ripple Blockchain will have decreased with 0.01€. It will, therefore, not have any need to hold the amount in the Ripple account backing its ledger issuances.

Ripple Markets

Since its entry into the crypto world in 2012, Ripple markets have continued to grow. These are places where users are allowed to trade Ripples for other altcoins and fiats. As Ripple grew to reach the top ten cryptocurrencies, even exchanges that were previously hesitant to allow it have opened their doors. Here are some of the top Ripple markets you should consider.

  • Poloniex
This is one of the top digital ripple markets today. It has a very secure platform that makes trading direct and reliable. Though its UI might look complex to new users, it is relatively easy to follow the performance of Ripples and other cryptocurrencies in order to make a move at the right moment.
To prevent users' Ripples from getting hacked, Poloniex secures them in cold storages. In the vent of an attack, your coins will be safe. Its customer support and a full-time monitoring system provide another layer of security to keep clients away from hackers.
  • Kraken
Kraken was established in 2011 with the main objective of trading Bitcoins. But it grew with time as more cryptos entered the market to allow Ripples, Monero and other top altcoins in the system. The market provides great exchange rates, and the transaction fees are also low. It also provides progressive review and crypto trading metrics for users to understand the target markets and make the right decisions on the crypto to trade for Ripples.
  • Bitfinex
Bitfinex is probably the most advanced exchanges on the market today. It is designed with a great UI that makes it easy to follow your wallet from the dashboard and trade the Ripples with ease. More people prefer Bitfinex because it does not have limitations on traders and users can trade Ripples for fiats or other cryptos.

Value of Ripple

When Ripple was founded, the lead team made some long-term goal of growing the crypto to become the most valuable in the industry. This is what has been driving them for the last five years. Ripple value remained very low as more people treated it with great suspicion. The cryptocurrency community saw Ripple as a completely centralized network because it did not allow mining, only worked with a few vetted nodes, and targeted banking institutions.

However, the approach used by Ripple appears to be bearing results because of the progressive growth of XRP value and market capitalization. The cryptocurrency has grown progressively and entered the top ten most valuable cryptos in the market.

In the first 15 days of December 2017, Ripple value continued to rise and hit a high of $0.4. This was the highest mark in the history of the cryptocurrency. This trend is expected to continue as more people develop the interest in the cryptocurrency and buy XRP.

Despite this growth, it is still far from the top cryptocurrency, Bitcoin, whose price has hit the roof in the last quarter of 2017. At some point, the value of Bitcoin reached $17,000. Though Ripple is progressively growing with the current market capitalization of $1,668,920,000 and a total of 38.7 billion, there is no doubt that the lead team has a lot to do to keep with growing and competing with other giants such as Ethereum, Bitcoin Cash, and Litecoin.

Is It Profitable to Invest in Ripple?

When people think of investing in cryptocurrencies, the first thing that comes to their minds is picking the top cryptos in the market. However, investors have been told to look beyond the current price surge and target the emerging cryptos that have a better foundation. This is where Ripple stands tall compared to other cryptos in the market.

Currently, the value of Ripple is growing. However, the growth is far less compared to other top competitors such as Ethereum and Bitcoin. And a crucial thing to point at this instance is that you cannot mine XRP. When Ripple protocol was founded, a total of 100 billion coins that will forever exist in its network were created. 40% of these coins have already been released into the network while the Ripple Labs hold the remaining quantity for gradual release into the market. The labs indicated that it would release the remaining ones at a rate of 100 million coins per month.

Whether you opt to invest in Ripple or not, comes down to your thought of Ripple Labs’ ability to implement their go-to payment system. From the beginning, the Ripple team appears highly committed and focused on going all the way to hit their objectives. Therefore, the lights are green and you should not hold back. But it is always important to take a point of caution when dealing with cryptocurrencies. The looming regulation, fast emerging cryptos in the market, and market dynamics could easily cause the value of any crypto to take a free fall. Therefore, follow the golden rule; only invest what you can afford to lose.

The fast-rising value of Ripple indicates that the Ripple Network is a huge success and many people have developed trust. The cryptocurrency community has been referring to the current phase of Ripple as the incubation session. Just like Ethereum took time before investors built trust, the chances are that Ripple value will explode in the coming months. Therefore, it is a great idea to place your investment and wait to see it grow in this highly optimistic network.

Another thing that makes Ripple a worth investment is the investment opportunity. As banks get pressed to the edge, they are turning to cryptocurrencies and acquiring digital assets in large quantities. Ripple has so far managed to get very many institutions to join its network. As they inject cash, XRP is likely to continue growing and surpass its top ten peers. Whether you only hold one XRP or hundreds, every institution that joins Ripple will help you to gain significantly.

While other cryptocurrencies appear strongly opposed to government regulation, the approach taken by Ripple is different. The lead team has all along insisted that it is willing to work along the laid down structures. Its commitment to assist the government as it focuses on drafting the rules of the crypto world can only mean that Ripple will easily comply and avoid the shock that awaits others. Therefore, it is better to place your investment where chances of conflict are low or minimal.

Today, we are in the era of blockchain technology. Therefore, do not be left behind when it comes to investing in them. Make sure to pick high potential cryptos such as Ripple that has demonstrated the capability to grow progressively and deliver higher ROI (return on investment). While ripple is truly not a crowd favorite especially in the Bitcoin community, it has a huge potential in the coming years.

Where to Spend or Use Ripple?

For about 10 years, cryptocurrencies have grown tremendously. However, many people are still to understand what they are, how they operate, and accept them as a means of payment. In fact, even most of the people getting into cryptos today indicate that they want to invest as the value keeps growing.

Ripple, just like Bitcoin is fighting for recognition by improving its network and working on new partnerships. This has continued to open new avenues where Ripple can be used to do shopping. If you have some ripples and want to spend them, here are some of the traders who accept them.

  • Cryptomacado.
  • GameServers.
  • HempUSA.
  • Earth VPN.
  • Crypto Jeweler.
  • Fauceting.
  • VapoShop.
  • RChemLabs.
  • Trebaltek.

Can Ripple Grow to Become a Major Payment Network?

Yes, it can. Ripple is perhaps the only cryptocurrency network that has read the signs of the times well. Unlike Bitcoin and DASH among others, Ripple has a unique way of looking at the cashless payment system. While other crypto networks have been hasty to launch new networks that look almost similar and offer the same products, Ripple Labs team did their assignment and focused on facilitating payments through the current financial institutions. This is what will make Ripple bigger and ultimately the main payment system.

  • Ripple targets financial institutions
By targeting financial institutions, Ripple has cut itself a great share of trust that such organizations carry. This means that even if a bank client wants to send cast from point A to point B, the bank will use the Ripple network to complete the transaction faster and at a lower cost. This indicates that more people will be using Ripple even without knowing it.
  • The Ripple Labs insists on regulations
While other cryptocurrencies have demonstrated that they are going against the grain, Ripple has come to the rescue of financial institutions and indeed, even governments. Before Ripple networks came to the fore, most governments viewed cryptocurrencies with suspicion. They saw the new blockchain technology as a method of stripping them off a major source of revenue. Because Ripple is strictly adhering to the laid rules, it will continue growing even after the looming regulations come to work.
  • Most banks consider Ripple a partner and not a competitor
The fact that more banks and institutions are using the Ripple network means that they will exploit synergies to move to the next level. Most banks are willing to go an extra mile in helping Ripple succeed as a payment network compared to other cryptocurrencies. Ripple becomes the ultimate powerhouse for a win-win situation for all banks.
  • The cryptocurrency does not focus on trading
Recently, the cryptocurrency community appeared angered by the model adopted by Ripple. Because Ripple does not allow mining and also discourages people from holding the coins, people with a short-term goal of buying and trading were shocked. However, Ripple lead team believes that its target of facilitating payments can only be achieved by removing all the bottlenecks.
By removing the mining requirements and all the logistics that come with it, all efforts are directed at supporting the payment network. This is one of the key reasons why ripple value continues to rise especially in the recent past.
  • The lead team’s capability has been tested and proven right
The entire Ripple lead team is perhaps the most experienced in the cryptocurrency industry. Even though Bitcoin pioneered the cryptocurrency space, it should be considered correct to say that Ripple was also on the same race but arrived later. Since 2004, the Ripple lead team was deeply involved in currency exchanges and computing. The goodwill and commitment to make payment easy and direct are winning new clients. This will make the network to become the ultimate payment system.

While these efforts are remarkable and place Ripple right ahead of others, the industry is unfolding rather fast. It is very difficult to predict what will emerge in the next couple of years. If new disruptive technologies emerge today, Ripple will face monumental competition in its quest to become the leading payment network.

How Does Ripple Work?

Ripple has cut a name as a digital payment protocol rather than a cryptocurrency. While most cryptocurrencies work through mining, Ripple operates differently. Therefore, how exactly does Ripple operate?

A demonstration of how the Ripple model works

To understand how the system operates, let us take an example. Emily wants to send $1000 to Nelson who resides in a different town. Therefore, Emily gives a local agent (Mary) the cash to send to Nelson and also provides a password that Nelson should answer correctly.

Mary (Emily's agent) alerts Nelson's agent (Stanley) about the transaction details, funds to be sent, and the password. These are the details that Nelson must answer correctly to his agent (Stanley) to get the $1000. Notably, the $1000 that Nelson gets comes from that agent's (Stanley) account. This means that the sender's agent (Mary) owes the recipient agent (Stanley) $1000.

Now, the recipient's agent can make entries that the sender's agent is required to clear at a specific time. The funds can also be settled if a similar transaction originates from the opposite direction.

Trust is at the core of the network

While the outlined example is a simplified model of how the system works, the Ripple Protocol is indeed more complex. From the example, you can see that trust is a very important component when it comes to the ripple system. The sender, recipient and two agents must all trust each other to make the entire system functional.

Now, Ripple utilizes mediums called Gateways that act as the main link pin the entire trust-chain between the transacting parties. The gateways, in this case, form the credit intermediaries (the agents in the case of above example) that receive and send funds to specific addresses on the Ripple Network. Any business or individual can register with the Ripple network to serve as a gateway that authorizes him/her to act as a middle-entity for currency exchanges, transferring payment and maintaining liquidity in the network.

The digital currency on the Ripple network, XRP, serves as a bridge to other currencies. The currency does not discriminate between fiat currencies. This means that you are sure of easily sending cash to any country no matter the fiat involved. Notably, every currency on the Ripple ecosystem has its own gateway such as USDsnapswap, CADBluzelle, and BTCbitstamp among others. To make a transaction, it does not have to be in the currency that the target client wants. You can send in Bitcoin, and the client gets it in Canadian dollars. The multiple gateways must come to a consensus to complete a transaction.

Holding personal balances with respective gateways opens users to multiple risks that are common to the traditional banking system. For example, if the gateway fails to honor the liability of IOU (I owe you), there is a risk of losing the value of the money. To avoid the risk, users are encouraged to identify trusted gateways that can in return handle untrusted gateways. Note that the counterparty risk or linking untrusted to trusted gateways does not apply to altcoins such as NXT, BTC, and Ether.

Ripple applies consensus protocol to validate transactions

Unlike other cryptocurrencies such as Bitcoin and Ethereum that use proof-of-stake and proof-of-work, the Ripple network relies on consensus protocol to validate transactions. The consensus operates to improve the Ripple network's integrity by preventing double spending. For example, a Ripple user can initiate a transaction using multiple gateways and send $100 to different recipients. In such a case, the nodes in the network will agree by consensus the transaction that was initiated first. These confirmations take only about 5 seconds. Because the decisions are not made by a centralized authority, it qualifies to be a decentralized model.

Ripple system tracks all IOUs in any currency for every gateway. The IOU transactions, as well as balances, flows that take place between various Ripple wallets are available in the consensus Ripple ledger. Note that though the history is accurately captured on the public ledger and available, the data is not linked to specific account or ID of a specific user/business. Despite this, the public dealings still make the info involved highly susceptible to deanonymization activities.

Ripple took the traditional banking models and improved on their operational model. The transactions on the Ripple network are cleared in seconds. This is different from banks that previously took days to complete via wire transfers. The cost of making transactions on the network is set at 0.00001 XRP which is very little compared to what banks charge.

Does Ripple Use Blockchain Technology?

The application of public ledger Ripple

Ripples network uses the blockchain technology. The peer-to-peer ledger uses nodes that are distributed across the network to help in validating transactions. The ledger is updated, and a new block created every couple of seconds.

The blocks are identified using their sequence numbers that are also referred as ledger index. The numbers are designed incrementally. The set of transactions added into the ledger are carefully created to allow auditability of the history.

Once transactions appear in the validated ledger, it means they have succeeded in altering the ledger or were processed without an action. A successful transaction contains a tessSUCCESSFUL code that points to the changes and involved fee. Other transactions that did not change include the tec-class codes that point the transactions only claimed the fee but did not have changes. The main reason for tec-class transactions is because they alter the account balance when making claim for a fee.

The Ripple blockchain also includes tem, ter, and tef codes. These codes indicate provisional failures that are given by specific API calls. However, the three failure codes are not captured in the Ripple blockchains.

The XRP blockchain protocol and consensus

When you decide to join the Ripple network, it is important to distinguish between transactions proposed for inclusion in the ledger and validated transactions that are actually added to the ledger. It is only the validated transactions added to the ledger that are immutable.

The peer-to-peer XRP blockchain comprises of distributed servers referred as nodes. These are the nodes that process and validate transactions. The client’s application for a transaction is sent to the nodes that repay the request to the network for validation. This means that clients’ applications include mobile or web wallets, gateways to specific financial institutions, and electronic trading platforms.

The XRP nodes that receive and process transactions can be of two types; validating or tracking modes.

  • The tracking nodes are used for distributing transactions to clients and responding queries about the blockchain.
  • Validating nodes also track the transactions but extend to advancing the ledger sequence.

When accepting transactions that are submitted by clients. The tracking nodes use the latest validated blocks as the beginning point. The accepted transactions become candidates. The nodes send the candidate transaction to the entire network for comparison to the last transaction while factoring the availability of funds in the sender’s account.

XRP ledger utilizes consensus to avoid double allocation and maintain the integrity of the blockchain. The nodes in the XRP network share all the details about the candidate transactions and agree through consensus about specific identification and transfer details. Consider consensus as an interactive process where proposals are evaluated by all nodes. They communicate and update these proposals until a majority hits an agreement. Every node assesses proposals from validators that are trusted not to defraud the network.

Note that a candidate transaction that fails to be included in the immediate block or public ledger is required to wait for the next round of consensus. But some could fail and become ineligible even in the subsequent round of consensus.

The validating nodes calculate the new versions of the ledger and send the results (signed hash) referred as validations that allow other nodes to compare the details with what peers have. This means that thousands of nodes are working on the same results that are subsequently compared to validated or rejected candidate transactions. If there are differences on the signed hashes from different nodes, the ledger is disregarded. Besides, if a supermajority agreement on validations is achieved, it implies the transaction volume was too high. Therefore, the latency was too great for consensus procedure to generate consistent proposals and the nodes have to repeat the consensus process.

The XRP ledger automatically adjusts the transaction cost as well as the time that one should wait for consensus before a transaction is validated. Note that this could be a few seconds to minutes because blocks in Ripple are processed rapidly.

The difference between Ripple blockchain and Bitcoin blockchain

While Ripple and Bitcoin blockchains use the peer-to-peer model to validate transactions, Ripple Labs took theirs a step further to reduce the risk of fraud. Here are other differences between Ripple and Bitcoin blockchains.

  • XRP operates on a type of internal blockchain and not a completely public blockchain. Instead of using public blocks like in Bitcoin, all transactions are peer-to-peer.
  • XRP does a lot of tracking of user information during the validation process. However, Bitcoin only tracks the pathway of the native BTC to establish whether the user has the funds to spend.
  • XRP does not use proof-of-work that is applied to Bitcoin. This means that there is no direct reward for adding new blocks.
  • No hashpower is involved when confirming transactions. This is means that any node can validate a transaction instantly.
  • Like Bitcoin that uses nodes to release new coins, XRP does not have a reward. The Ripple Labs generated a maximum of 100 billion coins that it releases progressively into the network. However, Bitcoin created 21 million coins that are released through mining.

Mining Ripple

Notably, you cannot mine Ripple. When Ripple was formed, a total of 100 billion XRPs were created. This means that only the 100 billion coins will ever exist in the network. Though XRPs are not minable, the network has announced it will release an incentive program for users in the network.

Ripple strongly focuses on selling the software to financial institutions and agents that serve as intermediaries. However, individual users can still buy XRP though exchanges that trade them. More markets are emerging after XRP’s continued growth and hitting top ten most valuable cryptos in the market.

The focus on financial institutions by Ripple has made it get somehow sidelined by other cryptocurrencies. There is a general perception in the crypto community that Ripple is a centralized crypto. Therefore, the chances are that you might be forced to convert to fiat before purchasing other crypto assets.

If you strongly believe that mining is the best way to acquire Ripple, the best method is mining an alternative cryptocurrency such as Bitcoin and using the coins to buy XRP. However, you will still have to go through an appropriate exchange such as Poloniex.

What Are the Advantages of Ripple?

If you have been considering joining cryptocurrency world, Ripple is no doubt a great option for you. Here are the main advantages of Ripple.

  • Ripple has one of the most robust compliance controls in the cryptocurrency world. This means that it is edging closest to meeting the current legal guidelines for financial institutions compared to other cryptocurrencies. For investors, this is good news because they can buy Ripple Coins without worrying that looming legislation will affect their investment negatively.
  • Unlike Bitcoin that works as a competitor to banking institutions, Ripple has come to enhance them. This is the reason that most banks and financial institutions have found solace in the Ripple network. The large number of banks joining the Ripple network indicates that its value can only grow with time.
  • The Ripple system is asset-agnostic. This means that it allows users to transfer other cryptocurrencies in its network. For example, you can move Bitcoin or even fiat currencies using Ripple network. You will be surprised to realize that using Ripple to send other currencies such as Bitcoin is actually cheaper than using the Bitcoin network itself.
  • Ripple has the fastest settlement time in the crypto world today. It can sustain up to 1000 fully settled transactions for every second. The zero-latency transaction with the PayChan feature makes it easy to complete transactions faster because of near-infinite scaling.
  • The Ripple Labs is led by an enthusiastic team with over 15 years of experience. While other people point that Bitcoin is better because of the current high price, the Ripple Network focused on creating unique infrastructure that would ultimately make it more valuable than most cryptocurrencies in the long-term.
  • Though Ripple is not as old as Bitcoin, its value and capitalization have been growing steadily. This has made it shoot to the top ten most valuable cryptocurrencies.
  • The risk of getting involved or associated with scammers is very low because of the thorough verification procedure. The Ripple network is like an extension of the banking system. This means that users are exposed to strict verification procedures when making payments that help to keep scammers and fraudsters away.
  • Because of the close association to conventional banking systems, Ripple users have developed a lot of trust in the system. This has also given Ripple a boost for faster growth in the Cryptocurrency community and even outside.

What Are the Risks of Ripple?

While Ripple finally looks like the ultimate cryptocurrency, the crypto community thinks otherwise. There is a large number of users who feel that Ripple is a centralized network that only allows a few nodes or servers maintained by large organizations. Some even prefer calling Ripple the extension of banking ecosystem. Therefore, what are the risks involved in investing in Ripple?

  • Ripple Labs does not advocate for users to speculate. Issuing gateways do not have to accumulate or even exchange Ripple Coins. Users are only required to hold the ripple coins that they want to send in the network. Private exchanges and liquidity providers can opt to hold more Ripple Coins for trading but not targeting the price to grow.
  • Ripple Labs holds the largest percentage of the total XRPs for release and can dump them at will. Unlike Bitcoin or Zcash among others that have definite coins with most of them being released in an arduous algorithmic process, Ripple Labs does not allow mining. However, it will release the remaining coins at will. By the end of 2021, it is expected that 50 billion XRP will have been released into the network. This could affect the overall value of Ripple in the market and even cause investors huge losses.
  • Only a very limited quantity of Ripple is in the hands of crypto investors. Most of the XRPs have been distributed through incentives to liquidity providers and development deals. Others include institutional buyers as opposed to private investors. This means that only a few entities determine the actual value of Ripples in the market. If one entity pulls out, the value could easily tumble.
  • Many people do not associate with Ripple. While the strength of any cryptocurrency is the number of people using its network, Ripple does not appear rush to draw such large traffic. This could actually work against Ripple in the long run as more people turn to other networks that are completely decentralized.
  • The level of anonymity in Ripples is very low. Unlike other cryptos such as Zcash that have been working extra hard to drive anonymity to the next level, Ripples subjects users to multiple and direct third parties that can easily unmask user’s identities.

What Happens if Ripple Gets Lost?

When you buy XRP and store them in an appropriate Ripple wallet, it is important to appreciate that they can get lost. This is why everyone must protect them with zeal. It is the reason digital wallets insist that users must always protect the private keys and maintain backups for easy recovery in case the wallets are lost.

Things that can cause the wallet and XRP to get lost include;

  • Formatting the drive that the wallet is installed in.
  • Loss of the computer or phone with the XRPs.
  • Hacking and draining of your XRP by a cybercriminal.

If your XRPs are lost because the private keys have been lost permanently, it means that the coins will always stay in the network. Unlike cash that can be accessed and used by another person, cryptocurrencies only reside in the respective networks. Therefore, your coins will still be in the network but in a dormant state.

In the event that another person stole the coins, they will cease to be yours. The XRPs will still be in circulation but impossible to link to the original owner. Like other cryptocurrencies, it is important that Ripple users are extra cautious by triple checking the addresses before flagging off payments.

Ripple Regulation

Regulation of cryptocurrencies in the world remains fluid to date. Most countries look at cryptocurrencies with a lot of suspicions. Unlike the conventional banks that provide direct revenue to governments, cryptocurrencies are seen as an avenue to deny governments the tax needed to run their economies. This is the reason that most countries have been banning major activities such as ICOs (initial coin offerings) associated to cryptos. But Ripple is a different type of currency altogether.

Ripple Labs holds the view that government regulation is actually a good thing. The lead team believes that regulation will help to attract more into the industry and make all to enjoy associated benefits. This is what has turned Ripple into an important asset for governments that are working on cryptocurrencies regulations. Here is a closer look at Ripple regulation.

Internal regulations in Ripple

Ripple operations are guided by two levels of regulation. The internal regulation that is guided by the Ripple protocol defines the relationship between Ripple and all the nodes. The protocol determines how servers must relate and operate in conjunction with Ripple to facilitate faster payments.

The main target at this point is turning servers into trusted nodes that can confirm candidate transactions on the Ripple network. If a client is sending cash from the US to a recipient in Brazil, two supporting gateways in the countries must operate in harmony and trust each other after the client deposits the cash to be relayed. This means that the recipient will get cash within seconds though, in the real sense, the cash will not have reached the target point of distribution.

Building this trust and creating consensus is perhaps what has been giving Ripple Labs the biggest challenge. However, more institutions are joining and becoming part of the network after understanding how it operates. The fact that more banks do not see Ripple as a threat is being considered as an extension of the banking platform. There is a possibility that Ripple could ultimately transform into a new platform for international payments while meeting all the set regulations.

The main Ripple’s target is the distributed ledger

Recently, the governments of China and EU administration were brushed the hard way by the fast-rising number of ICOs (initial coin offerings). China had to ban ICOs in its jurisdictions. Other countries such as Russia and EU have cautioned their citizens that most of the ICOs are indeed scams and could end up causing huge loses.

However, Ripple has approached regulations with the main focus on enhancing the blockchain ledger platform. In the view of the Ripple lead team, the blockchain technology is a trillion-dollar problem. This means that if implemented appropriately, blockchain technology can help to connect banks, payment providers, and currency exchanges in a different way.

Ripple wants to become the first network to offer banking services differently. Though they have often found themselves on the receiving end after their blockchain conflicts with the current laws, their focus on operating within the law is impressive. In 2014, Ripple was fined $700,000 dollars for going against the Bank Secrecy Act. However, it is the Ripple’s network response to the case that points its resolve to operate in its commitment to operate within the law.

Ripple Labs explained that it agreed with the verdict and that it would redefine the systems to operate in a more compliant way. Now, more governments have made Ripple a case study on the best way to allow banks work with blockchain technology providers without flouting the rules.

Ripple regulation is seen as a new chapter in the crypto world. It is now clear that the much-awaited regulations might have a clearer guideline. The cryptocurrencies do not simply have to be viewed as direct threats to banks and governments. Rather, Ripple's regulation has demonstrated that they can thrive to complement each other and bolster growth at financial institutions and government levels.

Is Ripple Legal?

Ripple is legal in most countries. As more than 1100 cryptocurrencies enter the market in less than 10 years, the publicity has reached the highest possible point. Whether it is an investor or simply a user, one concern that is never far away from users’ minds is whether Ripple is legal.

Questions that keep ringing in mind include; Will the government censure the cryptocurrency of choice with my native asset in it? Will I be charged in a court of law for using cryptocurrencies? Is the cryptocurrency registered? Because regulation of currencies is dependent on individual countries, let us look at the legality of Ripple in respective jurisdictions.

  • The European Union
In the EU, Ripple is legal. The EU has not installed any legislation regarding the status of Ripple. However, the giant union has indicated that VAT is applicable when converting between fiat and Ripples. VAT is only applicable when Ripple is used to paying for services and products. In particular, the EU Court of Justice ruled that cryptocurrencies such as Ripple should be treated as virtual money and should be exempted from paying VAT.
Though EU central bank views the cryptos differently, other countries hold the view that the current rules that govern fiat currencies can still be extended to cryptocurrencies. This is particularly considered possible because Ripple is providing most banks with an extended platform for faster, safer, and better transactions.
The European Union parliament has already floated a proposal to establish a task force for monitoring cryptocurrencies, especially those that are compliant such as Ripple to crafting appropriate legislation.
  • The US
Ripple is legal in the US. While Ripple has presented itself as a cryptocurrency with an open public ledger, its close association with banks makes it carry an additional face. In 2015, the US administration found Ripple to have broken the Bank Secrecy Act and penalized it. This means that Ripple is bound by the same act.
If Ripple sticks to the transactions based on its native asset, XRP, it means that it is not subject to any regulation. Outside the Bank Secrecy Act, Ripple is treated as a commodity. The Commodities Futures Trading Commission ruled that cryptocurrencies must be considered commodities.
  • Israel
The Israel Tax Authorities explained that Ripple and other cryptocurrencies cannot be categorized as currencies. Therefore, they fall outside the financial security realms. However, cryptocurrencies such as Ripple remain taxable. Every time that a client sells XRP, a capital gains tax of 25% should be paid. Traders involved in XRP and other cryptocurrencies are also required to pay an income tax of 17%.
  • China
Though Ripple operations in China are legal, Ripple Labs has had a bumpy ride because Chinese administration does not want anything that can compromise its ability to collect taxes. China requires banks to avoid handling cryptocurrency transactions. But Ripple blockchain' has created a unique sense of trust that helps banks raise the efficiency of their operations within the established legal framework. For example, the banks joining the Ripple framework in China are not interested in the provided high level of anonymity, but using the network to make transactions faster and cheaper. Therefore, they are able to achieve this without compromising the laid legal framework.
  • Russia
In Russia, Ripple and other cryptocurrencies are legal. The government has indicated that it is not willing to regulate the cryptos. However, it has pointed that depending on the nature of transactions, accepting Ripples could be considered illegal.
  • Hong Kong
In Hong Kong, Ripple is legal. The Hong Kong Secretary for Financial Services and Treasury has put it clearly that the jurisdiction does not have direct legislation for Ripple and other cryptos. The secretary directed that Ripple should be considered a commodity. It also strongly pointed that anyone involved in money laundering and fraud would be prosecuted.

While Ripple is legal in most countries globally, it is clear that most governments feel threatened by the fast rise in cryptocurrencies. They see the cryptocurrencies as a direct threat to existence because the sources of revenue collection are compromised completely. Therefore, if you want to join Ripple, it is important to appreciate that regulations are looming. Most countries are at advanced stages of drafting rules that will guide them in regulating cryptos.

Ripple and Taxes

What are my tax obligations when I use XRP? Though many people argue that trading or using cryptos is completely anonymous and cannot be noted, the argument is only half true. Today, cryptocurrencies and associated income are not exempted from taxation. As governments continue working on new regulations, the status of cryptocurrencies is likely to change.

Tax experts recommend that people trading on the Ripple network should capture their transactions and make appropriate deductions to the tax authorities. The US Commodities Futures Commission classified cryptocurrencies as commodities. This means that you need to make appropriate deductions after selling XRP or other cryptos. In Israel, the government is categorical that you must make the necessary remissions after trading the cryptocurrency asset.

Though Ripple is committed to ensuring that users operate within the law, how one handles the XRP held in a personal wallet is outside its jurisdiction. For example, if you sell XRP for Bitcoins, XRP will not be responsible for your failure to make appropriate tax deductions.

The emphasis that people pay taxes after selling XRP is the same from the Caribbean to Europe. Therefore, how do you remain on the right side of the law by taking an appropriate view on taxes when trading Ripples?

  • Make sure to capture the transactions appropriately and the resulting figures.
  • Treat any revenue to be taxable. Though the law might be silent at the moment, the chances are that the situation will change over time.
  • Ensure to capture the actual value of XRP in the local currency during the time of treading. This can help you to avoid paying taxes on a different rate especially when the fiat currency value goes up.
  • Seek help from an expert on how to capture taxes when trading on XRP.

Does Ripple Have a Consumer Protection?

One notable thing about Ripple is its open nature of the lead team. While other cryptocurrencies such as Bitcoin operate in great secrecy, Ripple has never shied from revealing its leadership. Since inception, Ripple has always kept its leadership in the public light. The highest level of consumer protection at the moment is the Ripple Labs.

The lab has been the main source of operational codes for the ripple peer-to-peer network. However, the consumer protection offered by the company is limited to ensuring that the gateways understand and apply the network’s regulation.

  • Ripple Labs ensures that the network integrity is maintained all the time. They guarantee this through progressive review and release of new codes that operate on the network.
  • They progressively enlist new gateways such as banks and financial institutions that ensure all transactions are completed with absolute trust.
  • While as many nodes as possible are free to join the network, only the trusted ones can validate transactions. This means that users enjoy a higher level of protection compared to other networks.
  • Ripple insists on operating within the established legal framework. It is particularly committed to scrutinizing transactions and ensuring scammers are kept off the network completely.

While Ripple takes drastic measures to protect its clients, the network still operates as a peer-to-peer model which means that transactions are still irreversible. Therefore, if you provide the wrong address when making payments, the XRP you send will be lost forever. They cannot be recovered.

The biggest role of staying safe when using the Ripple network rests on you. Many people always come out indicating that their XRPs have been stolen or they cannot recover their wallets. It is important to pick the most secure wallet and ensure all the systems are completely secure. Besides, you should always maintain a backup in a cold storage such as hardware wallets or paper wallet.

Illegal Activities with Ripple

Many cryptocurrencies have become the haven for illegal activities because scammers and fraudsters want to remain anonymous. But Ripple has presented them with a rather open network that risks exposure. Most of the transactions involve sharing details such as personal address and other details with banks and enterprises that operate as gateways. This means that if you are a scammer, getting discovered will be very easy.

However, it is the emphasis by the Ripple management that it supports the identification of illegal activities in any cryptocurrency that might have rubbed scammers the wrong way. It has been interpreted to mean that every user is carefully scrutinized to ensure that no cash resulting from fraud and illegal activities passes through the network. No illegal activity has been reported within the Ripple network.

Is Ripple Secure?

Ripple is one of the most secure cryptocurrencies out there. As other cryptocurrencies work on making their systems more anonymous, Ripple’s efforts have been directed towards guaranteeing better payment and security to all the users.

The transactions at the Ripple network carefully vets all the validating nodes to ensure that only the trusted ones are used to verify transactions. This helps to lower the risk of getting the network and clients attacked. In most of the cases, the selected Ripple gateways are banks and other financial institutions that do not compromise on their clients’ safety.

By encouraging people to only hold XRPs for transactions as opposed to speculation, Ripple has wisely defused the strong urge by attackers who might target people or institutions with large quantities of XRP. Though they can target gateways such as banks, they will have to deal with a new layer of protection.

The details captured and used to update the public ledger in the Ripple network are very thorough. The consensus works extra hard to ensure that extra scrutiny is done on all transactions to avoid the danger of hacking and related losses. Though this often comes at the expense of anonymity, it has helped to make the network extra secure.

While the network remains extra secure compared to its peers, there is no doubt that attackers are getting smarter. Therefore, users must take extra measures to ensure that their XRPs remain secure all the time by keeping them in cold storage when not in use.

Is Ripple Anonymous?

While Ripple claims to be anonymous, its system has made the crypto community to doubt how effectively the system is. Once a client decides to use the network, the system operates just like a bank though at an advanced level. The nodes share a lot of information about the transaction before they can verify them.

The level of anonymity in the Ripple network is at par with what Bitcoin offers. Every time that a transaction is completed in Bitcoin, strains of the transactions are left such that people can easily follow back to know details such as specific personal address and names. For people who want to maintain their operations completely anonymous, it is advisable to consider other networks such as Zcash and Ethereum.

Has Ripple Ever Been Hacked?

Since Ripple was founded, there has been no report of hacking in the network. One of the main reasons that Ripple has managed to attract a lot of interest is its capability to offer bank-level security for all transactions. Ripple Labs works tirelessly to keep the system up-to-date with new codes. They follow the latest developments in the world of cryptocurrencies to prevent the network from emerging threats.

Because the Ripple network is not minable, it means that the risk of ever having over 51% of the coins under one entity is non-existent. Therefore, the chances of a single party working to sabotage the network security are very low.

Despite the huge efforts to keep users secure, it is very important to take extra caution when investing in Ripples or other cryptocurrency. The reports of past hacking in other cryptocurrencies such as Ethereum mean that no network is completely hacker-proof. Therefore, do not put all the investment in Ripple. Try to spread across different cryptocurrencies and where possible, store the altcoins in cold storage.

How Can I Restore Ripple?

One of the main risks of using cryptocurrencies is that transactions are anonymous and irreversible. However, if you lose your Ripple through loss of the wallet, it is possible to restore it if a back up had been secured.

Most cryptocurrency wallets have drafted ways of securing clients wallets in case they lose them through hacking, formatting the drives, or getting their phones stolen. Therefore, the process of recovering lost ripple will depend on the respective Ripple wallet.

If you had stored a backup of the hardware wallet, it would be as simple as acquiring another wallet and reconciling the details to restore the Ripples. In many cases, people prefer to acquire hardware wallets in pairs and keep one under lock and key as a backup.

For Ripple users who go for desktop wallets, a backup in a paper wallet or the cloud is very crucial. You will simply need to get another wallet and reconcile it with the backup to acquire the Ripples back.

Web-based wallets are perhaps the simplest to use for recovering lost Ripples. Because the provider manages the control of the private and public keys, you simply have to prove that the wallet was yours to recover lost ripples. It is the same way that a person can recover an email address.

Why Do People Trust Ripple?

Since Ripple entered the crypto world, the main target was presenting to people a new way of handling transactions. The financial and computing experts brought a wealth of knowledge from previous ventures such as eDonkey and E-Loans. From successes in previous ventures, Ripple concentrated in building trust that helped the XRP value continue growing rapidly. Here are the main reasons why people trust Ripple.

  • It works closely with conventional banks. Today, there is nothing else that people trust with their cash like banks. As legal entities, many people feel that Ripple carries the same trust by working with banks. For example, all the banks that have inked agreements with Ripple bring aboard their followers.
  • Though Ripple is a cryptocurrency that falls in an industry that is not regulated, Ripple Labs ensures that it strictly follows all financial regulations. Many people want to feel that they are dealing with a legal entity. People feel more secure when using Ripple compared to other cryptocurrencies such as Bitcoins that are at risk of getting shocked by looming cryptocurrency regulations.
  • Ripple has been growing rapidly. It has recently entered the top ten most valuable cryptocurrencies. People want to move with the brands whose crypto assets are growing in value. Since its inception, the value has grown progressively and reached the top ten most valuable cryptos in the market. This means that XRP is a great crypto asset to invest in.
  • It provides the best model for sending any cryptocurrency and fiat currency. While other cryptocurrencies such as Ethereum provide a very large number of products, Ripple is highly specific. The main objective is ensuring that users can send and receive funds as fast as possible. The narrow mandate has made it easier for Ripple to deliver better results and win users’ trust.
  • The system provides bank-level security, especially when making payments. People want to be associated with highly secure systems. For the five years that it has been in operations, it does not have a history of attacks. The focus of providing bank-level security on top of the standard cryptography has made users feel that their funds cannot get lost.

History of Ripple

To understand Ripple well, let us go back to where everything began and classify the entire progress into three key stages.

Phase One (2004-2012): The early development

The earliest point that one can associate Ripple with is 2004 when Ryan Fugger created Ripplepay (predecessor to Ripple). Ryan was a programmer based in Vancouver, Canada, who worked in a foreign exchange system. His intent was to come up with a monetary system that is completely decentralized with the capacity to allow communities and individuals establish their own cash.

Ripplepay brought about a new system developed by eDonkey network’s McCaleb, David Schwartz, and Arthur Brittol. In 2011 this expanded group started working on a digital currency where transactions could be verified through consensus on the network as opposed to the mining process. This means that XRP was a departure from the blockchain ledger (common blockchain) that was used by Bitcoin and other cryptocurrencies.

Ripple opted for a new system that targeted eliminating Bitcoin’s full reliance on the centralized exchanges. It also targeted raising the number of transactions that the network could handle every second and lower power requirements. To make this possible, the expanding team brought in Chris Larsen who had earlier on founded successful lending services referred as Prosper and E-Loan.

Larsen, McCaleb, Arthur, and David approached Fugger with the bigger idea of creating a cryptocurrency. Fugger agreed to join and grow the idea. The immediate product of the team was OpenCoin which they released in 2012. But it appears that things were just beginning to take shape.

Phase Two (2012-2013): The openCoin and transformation to Ripple Labs

OpenCoin debuted by starting a new payment protocol which they called the Ripple Transaction Protocol that largely borrowed from Ryan’s concepts. The protocol made it possible to make instant cash transfers between two parties. This meant that the Ripple Protocol was able to circumvent huge fees and wait time that characterized other banking models. It also pulled a surprise to many financial organizations because users could exchange the cash on multiple currencies including Yen, USD, Euros, RMB, Rupees, and Airline Miles.

In order to maintain the top-notch security of the transactions, Ripple protocol relied on the common security that was maintained and managed by independent validating users. Note that these are not like nodes (users) in other networks that operate independently to verify transactions. The servers were designed to be complex enough and could be owned by anybody including banks, exchange markets, and individuals.

The company also formed a digital currency called XRP. This is a cryptocurrency that works in many instances just like Bitcoin or Ethereum. The cryptocurrency allowed banks to make transactions such as transferring cash without waiting or incurring huge fees.

Some of the early OpenCoin investors included Horowitz Andreessen and Google Ventures. XRP Fund II (commonly known as XRP II) was registered as a company fully owned by OpenCoin with its headquarters in South Carolina. This incorporation also marked the day when OpenCoin was officially linked to Bitcoin through the Bitcoin Bridge.

The Bitcoin Bridge allowed users on the Ripple network to send payments using any currency to a Bitcoin address. Other early partnerships included companies like ZipZap. By the end of 2013, OpenCoin changed its name to Ripple Labs with the CEO being Larsen Chris. Ripple Labs continues to be the primary source of the network code for the whole consensus verification system that helps integrate banks and other financial institutions into Ripple. The partnership with ZipZap was particularly significant and thought it could become the deathbed for the Western Union.

Phase Three (2014 to 2017): Expanding the Ripple network by targeting banks

In 2014, Ripple Labs worked on a number of development projects that saw apps such as iOS client being released for iPhone and iPad users. This allowed users to send and receive any type of currency right on their phones. This app was later discontinued. Instead, Ripple Labs proposed another form of smart contract model referred as Codius. This was a programming language agnostic.

Starting from 2013, the Ripple Protocol was adopted by many financial institutions that saw it as an alternative to the remittance option. Most notable of these is that Ripple allows for cross-border payments for personal services, e-commerce stores, banks, corporations and even small businesses. Larsen was bullish about the network by indicating that the network helped to simplify the exchange process by forming a highly transparent model of point-to-point transfers. Such payments do not require corresponding bank fees.

Fidor Bank in Munich (Germany) became the first to use Ripple in its system after announcing its partnership in 2014. Others that joined later included the Kansas based CWB bank and New Jersey Based Cross-River Bank. By December of 2014 Earthport partnered with Ripple which meant it brought with it huge banking institutions including HSBC and Bank of America.

In December of 2014 alone, the value of XRP grew by over 200%. This made Ripple pass other top cryptocurrencies among them including Litecoin. The growth catapulted the market capitalization of the cryptocurrency to half a billion mark. This growth continued steadily through 2017.

Other banks that joined Ripple in 2015 included Fidor Bank and Commonwealth Bank of Australia. The Western Union also expressed its intention of working with Ripple. While Ripple has indicated its commitment to support government regulation in the crypto-market, it was fined $700,000 for violating the Bank Secrecy Act.

The Ripple Labs agreed to implement remedial measures that included only transacting XRP and getting involved in ‘Ripple Trading’ using MSB (registered money services business) and enhancing the Ripple Protocol. Ripple added that the enhancement will not change the protocol, but include AML transaction monitoring. One of these changes is the latest versions of 0.70.1 types of servers.

Between 2015 and 2017, Ripple Labs embarked on a rapid expansion and marketing program that involve opening multiple offices in the entire globe. Some of these new offices include London, Sydney, United Kingdom, and Luxembourg.

Who Created Ripple?

Ripple was created by a group of experts including Ryan Fugger, David Schwartz, and Arthur Britto in 2012. However, the network development is mainly associated Ripplepay that was created by Ryan way back in 2004.

Ryan who operated as a developer in the top currency exchange in Canada was not convinced that things were okay. He was particularly concerned about the systems’ slow pace and other bottlenecks. But he did not realize the dream alone. To concur with the Ripple community, he could not have achieved the dream alone.

Other people who facilitated the founding of Ripple included Jed McCaleb from the eDonkey network. The network was developed by other top developers including David Schwartz David and Arthur Brittol. Around 2011, the expanded team started designing a digital currency system where transactions could be verified through consensus.

To make the concept complete, another important person who later became very instrumental in operating as the CEO was Chris Larsen. Chris Larsen brought in a wealth of experience after successfully creating companies such as Prosper and E-Loan. In 2012 when the team founded OpenCoin, Fugger who had all along been the leader handed the reigns to Larsen.

OpenCoin began working on RTXP (Ripple Transaction Protocol) that strongly borrowed from Fugger’s concepts. OpenCoin was changed to Ripple Labs in 2013. It is because of this that you will in some cases find people indicating that Ripple Labs founded ripple. Well, it is correct, but the foundation roots buttress further.

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