{"id":2841,"date":"2020-10-23T04:49:57","date_gmt":"2020-10-23T04:49:57","guid":{"rendered":"https:\/\/timestampmag.com\/?p=2841"},"modified":"2021-09-08T11:39:29","modified_gmt":"2021-09-08T11:39:29","slug":"how-does-ripple-work","status":"publish","type":"post","link":"https:\/\/timestampmag.com\/2020\/10\/23\/how-does-ripple-work\/","title":{"rendered":"How Does Ripple Work"},"content":{"rendered":"

Ripple<\/strong><\/span><\/a> dubbed as the platform to instantly move money to all corners of the world, is one of the fast-growing fintech giants. A financial juggernaut with a revolutionary payment protocol is leveraging on the cutting-edge capabilities of validating servers distributed across the network. The Ripple network\u2019s native cryptocurrency is XRP and is being developed and issued by the payment giant. So how does Ripple work?\u00a0<\/span><\/p>\n

Interestingly, despite what you might have thought of, Ripple doesn\u2019t run on blockchain but rather every transaction on the Ripple network is delivered through validating servers, which constantly compare the information they receive and process them into a common ledger.\u00a0<\/span><\/p>\n

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This upholds the arguments that have trailed Ripple\u2019s native currency XRP over some centralization concerns. Contrary to this, Ripple has <\/span>maintained<\/span> that the protocol network is an independent structure to the native XRP token that is supposed to run on a blockchain.<\/span><\/p>\n

Since its foundation in 2012, the U.S based company strives to provide banking services across the 6 continents, enabling faster, cost-effective and efficient cross-border payment in the financial industry. Particularly in the <\/span>banking sector<\/span>, Ripple has achieved this purpose by establishing partnerships with popular banks across the globe.\u00a0<\/span><\/p>\n

Currently, RippleNet, Ripple\u2019s payment network is available in 55 countries with XRP remittance now live in 5 continents. The company\u2019s service offering now ranges across 95 currency pairs according to <\/span>Ripple\u2019s official website<\/span>.\u00a0<\/span><\/p>\n

How Ripple Network Works<\/b><\/h1>\n

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Ripple Protocol Consensus Algorithm (RPCA) adopts a real-time gross settlement system (RTGS), currency exchange and remittance network.\u00a0<\/span><\/p>\n

The network validating servers deploy a consensus mechanism called HashTree as opposed to <\/span>Bitcoin<\/span> which uses a proof of work (PoW) algorithm. The ripple network reaches a consensus by comparing not all the data, but only a single value, which is derived by summarising the ledger\u2019s data. This process differentiates the network from a typical Bitcoin PoW <\/span>blockchain<\/span> network. <\/span><\/p>\n

The most unique feature of RippleNet is its build schematics. crafted on top of a distributed open-source protocol, RippleNet supports tokens that represent fiat currency, cryptocurrency, commodities, flyer miles and mobile minutes. The protocol aims at the enablement of secure, instant and nearly free global financial transactions of any size.\u00a0<\/span><\/p>\n

Broad Distinction Between Ripple Network And XRP<\/b><\/h2>\n

As mentioned, XRP is the actual cryptocurrency token used on the Ripple network to facilitate cross-border payment or settlement. It is currently ranked as the fourth largest crypto asset after being displaced by Tether USDT months ago. Ripple and XRP have been on a tear-mode in the crypto world since 2012, setting itself apart from other cryptocurrencies thanks to its lightning-fast transaction speeds.\u00a0<\/span><\/p>\n

Ripple and XRP aren\u2019t interchangeable, they are distinct entities. <\/span>Ripple<\/span> is a private enterprise software company. The Ripple Protocol is an open-source protocol that governs the Ripple Consensus Ledger (RCL) and RippleNet. Ripple network can exist independent of the XRP cryptocurrency.\u00a0<\/span><\/p>\n

Key Takeaway<\/b><\/h3>\n

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