RippleNet: A beginner’s guide to the decentralized network of banks
RippleNet is the only one with numerous Ripple merchandise, and Ripple is the enterprise built around the cryptocurrency.
In numerous years, the Ripple enterprise exercised various economic foodstuffs aimed at utilizing XRP, however as a result it rebranded numerous of these thoughts under one umbrella: RippleNet.
In this post, I will tell you about RippleNet, about it, what it is and why exactly it was invented, and also about it, who exactly uses it.
But first of all, before turning to the analysis of RippleNet, it is necessary to realize the company Ripple and its importance for the token XRP.
What is Ripple?
Issued in 2012, the Ripple enterprise and the XRP token were invented to provide low-cost, reliable, and instant international payments for banks and other economic bodies according to the society.
The Ripple line, based on blockchain technology, proves transactions by a method similar to the proof-of-stake (PoS) consensus method.
There are more than 150 selected users in the bond, which proves transactions, popular as well as a unique list of designs.
But it should be noted that Ripple is not decentralized to such a degree, as well as its brethren according to the blockchain, and does not claim this.
Instead, Ripple is considered a trading system that provides services to economic institutions, and the Ripple team owns the bulk of XRP tokens.
Such concentration contradicts the mantra of many crypto-enthusiasts, however, taking into account that Ripple was designed equally as a business that uses blockchain, and not equally as a company together with an unclosed initial code, the platform is formed in the same way as with a classic company.
For example, because of the past period, the team created various Ripple food products. Already after these studies, the category combined them into a single premiere service under the name RippleNet.
Ripple vs. XRP
First of all, before turning to the RippleNet provision, it is necessary to distinguish between Ripple and the XRP cryptocurrency.
First of all, Ripple uses XRP in various of its provisions but is in no way able to exercise control over this asset or its know-how, even though it possesses a deterrent bulk of XRP.
In this way, the price of XRP is not directly linked to the triumph or failure of Ripple and vice versa.
Ripple is also in no way able to prevent anyone from applying the power of XRP and using it in its services, even though in such a case, the fact that Ripple has such a huge number of XRP, can reduce the various competition.
Now let’s answer the problem: what is similar to RippleNet?
What is RippleNet?
RippleNet uses blockchain know-how to provide economic bodies throughout society with the possibility to move resources, intending to form a common worldwide payment concept, as there is virtually no worldwide payment concept in classical capitals.
Instead of the general world concept of payments in classical capitals various economic companies have formed separate concepts of transfers with the purpose of realization of international payments.
These concepts have little interaction with each other, and the realization of international payments using such concepts requires large expenses and time.
In today’s society, where there is international interconnection, such an old payment concept may seem unacceptable at first glance.
Users of absolutely all types wait months for the processing of payments, the presence of this together with them is charged with a significant special commission, which limits the number of users, on weekends in the world exchange.
RippleNet is called to find a solution to these difficulties, offering a commonly dispersed global line of banks for absolutely all aspiring.
By connecting to the link through a practical programming socket (API), users will be able to move their funds according to the whole society faster and more economically than by classical methods.
The scattered line declares that it cultivates payments in general because of 3 moments, using the worldwide power of its token XRP.
Technically, RippleNet is a set of goods that use the power of the XRP blockchain, but not the blockchain itself. In the presence of this, all transactions made with the support of RippleNet goods are entered into the XRP blockchain, but this does not create RippleNetblockchain as such.
In addition, RippleNet relieves the need for advance funding of accounts along with on-demand liquidity (ODL) support, which uses XRP as a liquidity key.
RippleNet holds more than 55 states and operates in two together with more than 120 fiat currencies, due to which states according to the whole society have all chances to freely send payments to each other.
How RippleNet work?
RippleNet is also divided into several core services that customers can use: xCurrent, xRapid, and xVia.
xCurrent is aimed directly at banks, providing them with cross-border payments at a lower cost than classical international computing.
Banks use xCurrent by defining the software provision of the platform through an API socket, which makes it possible to convert simple payments into other payments based on XRP.
xCurrent is invented in a similar way to meet banks’ existing compliance and risk conditions, which simplifies the design procedure. In the documentation of xCurrent, it is noted that the authorization meets absolutely all functioning policies “To Know Your Customer” (KYC) and “Anti-Money Laundering” (AML).
The xCurrent concept can be divided into 4 elements: Messenger, FX Ticker, Validator, and InterLedger Protocol (ILP Ledger).
RippleNet enables banks connected to RippleNet to communicate with each other and share data on risk, KYC, payment details, projected delivery time, and more.
Enabling banks to share this data facilitates the formation of a common bond of interdependent economic institutions.
FX Ticker is a role in which RippleNet liquidity providers can have their money directions, which allows institutions to constantly understand the conversion price of one fiat to another.
FX Ticker also functions together with the ILP Ledger to prove the monetary value and activates payment transfers from the ILP Ledger of one bank to another.
The Validator sector in RippleNet facilitates the movement of money among ledgers, proving the information in ILP Ledger to ensure the legitimacy of absolutely all movements. The success or failure of a transaction depends on the validator.
And finally, there is the ILP Ledger. Any central bank, appearing in this payment protocol Ripple, has its own personal ILP Ledger, or subledger that tracks all without exception its debits, amount, and high liquidity.
ILP Ledger can automatically organize transfers among absolutely all facets, tracking the market information.
In this case, while xCurrent guarantees inexpensive and fast cross-border payments, xRapid provides buyers with the possibility of extracting liquidity with the support of the XRP token.
Classical methods of financing call for firms to fund accounts in foreign countries in advance, as the conversion of 1 fiat into another can take weeks.
xRapid gives almost instant conversion, releasing high liquidity in the course, which is also known as high liquidity on demand, and eliminating the need for companies to supplement foreign fiat in advance, keeping these funds in their accounts.
xVia is an API segment of Ripplenet, which guarantees a simple connection to the above-mentioned services for customers. xVia makes it possible to send payments together with detailed data, as well as to attach detailed information such as invoices.
Among other positive aspects of RippleNet are the regulation of payments in the supply chain, payment of international invoices, financial transfers in the order of the present period, peer-to-peer payments, the connection of currency money, and the global monetary result, says the RippleNet documentation.
Who uses RippleNet?
Even though Ripplenet is supposed to be a worldwide procedure, it is possible to wonder how many banks use Ripplenet.
Ripple notes that their offerings are used by hundreds of banks, from small institutions up to global organizations.
For example, Bank of America, Santander, and American Express are considered large groups using Ripplenet services. Santander is the company that has processed more than 450 million currencies in RippleNet in 6 countries in Europe and America.
Even though individuals can invest and use the XRP token to move money, as well as in the case of other cryptocurrencies, no one can deny that the use of Ripple is considered more popular in the current period.
In addition, the regulation of such cryptocurrencies, as well as XRP, has a big impact on those who use RippleNet. In certain states, economic authorities may be prohibited from using RippleNet, as the regional governments may restrain or completely prohibit the numerical asset.
Even though Ripple cooperates with banks, for them to adhere to the district principles in the presence of the introduction of RippleNet, the central bank has an obligation because in this case, is considered a unit of RippleNet service that they have all chances to use in legitimate grounds.
Despite this, Ripple is creating everything possible to expand its RippleNet provision. Not so long ago Ripple received a 40 percent part in the firm Tranglo, engaged in cross-border payments. The target of receiving Ripple is considered to increase its own ODL services in Southeast Asia.
Further reinforcing the desire for expansion, two Ripple employees assigned to Southeast Asia will join Tranglo’s management committee. Brooks Entwistle, Ripple’s head of Southeast Asia, and Amir Sarhangi, Ripple’s vice president of provisioning and delivery, will join Tranglo’s management committee.
RippleNet also uses the help of various partners and traders who guarantee the largest increase in the bond. Among such traders are CME Group, Andreessen Horowitz, Accenture, GV, and Seagate.
Why does the XRP token have value?
While bitcoin BTC and other cryptocurrencies intend to replace traditional financial institutions, Ripple and the XRP token aim to cooperate with banks and financial organizations. That said, the value of the XRP token can only be determined by the user community.
If organizations pour money into XRP to use it, the value will increase. But if financial institutions ignore XRP to focus on their existing systems, the value of XRP will drop and Ripple as a company may cease to exist.
However, there is only a limited amount of XRP available. At the time of the asset’s launch, 100 billion XRP had been pre-mined. As with Bitcoin and other cryptocurrencies, the amount of XRP will never be more than 100 billion.
The sender burns a small amount of XRP when making a transaction, which means deflation of the currency that will affect its long-term value. Not only that, the value of the asset is being manipulated by current and former Ripple employees.
Although he is no longer with the company, co-founder Jed McCaleb received 9 billion XRP before his departure. In doing so, McCaleb receives XRP at certain intervals, which he sells or donates. Leaving a huge amount of XRP for sale at intervals will also affect the price of XRP.
Since 2020, Ripple and its top managers have been involved in a legal battle with the US Securities and Exchange Commission (SEC).
The SEC sued Ripple for selling XRP, which the SEC considers an unregistered security. The case is still ongoing, but its conclusion will certainly have an impact on XRP and its value.
Future of RippleNet
Nowadays, RippleNet period functions to recommend ODL in a huge number of areas than ever before in the first place, and also to increase its services in areas that will take its API integration.
In the presence of this Ripple, or rather in general, will improve RippleNet because of the result of additional commercial purchases, such as the acquisition of Tranglo.
Together with RippleNet a variety of large institutions are previously functioning, so there is reason to believe that the concept is correct and has a real use. At present, the regulations must take RippleNet and all the changes that this will entail without exception.