Ripple’s InterLedger Protocol (ILP) is What the Internet of Value Needs to Thrive
The Internet of Value (IoV) needs
interoperability in order to thrive. As such, open standards like Ripple’s InterLedger
Protocol could help it achieve just that.
InterLedger Protocol and Interoperability
InterLedger Protocol (ILP) was designed to solve a pressing
issue in the blockchain space; the ability of a decentralized app to purchase
resources without being restricted to a particular blockchain network. The InterLedger
Protocol aims at creating a universal network for sending value, and it would
be independent of any company or currency.
The network is composed of
independent operators that serve as decentralized exchanges. The protocol makes
it possible for users to carry out transactions natively on any blockchain of
their choice, without having to transfer their assets to a centralized platform
or a specific network for trading. With InterLedger, users can be able to send
BTC, and the recipient would automatically receive XRP or any other
cryptocurrency of their choice.
It is no brainer that for the
internet of value to achieve its primary objective and thrive, it will need interoperability ,and InterLedger Protocol just does that. The protocol is
beneficial because it helps users connect to any network or payment system in
the world without having to switch from their current networks or change the
ways the systems work.
The technology has been used to carry out transactions by the Bank of England while the Bill & Melinda Gates Foundation used it to power new open-source software MojaLoop. The InterLedger Protocol helped this software connect to various payment systems and help people in the underbanked and unbanked areas of the world have access to financial services.
Ripple’s ILP Could Help the Internet of Value Thrive
No doubt, Ripple is one of the
leading and most creative payment systems. In June 2017, the company
open-sourced the first BTC plugin for its ILP, which would help users carry out transactions across
multiple ledgers, not just the XRP ledger.
Following the activation of the
plug-in on its ILP, Ripple proceeded to carry out a single transaction on seven
different ledgers. This singular transaction passed through private
blockchains, public networks, a traditional payment channel, and a centralized
ledger. While transactions might not pass through so many ledgers, Ripple
insisted that the test was carried out to show that their ILP can work
excellently with distributed ledgers.
Back then, Ripple CTO Stefan Thomas gave
his opinion saying “that’s where the
future is going. We think that in the future all different ledgers will be tied
together and transactions will be very seamless. So, we want to make sure that
our customers are going to be set up for success in that world.”
Ripple has banking applications that
rely on XRP, and with the interoperability feature of its ILP, the crypto
company would play a crucial role in the advent and growth of the internet of
value over the coming year. A Twitter user, seems to agree with this fact, as
he believes that money would move fast with Ripple ILP.
Ripple’s technologies are getting
adopted by banks and financial institutions all over the world, and with this
vast network at its disposal, Ripple is best placed to lead the advent of the
internet of value.
Gradually, ILP as part of Ripple’s
software, will become the standard protocol for connecting banks’ cash ledgers.
It will be an exciting journey towards that end.