What is Blockchain?
By: Elena Alehno
Tags: Blockchain, Blockchain Development

Blockchain technology has been created by Satoshi Nakamoto in 2008 by an unknown entity which serves as a public transaction ledger for bitcoin. Bitcoin is an electronic peer-to- peer system which allows a user to send a sum of money to any other user, at any time and at any place. The blockchain is a block of data that records information within blocks that is linked to cryptography which contains a hash of the previous block, a timestamp and transaction data (the Merkle tree).

The distribution ledger is managed by a peer-to-peer network communicating between the protocol and node communication for the validation of new blocks, which is also called mining. The ledger cannot be altered without alteration of all previous blocks, which requires people who are mining to agree with each other for alteration, which leaves a secure ledger.

Mining is a process in which a user connects to the blockchain protocol and uses their computer system to help the flow of transactions by allowing their computer to solve computational by using CPU (computer processors) or GPU (graphic card processors) problems for a sum of bitcoin as a reward.

Decentralized Monetary System

Blockchain technology is decentralized which means it eliminates various numbers of centralized risks that come with data being held centrally. Which means anyone who uses Blockchain is a network which is cryptographically secure which lacks centralized points that computer crackers can exploit. Blockchain’s security methods are:

Public Key — which is a random long string of characters that consists of numbers and letters. (An address which you will be able to send and receive bitcoin) 2. Private Key — also a random string, is like the bank password that gives you access to your virtual wallet. These security measures that are cryptographically generated at random will allow you secure access.

Ripple (XRP)

There are many different use cases for blockchain technology, one of the ways we can see blockchain being used is by settlement and the transaction of money. Let’s take XRP for an example, as you may have heard there is a payment protocol being developed on top of this digital asset. Early versions of XRP was created by Ryan Fugger which dates back to the year 2004 and in 2012 that’s when the protocol really began development.

The history of Ripple and XRP Ripple is a company founded in 2012 that helped develop XRP and the current Ripple Protocol. Chris Larsen, the founder of E-Loans and Prosper, set up a company called OpenCoin to develop Ryan Fugger’s Ripple network concept. 100 billion XRP tokens were issued to run on the protocol and power it.

OpenCoin changed its name to Ripple in 2015 and made Ripple’s network open source, meaning anyone can work on it. Ripple maintained the major contributor to the code. The code can be found on Github where most blockchain projects host their code and where anyone can become a contributor to the source code. Why Ripple is life changing XRP is life changing because it allows people to send money across digitally and instantly and is meant to be a better version of Bitcoin, which suffers from high transaction costs, high volatility and slow settlement times. The features of XRP is that it can settle transactions in under 4 seconds and can handle over 1,500 transactions per second which is far more than what the Bitcoin network can handle.

According to an early version of Ripple’s website there were 3 main solutions, xRapid, xCurrent and xVia. The sole purpose of xRapid is for low cost liquidity, this solution is for payment providers and other financial institutions who want to minimize liquidity costs while improving customer experience. Since emerging markets often require nostro/vostro accounts which are pre-funded local currency accounts, liquidity costs are high, xRapid decreases the capital requirements for liquidity. Another unique feature of this life changing technology is that it uses the digital asset XRP as a bridge currency which allows for a highly efficient, scalable and reliable liquidity for cross border payments. Secondly, xCurrent is Ripple’s instant and certain settlement solution which enables banks and financial institutions to instantly settle cross border payments with end-to-end tracking.

xCurrent allows for banks to communicate witch each other in real-time to confirm payment details prior to initiating the transaction to confirm delivery once it settles. Ripple’s rulebook ensures that operational consistency and legal clarity remains for every transaction on the network. Finally, xVia is Ripple’s last solution is a standard payments interface in which corporations, payment providers, banks and financial institutions can use to send payments across various networks using xVia’s interface. It’s simple to install and requires on software. It promotes payment tracking, capital efficiency, and rich data transfer. Earlier this year Ripple has decided to combine all these solutions into one solution called the RippleNet a growing payments network. RippleNet is becoming the standard and the future of payments XRP is the foundation of RippleNet and it is becoming a growing global network. Over 180+ institutions joined RippleNet and they include MUFG Bank, Santander, TransferGo, MoneyGram, CIMB Bank, American Express, SBI Remit, Instarem, Axis Bank, Bank of America and many more.

In recent years Ripple has been conversating with the Federal Reserve and is looking to enable faster payments for the United States, Ripple also has strong connections with people who work for the government and is on the Faster Payments Task Force with Ryan Zagone as an elected member of the Task Force Steering Committee in which he will work on financial institutional infrastructure efforts for faster payment initiatives globally. The United States is behind on faster payments and hasn’t added any new technical innovation to the legacy financial systems in the past 40 years, but a couple weeks ago the Federal Reserve announced a new service called FedNow which could be a bullish sign for XRP investors, hopefully this service truly allows for faster payments because this would dramatically change our economy. This is just the beginning of the future of payments. Everybody believes this technology will change our lives and benefit all businesses and consumers in the United States and around the world.