Ripple’s XRP Global Financial System Transformation and Its Initiative Catalyst
The third largest cryptocurrency by market capitalization – XRP was initiated as an idea from its team by elaborating on what is one of the main issues that the financial-verse of the globe handles. By looking at regions and countries as they are today, there are great ways to transfer money within the location. However, no real international or cross-border platform exists that does it very speedy and efficiently.
Ripple’s XRP Comencing
As highlighted by Daniel Aranda – xSprings’ managing director during CryptoCompare MJAC Summit, that during the brain-storming on matter should be taken at hands first the team came to a conclusion that the financial industry architecture is primarily made out of banks. Additionally, that a decentralized platform would be of great help for the cross-border transaction ecosystem.
“As we were thinking about different use cases… around payments… the highest friction and pain point that we found was around cross-border. So, if you think about here in the UK, you have services like the Faster Payments Service, CHAPS, and BACS, RTGS from the Bank of England, you have great payment systems that already exist on a domestic or regional level… so there is SEPA in the EU as well… but because there is no global central bank, you don’t really have a global consolidated payments system… you have layers that maybe simulate that, things like Visa and MasterCard or even SWIFT as a messaging service… And we thought that a decentralized architecture, blockchain technology, and these public ledgers could really help kind of interoperate a lot of these different systems. So, with that thesis in mind, we just started looking at markets [to see] who would be the first users, who is the right first customer to focus work.”
Keeping the above in mind, Mr. Aranda continued:
“So our software solutions, our enterprise solutions, right now, are sold to around 120 financial institutions around the world.”
When the token made its debut into the crypto-verse along with all its developments over the years, it reached very impressive stats for a digital currency. Bitcoin’s and many other’s speed cannot even get close to its confirmation time which is around 3.0 sec and a transaction’s cost of 0.1 cent.
Even that many criticize the blockchain for being centralized, less of the nodes are run from the San Francisco based firm Ripple than the other 52%. As noted out by Ripple Labs CTO David Schwartz, Bitcoin and Ethereum are considered very decentralized with the PoW protocol and idea which truly is great to start the project. However, as time goes by a few miners can control the network and the system.
The XRP Ledger uses a consensus protocol that relies on a majority of validators to record and verify transactions without incentivizing any one party (this is one of the main reasons why I began working on XRP Ledger more than six years ago). Validators are different from miners because they aren’t paid when they order and validate transactions.
Going back to Mr. Aranda and how he took the time during the Summit to speak about the Internet of Value which the team behind XRP and the other solution the company offers are trying to achieve. He added that very similar to the internet today which transfers packages of data, in IoV’s case money/value will be handled around.
“We think that lot of internet of value is going to operate in the same way, where you’re having servers, like validators and miners, actually being able to communicate with each other, and they are really confirming kind of the movement and creation of value and of money.”