Ripple: a hypothetical monopolist in the sphere of global currency exchange

In the middle of last month the information officially confirmed by trusted sources stating that Google Ventures agreed to invest into OpenCoin has been released in the net and mass media. The OpenCoin company was initiated by two eminent entrepreneurs – Chris Larsen and Jed MacCaleb who have a direct relation to the world currency system (they have already fulfilled such projects as E-Loan, Mt. Gox, eDonkey). The attention of publicity and the leading search system is riveted on the main idea of the event – the creation of Ripple as the first in the world distributed global currency exchange. The conditions to be applied for system functioning are of interest to not only usual net users but also to HYIP investors in particular…

The easiest definition of what Ripple is and how it works is given by exchange developers on the official website:

Ripple is a simple way for anyone in the world to send money to anyone else at practically no cost. This reach, speed, and affordability are the advantages of a platform built for the distributed internet.

The internal system currency is called ripples (XRP) and is used to pay small fees for each transaction in the network. This currency can be also sent from one account to another, converted into different currency or spent at venues. The network generated a precise and definite number of ripples (100 billion). No more virtual units may be ever released.

While Ripple does not charge a typical fee for profit, each transaction does require a small portion of a ripple (equivalent to ~1/1000th of a cent) for security.
This fractional cost is required by the network to prevent someone from sending millions of transactions and swamping the system.
No one collects these amounts. They are simply destroyed within the network. The effect is the same as redistributing them evenly to all the Ripple account holders in proportion to their balance.

As for the question of user privacy, the exchange does not oblige the payer to provide the merchant any personal data: e-mail, name, address and so on. Like in Bitcoin, if you do not tell anyone your address, people will not know that the address is associated with you. Payments may be also rendered via a gateway.

So major highlights with respect to Ripple formation mechanism and weighty advantages of this currency exchange are as follows:

1) Ripple is a distributed peer-to-peer database. It suggests such notions as payer and merchant. And all monetary funds are reflected in the form of debt (credit exchange).

2) The Ledger keeps track of all transactions, accounts and balances. The time it takes to move money within the system is the time it takes to update the Ledger.

3) The Ledger is updated by the process called Consensus (by which all servers in the network verify and agree upon correct database view).

4) With time a total number of ripples in the turnover is changed in a geometric progression.

5) Conversion of any currency (including ruble and BitCoin) inside the system is carried out with no fees.

6) Currency exchange procedure is completed within few seconds (the verification takes that much time).

7) Ripple is an open network, so it uses an open source code. That’s why eventually there will be new ways that Ripple works.

8) A visual demonstration of the basic exchange principle between network users is given in this video:

At this point both the developers of this global system and interested persons are overwhelmed with optimism about promising future for Ripple. For now project development has been at the beta stage. At the level of an ordinary user considered object is a universal and easy financial product, capable of optimizing the conversion process of any currency and simplifying life of each user, including online investor. I believe that Google benefits in case of happy development ending are not worth being mentioned once again. This search engine will monopolize this side of financial relations as well.

1 Звезда2 Звезды3 Звезды4 Звезды5 Звезд (Пока оценок нет)
Смотрите так же по теме:


Please enter your comment!
Please enter your name here