Will the Ripple become the new payment protocol for financial institutions?

Ripple Crypto Currency Market

Everyone today knows about the existence of crypto-currencies mainly thanks to Bitcoins. This virtual phenomenon has given way to a large market for digital currencies, both in terms of market cap and existing number. In this article we will discuss the Ripple, the flagship currency of the moment (see ripple euro rates). The ripple project comes from the company RipplePay which appeared in 2004. This project focused on the creation of local currencies within different communities.


After the appearance of Bitcoin in 2012, a new company called Ripple labs was created, which was at the origin of the Ripple Token Issue (XRP). The first idea is to simplify international money transfers by relying on decentralized servers, by having a vision of clearing currency, not payment currency in order to facilitate transactions and make them less costly.

“The goal is to free oneself from what are called peers in the currency market. Instead of exchanging one US dollar for the euro, we will exchange one dollar for XRP and then switch from XRP to the euro,” explains Alexandre Stachtchenko, co-founder.

For individuals, the purchase of the Ripple is simply motivated by the speculative and liquid aspect of it, as they cannot use it on the Ripple network, so the intrinsic utility is nil.

The ripple has caused a strong craze in recent weeks, it appears to some as the replacement for the SWIFT system.

This strong demand from users/speculators has propelled the ripple as the second cryptomone (Capitalization about 145 billion dollars) after the bitcoin (see euro ripple price).

Its price remains around 3 dollars, the ripple to sight its price increase by 60 000% in one year.

Regarding the protocol used, the Ripple blockchain does not use minors to validate blocks of transactions via important calculations unlike Bitcoins or Etherreum. In the Ripple blockchain, all the tokens are already pre-mined (all of them are already created, but only about 40% are in circulation on the market, the others being blocked in a computer escrow) and the transactions are validated through a voting system.

However, this system raises some questions, the ideological domain, so it would be a cryptomonnaies that serves the banking systems. In addition, this fast system reveals lower security.

One last point seems important to me on the criticism, the fact that a large majority of ripples are owned by only a few people (Ripple Labs owns 60% and the two former CEO 20%) is a dependency problem.

“Beyond the fact that these people de facto control the market, imagine if in 20 years’ time the technology was used by all banks. The power these people would have over the global economy would be a serious problem,” said Alexander Stashchenko.

The other co-founder Chris Larsen became virtually the fifth richest man in the world on Thursday, January 4. With a valuation of his assets exceeding 59 billion dollars, he even doubles Facebook boss Mark Zuckerberg.

Chris Larsen holds XRP 5.19 billion (Ripple’s virtual currency) and 17% of the company’s shares. The XRP reached an all-time high of $3.82 while it was still trading at $0.25 in mid-December, an increase of 1.428% in three short weeks.

Alexandre CAMPOS

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