What is Ripple? Rising into the ranks of the top 5 cryptocurrencies within the past two months in terms of market capitalization, Ripple has been getting a lot of attention. Lets take a look at the basics of this platform. The Ripple ecosystem consists of two main technologies.
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The first is the Ripple protocol which is an open source protocol for inter-institutional transactions. The second is XRP, which is the native currency of the Ripple network. And can be used as the denomination when transactions are initiated on the Ripple network. The primary participants in the Ripple ecosystem are Gateways, which serve as central exchange points. Validator nodes, who validate transactions using a consensus protocol as opposed to mining which you may see with other currencies. Individual wallet owners as well as Market Makers who provide liquidity by trading on the Ripple platform.
The consenus ledger is a perfect record of all Ripple accounts determined by the servers on the network. A new ledger is created every few seconds. Whenever new transactions are introduced into the network, servers on the network share information about these candidate transactions with each other in order to start the process of achieving consensus. This continues until a supermajority of peers agree on a set of candidate transactions to be added to the new Ledger . This is called the consensus process. Using the last validated ledger as a starting point Nodes evaluate candidate transactions from trusted peers called validators.
Transactions that fail to be validated can be validated in a future round of consensus. Gateways are an important aspect of the Ripple network. They allow you to deposit funds in exchange for Ripple. Withdraw funds by redeeming Ripple And transfer Ripple to another user. They function much like Banks. However All transactions on Gateways are stored on the shared Ripple Ledger. Now a few things to keep in mind regarding Ripple. One of Ripple’s main value propositions is to allow for low cost speedy international transfer of funds between institutions. Each time Ripple is transferred, a small amount of Ripple is burned.
The primary reason for this is to deter an attack on the network from a flood of transactions. Ripple does not use mining and proof of work like other cryptocurrencies such as BitCoin . Its validation algorithm is the Consensus protocol. Ripple is already being used by several banks and financial institutions. I hope you enjoyed this brief introduction to Ripple. If you want to see more videos like this please like and subscribe to the channel. Have a wonderful day.