13 January 2014

Can Ripple Become a Future of Financial System?


Sometimes, you may wonder, what would happen if you would be able to invest your time and money at the very beginning of the company which later turned big (think, Microsoft, Google, or Facebook). You need to be in the right place at the right time, and you should be ready to take a risk. Definitely, for one winner there are thousand losers. But, so what? Calculated risk often pays back great dividends.

First it was Bitcoin. Who could predict that virtual game currency could turn into real investment? There were few believers, there were few early adopters.

According to Norwegian news outlet NRK, Kristoffer Koch decided -- on a whim -- to invest 150 kroner (about $26) in 5,000 bitcoins in 2009, soon after the Bitcoin network first came into existence. Koch is said to have discovered the virtual currency while writing a thesis on encryption and decided to put down a small investment out of sheer curiosity.

Unaware of just how successful bitcoins would soon become, Koch says he promptly forgot about his digital stash; that is, until a flurry of media coverage about bitcoins caught his attention earlier this year.

Koch reportedly had to scour his memory for the password to the encrypted wallet that held his investment. When he finally figured it out in April, he says he was stunned by what he found. "It said I had 5,000 bitcoins in there. Measuring that in today's rates it's about five million kroner," Koch told NRK, according to a Guardian translation. That's about $850,000.

That’s was in April 2013, and the same investment as of today costs is more than $4 million. In June 2012, Bitcoins were worth $5. By April 2013, they were up to $266. Then they dropped to $70 in April, steadily raised by December 2013 to $1,200, and now above $820.

Virtual money turned real! But we all a bit too late to jump in the carriage. But maybe that is not the case with the new trendy start-up Ripple.

Ripple, a platform that just received funding from Google Ventures, Andreessen Horowitz, Lightspeed Venture Partners, and others, has created both an alternative to Bitcoin and a distributed currency exchange for Bitcoiners (and others) who aren’t comfortable using only Ripple’s currency, known as XRP.
The Ripple network is a protocol. It’s like HTTP for money. Users, merchants anyone can use it for free without a license.

The Ripple platform serves two purposes: it’s a distributed open-source payment network, and it’s the home of the newly minted XRP currency. As a payment network, Ripple provides free global payments without chargebacks (minus a $0.0001 per transaction network charge, implemented as a security precaution against hackers), the ability to pay in any currency using a distributed currency exchange, and an open protocol that any developer can use.

Participants can exchange dollars, yen, Euros, and even completely made-up currencies, all of which are entered into the system via "gateways." Larsen says: "A UI designer and myself can be a gateway to each other. A gateway can be a friend, neighborhood, a group. Most gateways will be larger. It’s like the way Paypal works--you give them $100, they create a $100 balance."

The only currency that doesn’t need to be entered into the Ripple platform from a gateway is XRP. This is an advantage over Bitcoin: Ripple is its own currency exchange.

Image and video hosting by TinyPic

What make me think this scheme has a serious future:
* The Ripple protocol is an open standard that can federate existing payment networks, similar to how Simple Mail Transfer Protocol federated messaging systems in the 1980s.
* Currency exchanges in Ripple are automatically processed at the best available rate with no fees or added margins. 
* Ripple allows users or businesses to transact in different currencies without exposing themselves to undesired foreign currency exchange risk. It allows instant cross-currency payments: you can send one currency (dollars, euros, pounds, etc.) and the recipient receives another (yen, yuan, rupees, etc.).
* Ripple can provide fast transactions (transactions can typically be settled in only a few seconds).
* Ripple's was designed to be counterfeit-proof.
* Ripple makes micropayments cost-effective – even payments less than a penny — opening the Internet to business models that would previously have been impossible. 
* No fear of inflation, since the total amount of Ripple currency XRP remains constant.
* Ripple was developed by the people who gained their experience on virtual currencies and translated their knowledge to the new scheme.
* Ripple got support and funding by several very serious entities.

Here are some disadvantages as well:
* While opening Ripple account is easy and very fast, you will not be able to perform any transactions before your Ripple wallet becomes funded.
* You need a very small amount of at least 20 XRP (at the moment 1 XRP costs a bit more than 2 cents), but getting it may be challenging at first. You may purchase it easy, if you have Bitcoins, or with dollars, but the process is very manual. The getaways for such transactions are very crowded, and it may take significant time and efforts to do so.

Image and video hosting by TinyPic

How to start with Ripple:
1. Open your account: https://ripple.com/client/#/login
2. When you first create a Ripple wallet, it will need to be activated before it can be used.  This prevents accounts from being created automatically by computers and used in fraudulent ways. Activating an account involves transferring a minimal number of XRP into the account (this number is currently 20 XRP, though it can change from time to time – see https://ripple.com/wiki/Reserves for details).  Until the account is activated, you will not be able to use it for funding your account with other currencies, sending and receiving, and trading.
3. If you know someone who already has a Ripple account, you can ask your friend to give or lend you the required number of XRP. As said, you can purchase bitcoins and convert them into XRP, which can be used to activate your account. You can participate in one of the Ripple Labs giveaways to get XRP for free.
4. Current giveaway you can get XRP for free is sponsored by ComputingforGood.org. While you donate your idle computing power to scientific research, you will get XRP from Ripple Labs. Anybody with an internet-connected computer or Android device can participate, and unlike mining Bitcoins, does not require super-duper hardware.  Follow the instructions on the site: https://www.computingforgood.org/
5. Install the software, leave it run by itself, and make some Ripples, while giving your unused resources to the just cause, like Cancer Research, Environment, and others.

Other useful links:
1. XRP Talk is holding several giveaways, which will help to start and fund your account. Website: https://xrptalk.org/forum/28-giveaways/
2. SnapSwap.us is giving away 2,000 XRPs when you open up an account and link it to Dwolla! Also, receive 500 XRP with your first deposit of $10.00 or more from your bank account to your Ripple Wallet, and 3 XRP with every subsequent $1.00 deposited, up to 300 XRP per transaction and up to 2,000 XRP total.
3. The OpenCoin.in forum is giving away 1 XRP for every forum post and awarding 100 XRP every week to the member who posts the most that week!
4. Ripple Faucet. Come once a day and enter your Ripple address to get 0.1 to 1 XRP. Not much, but fast and easy. Website: http://ripplegiveaway.com/. Website should be already funded to get into the raffle.

Image and video hosting by TinyPic


Sources and Additional Information:


No comments:

Post a Comment

LinkWithin

Related Posts Plugin for WordPress, Blogger...