Ripple: Creating Ripples in the World of Cryptocurrencies

The emergence and later tremendous popularity and growth of Bitcoin paved the way for the evolution of a number of other cryptocurrencies. These are collectively referred to as altcoins for want of a better term. Some of the most popular ones among these are Ethereum, Ripple, and Litecoin. Out of these, it is Ripple that has gained maximum traction in the financial world. It is a real-time gross settlement payment system (RTGS) that was founded in 2012. Ripple has its own currency XRP that has become very popular cryptocurrency in present times.

In just 6 years, Ripple protocol has become very popular among banks and financial institutions around the world as a very fast and cost effective system of payment to make international payments. Today, top 50 banks across the world are using this platform and its technology for settlement of payments. The main reason behind this popularity of Ripple lies in its blockchain technology that makes it so powerful.

How Ripple works?

The present system of sending money from one bank to another internationally is time consuming and cumbersome. Despite being called RTGS, both sender and the recipient are aware that money is not sent across their accounts instantly. It takes hours before the recipient sees the money in his account. But with the help of payment protocol of Ripple, this task of sending the money across two banks becomes easy and very efficient.

Ripple receives the message, stores it, and initiates the transaction. It does pre validation of the two accounts to make sure they are genuine and correct. Interledger Protocol oversees the coordination of fun movement across three banks. The money is held by Ripple across three ledgers. It also makes sure that the money is not sent twice accidentally. Later on, the money is released from all three ledgers. All this takes just a few seconds, not even minutes and the transaction is complete. Afterwards, text messages are sent to all concerned parties to confirm the transaction. This is a much more secure and efficient system of international payment than the regular transfer of funds across banks.

Ripple works on an independent platform separate from Bitcoin and Ethereum blockchain system

One reason why Ripple is moving ahead on the popularity charts is because of its blockchain technology that is unique and different from the blockchain technologies of Bitcoin and Ethereum. XRP is the currency in Ripple and it mainly focuses upon payments whereas focus of Bitcoin is on store valuation while Ethereum focuses upon smart contracts. The reliability of Ripple and the trust shown in this payment protocol by international banks has also helped its currency XRP a great deal. It is not a surprise then that XRP is the third most valuable cryptocurrency in the world today after Bitcoin and Ethereum.

There is another reason why XRP has become the preferred choice of those fond of digital currencies. With its own payment system in place, it takes transactions in XRP just 3.5 seconds to reach from one part of the globe to another. If you compare it with Bitcoin, you would feel that it is a centuries old system as transactions in Bitcoins takes nearly 4 hours to complete.

The purpose behind Ripple

According to OpenCoin, the company behind Ripple, the idea of this payment protocol was a result of the delays in the transfer of payments across banks in different countries. People were disappointed by the speed with which international bank transfers worked and they wanted a faster and more efficient answer. It obliterates the need for higher transaction fees and inordinate delays in money transfer across nations. Ripple has its own digital currency XRP and it aims to do for money what internet has done to the world of information.

Aims to become to finance what email is to internet

According to the CEO of Ripple, the payment system across the banks internationally today is what email used to be in the decade of the 80’s. Different email evolved in those times and wanted people to use their systems but they created hindrances when people across systems tried to interact with each other. ‘Ripple’ desires to stop this discrimination by connecting different payment systems being used by different banks around the world. The company feels it is not easy and that other companies holding monopolies over payment systems might resist easy flow of money. However, it is optimistic about the success of Ripple and its acceptance by banks and financial institutions in near future.

There is no rivalry between Ripple and Bitcoin

As Ripple boasts of its own digital currency XRP that works just like the more popular cryptocurrency Bitcoin, there are many investors who feel that it is a rival to Bitcoin. However, as Ripple serves a bigger purpose of flow of information and money, it does not consider itself as a rival of Bitcoin. In fact, it is a payment system where all currencies, including Bitcoin, can be easily transferred between individuals and corporations. To dispel misconceptions of a rivalry, Ripple managers are developing payment gateways especially for the users of Bitcoins so as to make this cryptocurrency an integral part of the mainstream financial world.

Ripple likes to position itself as not a competitor but a system that compliments Bitcoins. This is why the company has a special page titled Ripple for Bitcoin on its website to make people more aware of this payment system.

As Ripple is a decentralized payment system, it does not depend upon a single company to secure the transactions and its database. Also, there is no single currency for conversions and transfers. Consequently, there is no waiting time and no approvals from a mediating third party. There is no point of failure in the network of Ripple which makes it very fast and super efficient. This is a big advantage that instills confidence in the minds of all those who are using Ripple to transfer their funds internationally.

Ripple is not free to use but it charges very little transaction fees if one compares it with other payment gateways like PayPal or even credit and debit cards. Many people are pleasantly surprised when told that they would be charged 1/1000th of a cent per transaction when using Ripple payment system. Even this amount is not collected but destroyed by the system after every transaction. The sole purpose to introduce this ridiculously small transaction fee is to make sure that the system is not hijacked by an individual or organization to carry out millions of transfers.

Any bank or financial institution can easily switch to Ripple any time it so desires. It is just a technology to facilitate payment transfers and it does not intend to dominate or usurp other digital currencies. There is even no requirement to covert a local currency into XRP to be able to use Ripple. The payment protocol sits atop existing financial infrastructure and complies with the risk and privacy regulations of all financial organizations.

In 2016 end, ripple pumped in $55million dollars into the system for its growth and support. Today, it is the largest blockchain project of the world being used by giant multinationals and corporations around the world.

Ethereum: Smart Contract and Decentralized Application Platform

Ethereum is in news recently. It is a cryptocurrency like Bitcoin but it is much more than just a cryptocurrency. In the simplest of terms, Ethereum is an open source platform that is based upon block chain technology. This platform can be used by developers to create and put into place decentralized applications.

Ethereum is not just another cryptocurrency like Bitcoin

It was Satoshi Nakamoto of Japan who first introduced Bitcoin in 2009. He set into motion not just a cryptocurrency but also a block chain network. Ethereum differs from Bitcoin in the sense that whereas Bitcoin is a decentralized virtual currency system and the block chain is used to register and track its transactions, the blockchain in the case of Ethereum mainly focuses upon running programming code of a decentralized application.

Like Bitcoin, there is a cryptocurrency called Ether in the system of Ethereum. The similarity between Bitcoin and Ethereum and Bitcoin ends here. Ether is a cryptocurrency that can also be used by developers to pay for services offered on Ethereum network. Cryptocurrency is only one application of block chain technology. You can understand this by comparing email with internet. Email may be very important for many people. But it is only one aspect of internet. Bitcoin has become so popular that people consider every system using blockchain technology to be the same.

Smart Contract: The computer code that facilitates money exchange

Once a developer develops the code, it runs on the blockchain like a self-executing program. It is referred to as smart contract as doesn’t require any human intervention provided it meets certain conditions. These smart contracts a highly reliable and there are no chances of a fraud or interference from any third party. These contracts also do not face the problems of downtime or censorship from outside.

All systems utilizing the technology of blockchain can theoretically process codes but most of them are severely restricted in this application. This is where Ethereum scores heavily in comparison to other cryptocurrencies. Unlike other blockchain systems that allow developers to write limited number of operations, Ethereum allows a developer to write whatever programs he has in mind. This gives birth to limitless applications of the same system.

Before Ethereum arrived on the scene, developers faced a big problem when using block chain technology. Functions offered by cryptocurrency Bitcoin were very limited and it took time and effort to expand these functions and applications. They had the option of using a new blockchain platform but that was equally tedious Realizing the predicament of the developers, founder of Ethereum, evolved a new approach when he developed Ethereum.

Ethereum Virtual Machine: The core of Ethereum

The core innovation from Vitalik Buterin, the CEO of Ethereum, was Ethereum Virtual Machine. This is complete software that is compatible with Ethereum network and runs on it seamlessly. Using EVM, any developer can run any program created in any computer language. It is this EVM that has introduced endless possibilities for developers as they can think of many different blockchain applications now. These applications are not only easier but also more efficient than before. Developers know that they need not build a new blockchain for the creation of an application as EVM allows them to develop many different types of applications using this wonderful platform. This means there is no wastage of time and effort and new applications can be created using the same blockchain technology provided with Ethereum.

Multiple Uses of Ethereum

The biggest use of Ethereum lies in its ability to allow developers to create and deploy decentralized applications. Also referred to as Dapp, a decentralized application has one or the other particular purpose to serve for the users. In this sense, Bitcoin can be considered a Dapp as it enables users to indulge in electronic cash payments. The very fact that Dapp runs on a blockchain network made up of computer code means that it is not controlled or governed by a bank or government.

It is possible to decentralize any centralized service using Ethereum. There are hundreds of industries having intermediary services. All these services can be decentralized using Ethereum. If you are thinking what these intermediary services are, you can look at banks providing loans to individuals and companies. If this is highly visible, there are also intermediary services such as voting mechanism, registries of titles, and compliances required by the authorities.

Decentralized Autonomous Organizations

Another important use of Ethereum is in the creation of decentralized autonomous organizations. You can imagine it as an organization with no central leader or command. These organizations follow not the command of a leader but the commands given by a computer code. These commands can also take the shape of smart contracts created using a block chain. This code simulates the rules and regulations of the organization and even its structure. This is a revolutionary concept that aims to create organizations of the future that will not be run by people or leaders but by computer programs. In a DAQ, ownership is decided on the basis of tokens in possession of an individual. This ownership gives people voting rights in such a decentralized organization.

Advantages of using a decentralized platform like Ethereum

There are many benefits of using a block chain based decentralized platform called Ethereum.

Immutability- no individual or organization can make changes to the data
Free from corruption and tampering-There is a general consensus on the network which is why it is not possible to amend or censor the proceedings
Highly secure-The network is highly secure through cryptography. There is no central pint that can initiate failure because of a weakness or deficiency. The system is immune form the attacks of malware and fraudulent attacks.
100% uptime-This is a big benefit as the system is never down on account of failure or maintenance.

Are there any cons of a decentralized system like Ethereum?

Although there are tremendous advantages of a decentralized system like Ethereum, it is not without its own share of pitfalls. This is because of the fact that even the smart codes are after all written by human beings. Codes can develop bugs and these mistakes can be taken advantage of. Also, there is no automatic mechanism to take care of any unintended exploitation of the system. If any such scenario takes place, the only way to stop it is to get the underlying code rewritten. This vulnerability goes directly against the principle of immutability of the system.

Recently, a company based upon the concept of Decentralized Autonomous Organization of Ethereum was formed but it got hacked. This was a major setback to the concept of Ethereum and as a result there was brainstorming among the major shareholders of this system. They decided to carry out hard fork to retrieve the money of this company. This led to a split in Ethereum system with two blockchains now operating simultaneously. Despite this setback, experts believe that Ethereum is moving ahead and it has a bright future ahead. It provides a user friendly platform on blockchain technology to the people and it is being used around the world for decentralization of services.

Digital Gold or Fool’s Gold

Bitcoin Gold

Cryptocurrencies have become very popular among people, especially investors around the world in recent times. One of these, Bitcoin, has increased in value in leaps and bounds giving increased from $2500 in the middle of 2017 to nearly $16000 at present. This increase in value is almost insane according to many experts as they feel that cryptocurrencies are not based upon sound fiscal principles. It is a bubble that is surely to burst in the time to come and that time is not too far away. But crazy investors, filled with greed, are not paying any heed to the warning signs highlighted by financial experts. They want to make the most of the rising price of Bitcoin and other cryptocurrencies.

There are some like billionaire Cameron Winklevoss, who has made a fortune by trading in cryptocurrencies, that these virtual currencies are gold unto themselves.  He believes that Bitcoin is gold 2.0 and it has the potential to upstage gold as the most precious asset in future. Already, market capitalization of Bitcoin has risen to $300 billion. Only future will tell whether Bitcoin takes over gold which has a market capitalization of $300 trillion or it fizzles out as fool’s gold.

What is Bitcoin?

Despite the fact that Bitcoin and its meteoric rise in value has been making headlines in newspapers and internet in recent times, there are many curious people who do not know what it is. It is a kind of cryptocurrency or digital currency that is not regulated by a government or a bank. This decentralized currency is also used as a payment system without an administrator keeping track of these transactions. Bitcoin was invented by an alias with a name of Satoshi Nakamoto in 2009. It can be used to buy products and services and to pay online also. But it is the trading of this cryptocurrency and the way investors are getting rich overnight with Bitcoin that has become the talk of the town. Among cryptocurrencies, Bitcoin is the most popular and also in highest circulation.

Types of cryptocurrencies available

While Bitcoin is the most popular crypto currency around, there are many other cryptocurrencies that have emerged in the last few years. All these digital currencies have come into existence because of the sudden emergence and near domination of Bitcoin. The following are some of the popular cryptocurrencies being circulated around the world in addition to Bitcoin.


Ethereum is a cryptocurrency that has captured the imagination of the investors around the world these days. Its network is referred to as Ethereum and this currency is receiving the love of the people because of its feature of smart contract. The value of Ether right now is $973.84 and its market capitalization is around $95 billion.


Litecoin is an offshoot of Bitcoin. It has become popular because of its lightning fast settlement that takes just 2.5 minutes as compared to 10 minutes for Bitcoin settlement. You can buy and sell Litecoin like other currencies at Coinbase, a currency exchange. The current value of Litecoin is $175. 47 and its market capitalization stands at $9.6 billion.


Tron is a digital currency that has become popular among creative people. Singers and musicians can use this currency to share their work with their fans as they do not need a centralized service for this objective. Justice Sun founded this crypto currency which has a market capitalization of $4.4 billion. Tron is valued at $0.06.

Neo is a smart digital currency for the movement of digital assets while keeping digital identity safe. Neo has a value of $118.62 and a market capitalization of $7.7 billion. Neo is loved by users for its smart contracts that allow for smooth movement.

Stellar was created with the aim to make movement of money easier across banks, payment systems and common people. Its founder is Jed McCaleb who is credited with selling the first Bitcoin exchange called Mt. Gox. He later founded Ripple. The crypto currency used under Stellar is Lumens. Stellar has a market capitalization of $8.1 billion.

All other cryptocurrencies are in defiance of the banking system but Ripple is one digital currency that works in tandem with banks and merely aims to facilitate global payments. The crypto currency under Ripple is XRP and it is being used by top 5 money transfer companies of the world at present. It has a value of $1.21 and market capitalization of $47 billion.

Zcash is an open source digital currency launched in 2016. It is loved by users because of the transparency and privacy it accords to them. Transactions in this crypto currency are published and recorded on blockchain though the name of the recipient and the sender and also the amount are removed from this record.

Why Bitcoin

Among all cryptocurrencies, it is Bitcoin that is most popular and loved by investors the most. It is far ahead of all other cryptocurrencies when it comes to its value, market capitalization, and the user base. Blockchain, which is the underlying technology of this most popular crypto currency, is being used by most other cryptocurrencies around the world. Although the owner cannot have them in his pocket, he can feel as if he has gold in his pocket as he can trade in Bitcoin easily. Also, with no need to keep your Bitcoins safely inside a vault of the bank, you feel very safe. Your wealth is only yours and you do not pay any taxes on its storage or movement which is the case with all other currencies. You can trade your Bitcoins and transfer them from your wallet to the wallet of any other person or company. You can also use them to buy goods and services offline and online. Trading is the biggest benefit of Bitcoins.  Buying Bitcoins now may be a costly proposition but the way its value is increasing with each passing day, you can easily make a fortune for yourself by investing your money in Bitcoin.

The future of Bitcoin

There are divergent views and opinions about the future of Bitcoin among experts. There are many individuals who are happy with its meteoric rise and near domination in the world of cryptocurrencies. They say this digital currency has a very bright future. On the other hand there is no dearth of cynics who feel that Bitcoin is doomed as governments around the world are feeling uneasy because of its unfettered use and circulation. But even if Bitcoin has an unclear future, there is no harm in making the hay when the sun is shining bright.

Bitcoin is currently leading the pack of cryptocurrencies and all other digital currencies are collectively referred to as altcoins. This alone is clear proof of the fact that Bitcoin is here to stay and help those who want to invest their money in a profitable venture. Bit coin is also a payment system for all these which don’t want their transactions governed or regulated by banks and their governments. It is an asset that allows you to create wealth without making any effort.