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What is Ripple? | The Ultimate Beginner’s Guide

What is Ripple

Ripple is a distributed open source internet protocol that facilitates a real-time gross settlement system (RTGS), currency exchange, and remittance network. Ripple is most often used by banks and other financial institutions to fortify their operational infrastructure. According to the Ripple website, they are the world’s only enterprise blockchain solution for global payments. The name…

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Ripple is a distributed open source internet protocol that facilitates a real-time gross settlement system (RTGS), currency exchange, and remittance network. Ripple is most often used by banks and other financial institutions to fortify their operational infrastructure. According to the Ripple website, they are the world’s only enterprise blockchain solution for global payments.

The name Ripple refers to three things: Ripple Labs (the company that oversees the development of Ripple), the Ripple Transaction Protocol (RTXP), and the network’s native cryptocurrency, XRP, or simply Ripples.

We’ll cover each of these components in the following topics:

Ripple’s story goes back to 2004 when Ryan Fugger, a web and decentralized systems developer, was working on a local exchange trading system in Vancouver. His goal was to develop a decentralized monetary system that would allow people to create a medium of exchange for whatever purposes they saw fit. He eventually launched the first iteration of this idea with RipplePay.com

In 2012, developers Jed McCaleb and Chris Larsen approached Ryan Fugger with their idea for a digital currency. The system would rely on transactions verified by a consensus process among members on the network, instead of the mining verification method used by Bitcoin and many other cryptocurrencies.

After deliberation with McCaleb and others within the Ripple community, Fugger decided it was best to allow McCaleb and Larsen to take over Ripple. Following this decision, McCaleb and Larsen co-founded OpenCoin.

From there, OpenCoin immediately began working on the Ripple protocol (RTXP) and the Ripple payment and exchange network. The company received angel funding from several different venture capital firms.

Things were looking great for OpenCoin, but less than a year after its founding, McCaleb left the company. On September 26, 2013, OpenCoin officially rebranded themselves as Ripple Labs, Inc. and decided to become fully open-source as they released the peer-to-peer full node Rippled. By becoming open-source, the Ripple protocol was now viable independently from Ripple Labs. While they can and still do lead the development on the network, the Ripple network technically does not need the company in order to remain active.

The next few years would prove difficult for Ripple, as they received a $700,000 fine from the US Treasury’s Financial Crimes Enforcement Network (FinCEN) for “willful violation of the Bank Secrecy Act by acting as a money services business without registering with FinCEN.”

By corporatizing themselves, Ripple Labs exposed themselves to government regulation in a way that some other cryptocurrencies are safe from. Bitcoin, for example, is not backed by a corporate entity and leaves any sort of regulatory liability on the users of the network rather than a centralized group.

After their run in with FinCEN, Ripple obtained a virtual currency license from the New York State Department of Financial Services. This allowed Ripple to continue business as usual and Ripple became only the fourth company to hold a BitLicense, or a business license of virtual currency activities. Now that Ripple was a fully licensed and recognized virtual currency firm, they were able to continue operation.

By this point, Ripple had been working on several Ripple protocol projects and the shift away from a simple peer-to-peer currency had begun. The protocol had been adopted by a growing number of financial institutions as an alternative remittance option for consumers. Remittance refers to a transfer of money by a foreign worker back to their nation of origin.

This shift was seen as an opportunity by Ripple’s CEO Chris Larsen as he said in 2014,

“…we think that the bigger opportunity is not just to create another digital currency — there are plenty of those — but rather to use that technology as a way of building a settlement system with no central operator.”

Ripple began collecting partnerships with major financial instructions around the world. Companies like American Express, BMO Financial Group, the Royal Bank of Canada (RBC), and many others have identified Ripple as a means to bolster their operations. Some see it as a way to fight back against other cryptocurrencies often viewed as direct competitors to banks.

Ripple Partnerships

Those who consider their investments in digital assets as a means to insulate themselves from the corruption and general failings of the traditional banking system often view Ripple with distrust as it is clear that Ripple has aligned with their perceived enemy.

That being said, Ripple is seen as a safe entry point into crypto investing by some simply because of its banking utility. Many digital currencies claim to have world changing technology with not much to back up their claims. Ripple on the other hand, has proven utility and the trust from the banks has drawn the attention of traditional investors and large sums of money.

The Ripple Protocol Consensus Algorithm is the title of a white paper published by Ripple Labs in 2014. The paper addresses failures in traditional transaction systems and distributed payment systems like blockchain-based cryptocurrencies.

In contrast to these other cryptocurrencies, the Ripple protocol uses a common shared ledger, or distributed database, and operates with a consensus protocol to validate transactions and account balances on the network. This differs from the typical proof-of-work system used by Bitcoin and other blockchains. Proof-of-work requires computers connected to the network to act as miners, where the computing power of their hardware is used to validate and compile ledger entries, earning rewards when blocks are completed.

The consensus protocol of Ripple validates transactions in a way that improves the overall integrity of the system to prevent double spending. Distributed nodes on the network confirm transactions by participating in a poll that determines the majority vote on whether the transaction was carried out properly. For example, if you had 50 XRP in a wallet and you tried to send the entire balance to multiple addresses, the validators on the network would be polled to determine which transaction input occurred first. Only the first input would be recognized and completed.

XRP is the native currency used on the Ripple network, not unlike Bitcoins or Ether on the Ethereum network. However, XRP, in contrast to the above coins, is primarily designed as a liquidity instrument of the Ripple network. It acts as a bridge currency, meaning it can allow for transactions between two typically unrelated currency pairs.

There are other currencies on the Ripple network, but XRP is the only one free from counterparty risk, or the possibility that a counterparty will not fulfil their obligation to pay. This is a risk native to insurance policies, bonds, or other contracts.

During the development of Ripple, it was determined that there would be 100 billion total XRP to be introduced into the market. Of the 100 billion created, 20 billion were retained by the founders of Ripple Labs. XRP are divisible by up to 6 decimal places. The smallest unit is called a drop with 1 million drops totaling 1 XRP.

Suggested Reading Why is Ripple so cheap?

Ripple is designed to facilitate fast, seamless transactions between banks, payment providers, corporations, and digital exchanges. The network utilizes multiple instruments, like XRP, to complete transactions that are typically slow and costly.

XRP can act as a bridge currency between other currencies and assets. It allows for the open exchange of fiat and cryptocurrencies by creating liquidity without the need to increase your holdings of liquid assets.

One way this would prove useful compared to traditional banking would be their use of nostro accounts. A nostro account is an account in which a bank holds a foreign currency in another bank. Most of the large commercial banks of the world have nostro accounts in every country that uses a convertible currency.

Ripple eliminates the need for these accounts because instead of holding all of these currencies in reserve, you can simply hold an amount of XRP and complete foreign exchange transactions as needed without all of the added accounting measures.

Perhaps the most important feature of performing business transactions with Ripple is that it is nearly instantaneous. Everyone knows the struggle of receiving a check and waiting for it to clear; standard transactions can take days to complete. Ripple transactions, on the other hand, can be initiated and verified in seconds, and that includes foreign exchange processes that are even more costly and time-consuming.

Ripple is one of the most polarizing matters in the cryptocurrency community and it all stems from one concept. Decentralization.

Decentralization is the majority goal of blockchain developers. They distribute decentralized ledgers so that no central force can impose undue influence on the network and its users. Ripple is often accused of being a centralized cryptocurrency for three reasons. Ripple Labs is holding 20 billion XRP, they control the non-circulating total of XRP in addition to that 20 billion and they have solidified themselves as the most trusted validator on the Ripple network.

In the XRP section of this guide, it is mentioned that Ripple Labs created 100 billion XRP. This is already a deviation from the norm as cryptocurrencies are typically created through mining by users on their network. The Ripple creators then decided to retain 20 billion XRP for themselves.

Now this is obviously controversial as it gives just a handful of people 20% of the entire supply of a currency. On an open market, these few massive holders hold incredible power. They could theoretically dump their holdings and crash the price.

Not everyone sees this as a problem though. Supporters consider the retention of Ripple by its creators as no different than founders of a company holding a certain number of shares when their business goes public.

Nevertheless, some of the Ripple founders have agreed to slowly sell their holdings of XRP at a careful rate over several years in order to add stability to the market. Some of their holdings have also been donated to worthy causes.

This leads us to what happened to the other 80 billion XRP. As of the time of this writing, over 39 billion XRP are in circulation. With the majority of the currency in the hands of the company that created it, some believe this makes Ripple Labs too powerful in the financial ecosystem it created. Crypto markets are not mature and prices can fluctuate wildly when large holders decide to buy or sell holdings.

Perhaps the biggest concern Ripple opponents have with the controversial cryptocurrency is its role in maintaining the network. Ripple Labs is the primary validator on the Ripple network, meaning they could potentially do anything they wanted to their distributed ledger. As mentioned above, it is theoretically true that the Ripple network could continue operating without the control of Ripple Labs, but at the moment, they hold a monopoly on its processes.

Ripple has recognized these criticisms, however, and is working on a plan to implement a decentralization strategy. They are encouraging additional validators to join the network, leading them away from a monopoly on the system. If these additional validators are free from the control of Ripple, then over time the system could become truly decentralized and the network could upgrade and evolve as the community sees necessary.

Although those decentralization strategies are official statements, Ripple critics remain skeptical. Banks are seen as the enemy in this metaphorical war, and Ripple has chosen its side.

Even though XRP is markedly different from most digital assets in terms of technology and usage, it can be purchased on many of the world’s popular cryptocurrency exchanges.

Check out our guide step-by-step on how to buy Ripple XRP here.

There are many options for storing your XRP after you acquire it from an exchange. Digital assets traded on exchange will be stored in their hosted wallets and they belong to you, but it is not a good idea to leave your funds in an exchange’s wallet, as there have been instances of hacking in the past, most notably the Mt. Gox hack that resulted in about 850,000 Bitcoins being stolen.

While Bitcoin wallets are free, Ripple wallets require 20 XRP to hold your wallet address. Because of this, it is advisable to store your XRP on a single wallet rather than across several.

One of the best options for XRP storage is a hardware wallet called the Ledger Nano S. Hardware wallets are often considered to be one of the most secure methods of storing your cryptocurrencies, and the Ledger Nano S supports XRP along with a number of other coins.

For our comprehensive guide to the best XRP wallets, click here.

Ripple is lumped in with the thousands of cryptocurrencies because of similar underlying technologies and financial implications, but it is something that is fundamentally unique. By focusing on partnerships with banks and major corporations, Ripple is on a different path than that of Bitcoin, Monero, or other projects that are built around the idea of disruption. Ripple isn’t trying to disrupt banks, it is trying to give the banks a fighting chance against the wave of cryptocurrencies gunning for them.

Source: https://unhashed.com/cryptocurrency-coin-guides/what-is-ripple-xrp/

Blockchain

Binance to cease these crypto-derivative offerings in Australia

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Once upon a time, regulators around the world weren’t confident about handling the crypto-ecosystem. This attitude, however, has changed of late thanks to the industry’s growth and the interest it has seen from traditional institutions and major investors.

The aforementioned change isn’t universal, alas, with some crypto-entities still coming under a lot of regulatory fire. Binance is a case in point. The platform has come under increased scrutiny from a growing number of regulators worldwide, including regulatory authorities from the U.K, the U.S, the Netherlands, and Canada.

Australia too has now been added to this ignominious list.

According to an official announcement made by the exchange, Binance will no longer offer Futures and Options trading in Australia. It read,

“As Binance constantly evaluates its product and service offerings to comply with local regulations, we will cease offering the following products to existing Australian users: Futures, Options, Leveraged Tokens”

Moreover, it revealed that ‘existing Australian users will have 90 days to reduce and close their positions for these products.’ Post 23 December, users will no longer be able to manually reduce their positions, and all remaining open positions will cease.

What does this mean for Binance and its executives?

Well, the aforementioned step is in alignment with its executives’ aim – To create a sustainable ecosystem around blockchain technology and digital assets. In fact, according to one of its executives,

“Binance welcomes developments to our industry’s regulatory framework as they pose opportunities for the market players to have greater collaboration with the regulators. We are committed to working constructively in policy-making that seeks to benefit every user.”

This move followed last month’s restrictions on Options, margin products, and leveraged tokens (New accounts were barred from engaging in).

And the “nightmare” continues… 

Binance took a similar hit in a different part of the world less than two weeks ago. It discontinued support for trading pairs in the Singapore dollar (SGD), again due to regulatory crackdown(s).
Binance found itself in troubled waters earlier this year, with regulators around the world zeroing in on the top exchange. The regulatory pressure forced the leading crypto-company to adopt a proactive approach to compliance. That being said, the jury is still out on whether these steps have been making any difference?
Moreover, US authorities are probing possible insider trading and market manipulation allegations involving Binance. The exchange, for its part, has denied these speculations. Binance has a “zero-tolerance policy for insider trading,” a statement said.
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Source: https://ambcrypto.com/binance-to-cease-crypto-derivative-offerings-in-australia

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Robinhood Testing New Cryptocurrency Wallet as Demand Rises

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The millennial-focused trading portal is edging closer to launching a long-awaited app that will enable its growing user-base to send and receive cryptocurrencies.

A beta version of Robinhood’s iPhone app showed the company’s latest upgrades on the new digital asset features, according to Bloomberg.

There is a hidden image showing a waiting list for users eager to get their hands on the app and code referring to crypto transfers, it added.

Delving Deeper into Crypto

Robinhood users can already buy and sell cryptocurrencies on the platform but they need to convert them to and from USD. With a native app, users will be able to send crypto assets to each other directly and set up two-factor authentication for additional security.

Robinhood Chief Executive Officer Vlad Tenev stated that adding crypto wallets is a priority for the company’s developers and they are actively working on such.


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“The ability to deposit and withdraw cryptocurrencies is tricky to do with scale, and we want to make sure it’s done correctly and properly.”

He did not specify a launch date, but the beta app leak suggests it is not too far away. Users of the new functions will need to activate crypto sending and receiving and the registration page will require an identity check, the report added.

On Sept. 11, CryptoPotato reported that Robinhood had launched incentives to promote longer-term cryptocurrency investing. The zero-fee recurring purchase feature enables users to schedule digital asset purchases for regular intervals with buys as low as a dollar.

This will encourage customers to build their cryptocurrency portfolios over time and “become a whole coiner,” stated Robinhood.

Robinhood Users Hungry For Crypto

Cryptocurrency trading has been one of the biggest drivers of revenue for Robinhood this year. Dogecoin has been the crown jewel, according to the company. It reported that 62% of its $233 million in second-quarter crypto income came from DOGE trading.

It added that more than half of all transaction-based revenue on the platform came from digital asset trading. The firm did warn that Q3 would not be as prosperous due to “seasonal headwinds and lower trading activity across the industry.”

Robinhood share prices have already fallen 43% since their all-time high of a little over $70 in early August. They are currently trading down 1.68% since Monday’s open at $40.70 according to Yahoo! Finance.

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Source: https://cryptopotato.com/robinhood-testing-new-cryptocurrency-wallet-as-demand-rises/

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Snoop Dogg Reveals His Connection With Twitter Account on NFTs

Snoop Dogg Twitter

Rate this post American rapper Snoop Dogg tweeted on Monday that he’s the owner of a Twitter account that talks about nonfungible tokens (NFTs). The account, named @CozomoMedici, shares “insights and tales from the wild world of NFTs” and has 27.7K followers at the moment. Snoop Dog Claims to Be Popular NFT Advocate on Twitter Snoop Dogg left the crypto community stunned this week after he revealed himself as the owner of a Twitter account dedicated to NFTs.  The account Cozomo de’ Medici, named after an Italian banker, is only a month old. However, it has already garnered attention from industry watchers and even a mention from crypto-focused news outlet The Block.   According to The Verge, the person behind the Medici account had been creating hype around their real identity for “at least a few days” and even conducted a poll for their followers to take a guess. The poll featured Democratic congresswoman Alexandria Ocasio-Cortez and Matt Bellamy, the lead singer of the rock band Muse. Snoop, however, was not mentioned in the poll. On September 20, @CozomoMedici tweeted that they were about to reveal their identity from their account. Shortly after, Snoop Dogg tweeted “I am @CozomoMedici.”   Interestingly, after making this revelation, the Medici account bought two weed-themed collectibles from an artist named NyanDogg, The Verge reported. Additionally, Snoop’s alleged OpenSea account has been sent  “a cloud of blunt and Snoop-themed NFTs” following the reveal. Is Medici Account an Elaborate Prank? The Medici account could likely turn out to be an elaborate prank, one that Snoop might have engineered himself or just participated in. Many reactions to Medici’s reveal have also expressed skepticism about Snoop’s involvement. “I have a hard time accepting that this account is Snoop Dogg. Like seriously Snoop Dogg muted his live stream for a week (?) by accident. And he is that deep into NFTs out here owning crypto punks… Owning Eth using OpenSea. Would love that to be true but I can’t believe it,” Twitter user @Brandolf485 wrote in the comments. Nonetheless, the crypto community will have to continue looking for concrete proof till Snoop’s involvement with the account is confirmed. 

The post Snoop Dogg Reveals His Connection With Twitter Account on NFTs appeared first on Cryptoknowmics-Crypto News and Media Platform.

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American rapper Snoop Dogg tweeted on Monday that he’s the owner of a Twitter account that talks about nonfungible tokens (NFTs). The account, named @CozomoMedici, shares “insights and tales from the wild world of NFTs” and has 27.7K followers at the moment.

Snoop Dog Claims to Be Popular NFT Advocate on Twitter

Snoop Dogg left the crypto community stunned this week after he revealed himself as the owner of a Twitter account dedicated to NFTs. 

The account Cozomo de’ Medici, named after an Italian banker, is only a month old. However, it has already garnered attention from industry watchers and even a mention from crypto-focused news outlet The Block.  

According to The Verge, the person behind the Medici account had been creating hype around their real identity for “at least a few days” and even conducted a poll for their followers to take a guess. The poll featured Democratic congresswoman Alexandria Ocasio-Cortez and Matt Bellamy, the lead singer of the rock band Muse. Snoop, however, was not mentioned in the poll.

On September 20, @CozomoMedici tweeted that they were about to reveal their identity from their account. Shortly after, Snoop Dogg tweeted “I am @CozomoMedici.”

Interestingly, after making this revelation, the Medici account bought two weed-themed collectibles from an artist named NyanDogg, The Verge reported. Additionally, Snoop’s alleged OpenSea account has been sent  “a cloud of blunt and Snoop-themed NFTs” following the reveal.

Is Medici Account an Elaborate Prank?

The Medici account could likely turn out to be an elaborate prank, one that Snoop might have engineered himself or just participated in. Many reactions to Medici’s reveal have also expressed skepticism about Snoop’s involvement.

“I have a hard time accepting that this account is Snoop Dogg. Like seriously Snoop Dogg muted his live stream for a week (?) by accident. And he is that deep into NFTs out here owning crypto punks… Owning Eth using OpenSea. Would love that to be true but I can’t believe it,” Twitter user @Brandolf485 wrote in the comments.

Nonetheless, the crypto community will have to continue looking for concrete proof till Snoop’s involvement with the account is confirmed. 

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Source: https://www.cryptoknowmics.com/news/snoop-dogg-reveals-his-connection-with-twitter-account-on-nfts/

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