Story of the most succesful centralized blockchain: Ripple
The history of Ripple began in 2004–2005, when Ryan Fugger, a programmer from Canada, developed RipplePay, a decentralized payment system that allowed anyone to create their own currency and pay with it in the RipplePay system.
Until 2011, this project was not particularly popular, so its founders decided to focus on payment protocols operating in a decentralized network. Thus, the company Ripple Labs.
A few years later, Ripple Labs began offering banking institutions to test their development - the Ripple Token (XRP) to financial institutions in Europe, America, and Australia.
Ripple is a platform focused on exchange transactions and other tasks in the financial sector.
This is an alternative for banks method of calculation, more secure, faster and cheaper than the traditional one.
By the way, did you know Vitalik Buterin unsuccessfully applied for an internship at Ripple?
How Ripple blockchain functions
Ripple Blockchain is private and, more correctly, centralized.
Network users only have the right to read blockchain data, while transaction checks and other functions are left to trusted sites, which are determined and controlled by the founding company (Ripple).
This is the complete opposite of the public blockchain, in which the opposite is complete decentralization and control of the system by the users.
In the Ripple system, the user can store funds in Fiat (dollars, euros, yen) and simultaneously pay in bitcoins or even gold.
At the same time, the network freely “converts” currencies through market makers. This is a kind of exchange points that compete with each other for the right to earn money on the difference in selling/buying prices.
Other major features of Ripple are:
- Cryptocurrency is not mineable. Developers issued 10 billion coins. Of those, they left 65% for themselves and transferred the rest to the market.
- Low fees. By processing each transaction, the system debits a commission of 0.00001 XRP. In the case of spam transactions, the commission amount will automatically rise until such a type of attack on the network becomes unprofitable.
- High level of trust towards the nodes. It's not easy to become a Ripple node, unless of course you are a bank or a large company.
- Scalable. Ripple is able to process about 1,500 transactions per second.
- Bitcoin bridge A feature that allows Ripple users to send payments in any currency to a Bitcoin address without the need for additional exchange services to purchase them. The exchange will occur on the fly during the transfer. For such payments a separate node was launched - Bitstamp.
- Burning commissions. The aforementioned commissions are burned after the payment is made.
- Reversibility of transactions. A completed transaction can be corrected if there is an error or cancel.
From the last point follows the main feature - centralization. Ripple has a monopoly on most of the crypt (65%).
Theoretically, she can independently manage the course.
Ripple is the perfect financial system. With it, you can significantly reduce costs.
But from the point of view of the cryptocurrency market, this coin is centralized, which contradicts the main principles of cryptocurrency.