What Is Ripple? Ripple Explained for Beginners

what is X or P X or P is a digital asset for representing the transfer value across the ripple Network also known as the ripple net created and operated by a newest based technology company ripple labs the main goal for ripple is to connect banks payment providers and digital asset exchanges to provide a solution for real time and cost effective global money transfers X rapid is an on-demand liquidity solution provided by ripple labs it is designed for financial Institute’s to use ripples X or p assets as a bridge currency between fiat currencies when making cross-border payments X or P and X rapid or relying on ripples patented technology called the ripple protocol consensus algorithm or or PCA in short and all the information of ripple accounts and XRP transactions are stored in a common shared ledger also known as the XRP ledger the ledger is managed by a network of independent validating nodes that constantly compare their transaction records these nodes can belong to anyone from individuals to banks however riffle recommends its clients to use a list of identified trusted participants also known as unique node list or UNL to validate their transactions the nodes in the unique node list continually exchange transactions with other nodes on the list and the goal of consensus is for each node to apply the same set of transactions to the current ledger transactions that are agreed upon by a super majority of nodes are considered valid you can imagine this as a large group of trusted people and the network needs agreement from all of them to make a decision but if one of them doesn’t agree nothing will happen until the problem is solved how does it work let’s take a simple example Bob from Australia wants to send $100 to Alice who is based in India Bob transfers the money via a service that is provided by a financial institution that is using the X Rapid solution the service then connects into asset exchanges in both the originating and destination country Bob’s $100 is exchanged into X R P which provides the necessary liquidity to power the final payment and in seconds that XAR p is exchanged into indian rupees and it’s accessible by alice from the local acid exchange ripple also offers other solutions that do not use the X or P cryptocurrency by default X current is ripples enterprise solution that is designed for facilitating instantaneous settlement and end-to-end tracking of cross-border payments between ripple net members X currents does not operate on the same technology as XR P as it is built around the inter ledger protocol ILP which was designed by ripple as a protocol for connecting different Ledger’s or payment networks X current consists of four different components the X current messenger provides peer-to-peer communication between connected ripple net financial institutions it is used to exchange information regarding risk and compliance fees FX rates payment details and expected time of funds delivery validator is used to cryptographically confirm the success or failure of a transaction and also to coordinate moving of funds across the inter ledger financial institutions can run their own validator or can rely on a third party validator ILP ledger is used as a sub ledger which can be incorporated into financial institutions current ledger the ILP ledger is used to track credits debits and liquidity across transacting parties phones are settled atomically meaning that they are settled instantly or not at all FX ticker is used to define exchange rates between transacting parties it is also good to note that the same way excurrent can handle dollars euros and other fiat currencies as well as Bitcoin and other cryptocurrencies X or P can also be traded through the system expire allows payment originators and corporates to send international payments through financial Institute’s that’s been connected to ripple net using an API based standardized interface payments can be attached with rich information like an invoice or payment status stay tuned for more contents and don’t forget to check out our other videos at finance academy

5 thoughts on “What Is Ripple? Ripple Explained for Beginners”

  1. The catch here is that Ripple labs controls the default UNL and without everyone running the same validators there is no broad consensus. 80% of your validators have to over lap with other peoples validators and then 80% fof those validators come to consensus on the ledger. The truth is that this system is not very decentralized at all.

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