This is the third of a series highlighting various cryptocurrencies that continue to gain popularity.
By Jhoo Dong-chan
Ripple refers to a gross settlement system, currency exchange and remittance network, which is built on a distributed internet protocol such as bitcoin and Ethereum.
Ripple is distributed in the market under a ledger and virtual coin named "XRP," and is the third largest coin by market capitalization as of Jan. 25.
It was first developed by British Columbia-based web developer Ryan Fugger as a means for transaction service between banks across the world under its previous name, "RipplePay," in 2004.
Adopting U.S. programmer Jed McCaleb's eDonkey network conception, RipplePay started developing a digital currency system in which transactions were verified by consensus among members of the network, rather than by the mining process used by bitcoin, which relies on blockchain ledgers.
Therefore, it was designed to eliminate bitcoin's reliance on centralized exchanges, use less electricity than bitcoin, and perform transactions much more quickly than bitcoin.
Later in 2012, the RipplePlay development team founded the corporation OpenCoin, which started studying a new payment protocol called the Ripple Transaction Protocol based on Ryan Fugger's concepts. The protocol enables the instant and direct transfer of money between two parties, and the U.S.'s largest startup investor Andreessen Horowitz and Google also participated in OpenCoin's development.
In July, 2013, OpenCoin changed its name to Ripple Labs while it released the Ripple reference server and client as a free and open source software to enable "secure, instantly and nearly free global financial transactions of any size with no chargeback." Ripple CEO Brad Garlinghouse said Ripple will be widely used as a global payment method in the future.
"What sets XRP apart from the other major digital assets is that XRP is a high-performance currency and optimized for institutional use in global payments," he said. "The average time to complete a bitcoin transaction is about four hours. By contrast, a Ripple transaction takes about four seconds."
Noting Ripple's good performance, Garlinghouse said it can handle more than 1,500 transactions per second while bitcoin currently deals with only 15 transactions per second.
Recognizing Ripple's excellence in performance, major financial firms such as UniCredit, UBS and Santander also started using Ripple as settlement infrastructure technology.
The U.S.-based trade news daily American Banker also said that "distributed ledgers like the Ripple system have a number of advantages over cryptocurrencies like bitcoin, including price and security from banks' perspectives."
Bloomberg also called bitcoin a "failing" digital currency, after bitcoin's value fell 54 percent in 2014 while Ripple was described as a significant competitor, in part because of its real-time international money transfers.
There were 100 billion XRPs created at Ripple's inception, with no more allowed to be created according to the protocol's rules. And therefore, cryptocurrency traders say there is a strong belief in the market that the price of Ripple will eventually rise.
"Ripple is a kind of safe investment in the virtual currency market since its nature of scarcity," Cryptocurrency trader Kim Hwan said.
"Believing Ripple will eventually prevail in the long term, investors tend not to withdraw their money from Ripple even if they suffer a great deal of losses in a day."
By Jhoo Dong-chan
Ripple refers to a gross settlement system, currency exchange and remittance network, which is built on a distributed internet protocol such as bitcoin and Ethereum.
Ripple is distributed in the market under a ledger and virtual coin named "XRP," and is the third largest coin by market capitalization as of Jan. 25.
It was first developed by British Columbia-based web developer Ryan Fugger as a means for transaction service between banks across the world under its previous name, "RipplePay," in 2004.
Adopting U.S. programmer Jed McCaleb's eDonkey network conception, RipplePay started developing a digital currency system in which transactions were verified by consensus among members of the network, rather than by the mining process used by bitcoin, which relies on blockchain ledgers.
Therefore, it was designed to eliminate bitcoin's reliance on centralized exchanges, use less electricity than bitcoin, and perform transactions much more quickly than bitcoin.
Later in 2012, the RipplePlay development team founded the corporation OpenCoin, which started studying a new payment protocol called the Ripple Transaction Protocol based on Ryan Fugger's concepts. The protocol enables the instant and direct transfer of money between two parties, and the U.S.'s largest startup investor Andreessen Horowitz and Google also participated in OpenCoin's development.
In July, 2013, OpenCoin changed its name to Ripple Labs while it released the Ripple reference server and client as a free and open source software to enable "secure, instantly and nearly free global financial transactions of any size with no chargeback." Ripple CEO Brad Garlinghouse said Ripple will be widely used as a global payment method in the future.
"What sets XRP apart from the other major digital assets is that XRP is a high-performance currency and optimized for institutional use in global payments," he said. "The average time to complete a bitcoin transaction is about four hours. By contrast, a Ripple transaction takes about four seconds."
Noting Ripple's good performance, Garlinghouse said it can handle more than 1,500 transactions per second while bitcoin currently deals with only 15 transactions per second.
Recognizing Ripple's excellence in performance, major financial firms such as UniCredit, UBS and Santander also started using Ripple as settlement infrastructure technology.
The U.S.-based trade news daily American Banker also said that "distributed ledgers like the Ripple system have a number of advantages over cryptocurrencies like bitcoin, including price and security from banks' perspectives."
Bloomberg also called bitcoin a "failing" digital currency, after bitcoin's value fell 54 percent in 2014 while Ripple was described as a significant competitor, in part because of its real-time international money transfers.
There were 100 billion XRPs created at Ripple's inception, with no more allowed to be created according to the protocol's rules. And therefore, cryptocurrency traders say there is a strong belief in the market that the price of Ripple will eventually rise.
"Ripple is a kind of safe investment in the virtual currency market since its nature of scarcity," Cryptocurrency trader Kim Hwan said.
"Believing Ripple will eventually prevail in the long term, investors tend not to withdraw their money from Ripple even if they suffer a great deal of losses in a day."
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