You're reading from Ripple Quick Start Guide

Product typeBook

Published inDec 2018

Reading LevelIntermediate

PublisherPackt

ISBN-139781789532197

Edition1st Edition

Languages

C++

Concepts

Cryptocurrency

Author (1)

Febin John James

Applications of Ripple

In the last chapter, we learned to work with Ripple currency. In this chapter, we'll learn the applications of Ripple. Studying the applications of Ripple will help us get insight on the future potential of Ripple. For developers, this chapter will lay a foundation for the upcoming chapters where we'll learn to code escrows and checks. We will also look into some of the common misconceptions about Ripple.

The following topics will be covered in this chapter:

High speed and low-cost payments
Cross-currency payments
Checks
Escrows
Payment channels
Initial coin offering
Decentralized exchange
Common misconceptions about Ripple

High speed and low-cost payments

In the first chapter, we learned why the global payment system was inefficient. Let's get into the following to understand how Ripple overcomes its inefficiencies:

Present global payment systems don't work as a system. They lack effective inter-connectivity.
Lack of effective inter-connectivity leads to costly transaction fees and delays.
Most data in these systems is hidden and can be easily manipulated. Hence, there's no transparency in the system.
Lack of transparency in the system increases the chances of fraud.
High transaction costs limits banks ability to address a large market.
Since there's no standardization across networks, it's unreliable for people to send sensitive information with their transaction.

Ripple solves the above inefficiencies through RippleNet. It uses blockchain technologies for reliable,...

Advanced payment applications

Since Ripple uses blockchain technology, it allows applications beyond transferring money from point to point. Let's have a look at such applications.

Cross-currency payments

At the beginning of this chapter, we saw how ripple enables currency exchange through banks. However, Ripple has built-in exchange features that allow traders to create offers to exchange currencies. This enables people to send cross-currency payments through the Ripple network.

How does it work?

In the first chapter, we learned that Ripple allows you to exchange...

Debunking misconceptions about Ripple

Let's now look into some of the common misconceptions about Ripple. These misconceptions are important because, for investors, these lead to a make-or-break decisions.

Ripple and XRP are not the same

Ripple is a company that makes software products for banks. This company made an open-source distributed ledger or the XRP ledger. This ledger also issues its own currency called XRP. However, all of the software products that Ripple offer doesn't use this XRP ledger.

The xCurrent software we discussed in the last chapter doesn't use the XRP ledger. However, the product uses blockchain technology for cheap and fast payment settlements.

The XRP ledger is decentralized and powered...

Important things to remember

Following are some important things that we need to remember while working with Ripple:

Ripple solves the previous inefficiencies through RippleNet. It uses blockchain technologies for reliable, efficient, and secure payments. Banks can integrate RippleNet into their system to make global payments efficient.
xCurrent is a software that sits between banks and RippleNet. It transforms traditional payment messaging formats into standard messages that are recognized by other users in RippleNet.
Ripple has built-in exchange features that allow traders to create offers to exchange currencies. This enables people to send cross-currency payments through the Ripple network.
Ripple account holders can set deposit authorization on their accounts. This configuration will disable the account from receiving the regular payments. Now, the account will be able...

Summary

In this chapter, we have learned answers to the following questions :

How has Ripple solve inefficiencies of traditional systems to make payments fast and cheap?
What are the applications of Ripple?
What are cross-currency payments?
How do cross-currency payments work?
What are checks in Ripple?
How do checks work in Ripple?
What's an escrow in Ripple?
How does an escrow work in Ripple?
What are payment channels in Ripple?
How does a payment channel in Ripple work?
What is an ICO?
What is a decentralized exchange?
What's the difference between Ripple, XRP, and the XRP ledger?
Has Ripple kept a large amount of XRP from open circulation?
Why is Ripple faster when compared to Bitcoin?
What are the limitations of Ripple's smart contracts?

In the next chapter, we'll learn how to connect to the Ripple network and send money using the Ripple API.

...

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Ripple Quick Start Guide

Published in: Dec 2018Publisher: PacktISBN-13: 9781789532197

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Author (1)

Febin John James

Febin John James is presently working on building autonomous lending and borrowing protocol on the Ethereum blockchain. He also works as a tech and marketing consultant to ICOs and blockchain-based start-ups. He has years of experience in building and scaling tech architectures from scratch. His blockchain stories on Medium have gained a lot of popularity and have been translated into multiple languages. He writes for well-known publications such as Hacker Noon and freeCodeCamp. He is also the author of the book, Cloud is a Piece of Cake. Previously, he worked as the CTO of Boutline, a sports start-up. He has also bagged devices, cash prizes, and recognition from companies such as Intel, Blackberry, and Microsoft.
Read more about Febin John James

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