Ripple is constantly being discussed in the encrypted space by both the supporters of the company and by people who are not interested. The word Ripple can refer to different areas, including the native XRP token, Ripple Labs, Ripple protocol and so on.
Each of these has different roles to play in the Ripple ecosystem and they are both important for traders to make better investment decisions.
For starters, let's talk about Ripple Labs.
Ripple Labs is what has everything that has to do with Ripple. Based in California, the software company behind the development of the Ripple protocol and the XRP token. It was originally founded in 2012 as "Opencoin" by Jedd McCaleb and Chris Larsen, but was renamed Ripple Labs in 2015.
As of this year, the company has raised just under $ 100 million following a list of investors including Google Ventures, Standard Chartered, Accenture, Andreeson Horowitz.
Ripple Labs handles a fairly large number of validation nodes on the Ripple network which allows them significant control over the ripple protocol during this period.
The ripple protocol
The Ripple Protocol is an interbank settlement protocol designed with faster cross-border transactions between different countries and asset classes in mind.
Like everything that works on the Ripple protocol is through traditional banking systems that require one of two things for agreements between accounts of different banks. As mentioned by Use Bitcoin, it's a bit like "an & # 39; IOU & # 39; from one bank to another. The transaction will be recorded in the books of each bank and settled at a later time, so that the recipient can immediately access their funds. "
If this does not work, then the first bank will have to have an open account with the second so they can make an actual deposit on the second bank. Only then can the recipient access the funds from their account.
This is the native currency of the Ripple network and while XRP is not used for transaction fees, it is not actually using XRP for cross-border currency exchanges. Settlements in the Ripple Protocol can be made in any resource that includes the euro, the USD or even Bitcoin.
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