Ripple, like Bitcoin, helps people transfer money across the globe more easily. However, whereas Bitcoin is a currency, Ripple is an internet protocol that enables financial transactions in any currency to take place. For instance, a user may send dollars and get euros through Ripple.
Ripple Labs, headquartered in San Francisco, wants to make Ripple the standard protocol for transferring money across the world as cheaply and rapidly as sending an email.
Gary Kremen, who founded Match.com and recently launched CrossCoin Ventures, an accelerator that mentors Ripple-based startups and helps them tackle finance-specific challenges like compliance and customer-service requirements, spoke with us to learn more about Ripple and how it might affect small-business transactions.
Ripple’s benefits are many.
Ripple, like Bitcoin, is a decentralized global ledger and database. Without having to go through a central clearinghouse, computers on the Ripple network can automatically agree on updates to the ledger in seconds via a process known as consensus. Its main technological achievement was the settlement speed. Ripple transactions usually settle in three to five seconds, compared to up to 40 minutes for Bitcoin transactions.
Ripple’s contribution to small companies is unclear.
In a matter of seconds, small companies will be able to accept money from consumers from all around the world. Credit card transactions may take up to three days to reach a small company’ bank account these days. Getting that money sooner is a huge assistance when it comes to managing a company’s cash flow on a daily basis.
Because Ripple makes money transfers virtually free, credit card firms are expected to reduce transaction fees to compete, lowering small businesses’ expenses. Today’s small companies bear a disproportionate share of credit card costs. Small companies, on the other hand, are unable to negotiate better prices.
Ripple has a number of advantages for small businesses who conduct a lot of business internationally. The typical transfer charge is 7%, and it may take up to five days to transfer money internationally. Ripple transfers money in three to five seconds and charges minimal or no fees.
Do you think Ripple will become more widely accepted? If that’s the case, when should it happen?
Cryptocurrencies take time to develop; they’re rebuilding the financial services infrastructure from the ground up. However, I believe the odds are favorable. Ripple Labs is focused on regulatory compliance and gaining support from banks and regulators. In the next 24 months, I don’t rule out Ripple being used to power daily purchases.
What is the source of revenue for the Ripple team?
Ripple is an open-source protocol that is meant to be used by the general public; Ripple Labs does not own or control it. It did, however, develop its own crypto-currency, dubbed XRP, to help with transactions. Wall Street has the ability to exchange XRP for other currencies and offer cross-currency liquidity. This aids in the determination of Ripple transaction exchange rates by the market.
At the time of Ripple’s creation, one hundred billion XRPs were produced, and no more may be made, similar to how Bitcoin was formed. However, unlike Bitcoin, Ripple’s XRP cannot be mined. One of Ripple’s creators was a Bitcoin user who objected to the energy-intensive [computer] mining procedure required to generate each Bitcoin, so he developed Ripple without it. To address your question, Ripple Labs owns approximately 25% of the currency and uses it to finance its operations.
67 percent is the figure.
According to the Internet Society’s “Global Internet Report 2014,” the US is ranked 30th among nations having the fastest average internet speed.
Downloads in the United States, the Western Hemisphere’s quickest nation, are 67 percent slower than in Hong Kong, which is rated first. Good news, right? In terms of mobile broadband access, the US is ranked 10th in the world.