What is Ripple?
Ripple came to settle the problem that banks or other financial institutes usually face with. It’s both a currency and a platform. It has an open source protocol which allows fast and cheap transactions within using its currency called (XRP). The Ripple mission is to rule all the international transactions globally, and it going to eliminate the currency exchanges from the cycle. What Bitcoin couldn’t be bale to do it due to its complexity.
Let’s make it more clear by giving an example. Imagine you want to send some money to your friend abroad using traditional banking system. It may take few days for your friend to receive the money and you should pay a considerable amount of money as transactions fee. but what is the procedure that makes it so long to transfer money internationally and what are those transaction fees for?
When you send your request to transfer the money, the bank need to convert your local currency to US dollar and then get connected with a middle-man exchange to transfer the money to another country. When the bank received the money from middle-man then they need to transfer it from US dollar to their local currency and then your friend will receive it in their bank account. In this process, the conversion ratio from US dollar to local currency and vice versa will cost you. Furthermore, banks and middle-man exchanges charge you some amount of transaction fees.
Ripple came to make this process simple, fast and cheap. Banks or any other financial institutes can simply transfer money globally by using a single currency (XRP), without middle-man exchanges interruption.
What is XRP?
Basically, XRP is a token used as a mediator for both fiat and other cryptocurrencies to represent the transfer of value across the Ripple network. So, if you want to transfer money internationally using Ripple network, it can be dollar with dollars or euro with euro to minimize the commission.
The transaction fee using Ripple network would be 0.00001 dollar. After each transaction this amount disappears and the world becomes 0.00001 dollar poorer. The aim is to prevent spammers attack.
Who are Ripple Labs founders?
The prototype created back in 2004. But in 2013 that Jed McCaleb invited investors to invest in Ripple Lab.
Jed McCaleb is a famous programmer ad entrepreneur who Co-founded the famous Mt.Gox cryptocurrency exchange and several other crypto-startups.