In June 2017 there was around 900 Crypto currencies. Each of these crypto's addresses different issues in our world and also have different business models.
You can view a full list of all crypto currencies here
I have been writing posts aimed at non-technical people and decided I will expand this series to include explanations for various crypto currencies. Please feel free to drop me a message in the comments section should you have a specific question or interest which you want me to explain in Laymen's terms.
Ripple explained in Laymen's terms.
The easiest way to explain Ripple is that it is both a currency and a payment protocol. It is based on a very old concept or process, called Hawala, which was a non-digital way of transferring money from city to city in the event where there were no banks in operation.
Example for Hawala:
- Ben goes to a local agent and gives him money to send cash to Gertrude. He also gave Gertrude a password.
- The agent then phones Agent B and gives the go-ahead to somebody that has the password.
- Gertrude goes to Agent B, provides the answer and receives the cash.
How does Ripple work?
Websites, shops and people doing business can now use Ripple to a similar effect than Hawala. Ben goes to his Ripple gateway and deposits cash, and instruct the network to release the money through Gertrude's Ripple gateway. That's it. You now understand how Ripple works :)
But Ripple does not only transact in cash, you can basically exchange anything on the Ripple network as long as the gateway will deal in them.
Thinking back to the Hawala system, what if Gertrude's agent does not deal with the specific item that Ben and Gertrude wants to trade in? Well, that is where Ripple's come in. The Ripple algorithm always look for the shortest distance of trusted parties. Let's say Gertrude's agent did not trust Ben agent, but there is Agent C who is trusted by Gertrude's Agent, the network will ensure that the transaction happens.
There was a very nice Coindesk Article way back in 2014 which explains it nicely.
This is where 'ripples' (XRP) come in. XRP is the 'currency of last resort' for the ripple network.
All gateways provide a price in XRP of anything they deal in (for example: a dollar is 200 XRP; 1 oz of gold might be 260,000 XRP).
You could say, USD is the currency of last resort in the USA – that is, everything has a price in USD.
This means, within the Ripple network, you can convert anything to a number of XRPs, transfer the XRPs via the trust chains, then convert back at the end gateway, if needed.
There is more here, and as you dig, you'll learn about market makers, who provide prices at which they are prepared to trade between goods (for example, cash for gold, gold for silver, silver for XRP, XRP for GBP, and so on).
Some of my other in Laymen's Terms Post.
Some of these posts have been written more than 10 Months ago :)
Artificial Intelligence in Laymen's terms
Blockchain and Digital Signatures - In Laymen's Terms
Trustless - What does it mean in laymen's terms?
Cyber Attacks explained in laymen's terms
Machine Learning - In laymen's terms
Internet of things and what it is in laymen's terms
Big data - What is it really about - In laymen’s terms
Happy Steeming!
I think you have explained it in very simple way. Thank you @jacor
Thank you for your insight! This was very helpful to a beginnger in the crypto world like myself. I feel as if Ripple and its technology will be adopted across many banks and institutional money will start flowing in. It has many uses and can create many cost effective approaches that cannot be ignored. I look forward to reading more of your content.
Awesome post. Would love to see more of this for other currencies :)
Thanks for the informative post. It seems Ripple is an interesting block chain system that will be used replace the existing cumbersome money transfer system used by banks.
Ripple will be one of few currencies that will actually survive
Not sure what your thought are on "few" currencies that survive, but my opinion is there will be a large number of currencies that survive. While I believe the joke currencies will die away, there will be a number of currencies that serve a purpose. That is part of the beauty of building a currency on a blockchain. You can tailor it to fit specific sets or applications. I highly doubt there will be a one or handful of currencies that "fit" all.
You are not looking at the next one big thing, but you are looking at emergence of an entirely new market that is here to stay and slowly replace fiat. I wrote another post on where I think the market is going that is very relevant to this, I'll drop it below:
"Bitcoin and cryptocurrency in general are still in their infancy. The market cap is at 173 billion. This is a technological innovation that I believe will change currency and take over fiat for good. It comes at a very interesting time, where companies are racing to bring the internet to the half of the world that does not have it. As this happens, it opens the entire worlds currency to the potential to move to digital.
That opens the question of what is the currencies potential. Well in my opinion, it would be that of the world market cap, which would put it at 70 trillion dollars. That means that we are currently still in the innovator phase of the technology adaptation. This is the term assigned to technologies below a 2.58% adoption rate.
As we move forward along the technology adoption curve, we will pass through several additional phases, the early adopters phase, the early majority phase and the late majority phase. During these phases, the rate of growth increases drastically as we move into the early adoption phase and then goes almost exponentially into the early majority phase, and then tails off a little as we progress into the middle of the late majority phase. What this means is that the biggest growth for the cryptocurrency market is still well ahead of us. We should see the prices of cryptocurrency continue upward for a long long time as the market cap continues to increase and the growth rate continues to increase."
Yo tengo Ripley y es útil para eobot
Yo tengo Ripley. Sirve para el eobot, pero
Thanks bro .... Are you advise us to buy and order this Ripple?
This is where the risk in XRP the token comes in and the rewards are so huge. If large banks use XRP the token to transfer large sums of money from one bank to another they will need to buy up large sums of XRP the token.
If XRP the technology is used, but banks decide not to use XRP the token then the currency is virtually worthless except for the fact that people will be left bag holding.
This is why investing in XRP tokens are so risky.
great job bro.
Nicely explained. I haven't faced any difficulties in understanding this one. thanks.
Thanks for taking the time out and sharing the info. I am looking to buy some Ripple but it can be super frustrating going thru all the verification steps to open a crypto account. I understand it is for our own protection I just wish it wasn't so difficult.
Thank you much
Ripple = Debt
Oh wow, that was super helpful, thanks @jacor! I've been making money in traditional financial avenues, but I'm trying to learn more about the blockchain.
Can you explain the difference between Dash and Ripple in 30 words or less? :)
thank you for such explanation for beginners like me. very informative and easy to understand, hope you can give more writeup for other currencies too:)
Viva
Thanks for sharing and explaining great info graphics too
How can i learn how to read crypto charts
This was very simple and clear, keep it up!
This was very simple and clear, keep it up!
good read
I like Ripple and was amazed to see its algorithm work in action to find the shortest distance between Chinese Yuan and Euro. It went through 10+ transaction to sort out and took milliseconds.
Thanks for a really informative article!
One question: what is the size of the global transfer market that Ripple could theoretically tap into; at least for banking institutions, if not others?
Nice and easy explanation. I am excited about Ripple.
I notice that someone stole your post , you need to report him :
https://steemit.com/@einarkusk/crypto-currencies-explained-in-laymen-s-terms-ripple
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