What is Ripple? Programmer explains.

what is going on guys welcome back to my channel and today we’re going to talk about triple because ripple has really skyrocketed it is on everybody’s mind it has surpassed etherium as number two cryptocurrency when it comes to market cap and we are going to talk about what happened and why we saw this amazing growth and so before we start I want to remind you that if you go to Academy that I have an on take that calm you can buy my online course on presale before February the 1st and get 50% off actually more than 50% off and this course will guide you by the hand when it comes to fundamentals in blockchain technology you will understand all about blockchain all about Bitcoin the theorem consensus algorithms mining and so on so please check out Academy that iron on tech comm and that being said guys let’s get into the video so the recent increase in price is most likely due to the news from Japan and South Korea mainly that ripple has on board that banks from those countries to use ripple infrastructure to do payments and international bank payments international bank transfers is where ripple has its biggest use case so for example if I want to send some money from Sweden to Norway my Swedish bank would need to have a nostra account in the Norwegian bank and the Norwegian bank would need to have a nostra account in my Swedish bank meaning that my bank has some money in the Norwegian bank and the Norwegian Bank has some money in my bank so when I do a transfer from Sweden to Norway when I do an international transfer my Swedish bank would debit the Norwegian bank account the nostril count of the Norwegian Bank and the Norwegian bank would credit the nostril count of my Swedish bank and then my friend would receive the funds and as you can see it is extremely extremely complicated structure we have here that if I want to do business I need to have a nostril account and in many cases there are no direct nostril counts with all the banks of course your bank cannot have money in all the in all other banks in the world so instead we do some kind of routing we have many intermediaries maybe maybe I don’t have a nostril account in the Norwegian bank but my bank has an account in a Finnish bank so instead we would have this bank in Finland as an intermediary and then this Finnish bank would have to have a nasser account in the norwegian bank so as you can see it is extremely complicated it is why it takes several days to clear an international transaction and this is the problem ripple is trying to solve in this space of banking there is another problem with this current system that the banks are facing namely counterparty risk so let’s go back to the example where my Swedish bank had some funds in the Norwegian bank this means that there’s some kind of trust here for example let’s imagine for a second that Norway runs out of oil and the whole economy crashes and suddenly this Norwegian Bank goes bankrupt what does it mean well it means that the money that my Swedish bank had in that Norwegian bank account is lost so as you can see there is a risk involved and this example is only a joke I’m sure your oil will be there for many years and then you can just switch to fish if you run out of oil dear Norwegians so repulsed solve several problems for banks number one the time it takes to move money and the number two counterparty risks so how would ripple solve this first of all when we’re talking about ripple we have to keep in mind that triple means several things ripple is a corporation the company behind the technology that is really pushing and selling this technology then we have rippled the protocol the payment protocol and then we have XRP digital asset the cryptocurrency you see traded so how would this situation with international payments change if banks would use ripple instead well ripple described themselves as a global exchange for anything of value meaning that my Swedish bank would be able to use this global exchange in order to send money to Norway directly and to do that we would have to use XRP to pay the trade the transaction fee and so the fees are used in this exchange in order to prevent spam so when you do a transaction on this exchange for example from Swedish crowns to Norwegian crowns the transaction fee would just disappear it would not go to the ripple corporation it will just vanish so you suggest a spam prevention mechanism and this fee has to be paid in XRP and so this is where value of the XRP token comes from and so this is not only between currencies ripple claim but it can be used for anything of value so for example if you have your bonus from your loyalty points from your grocery shop you should be able to convert it from your grocery points to Bitcoin for example using this exchange as you can see it’s important to understand what we’re really talking about when we say the word ripple because ripple is a company it is this technology for exchanging value and the protocol and it is also a cryptocurrency this excerpt p cryptocurrency and sometimes people say I just invested in ripple well you invested in the excerpt P cryptocurrency that is used as a native token in this exchange protocol in the ripple protocol another thing we have to keep in mind is that ripple was created for a reason it was created to build out the infrastructure for the banking sector while bitcoin and litecoin and other cryptocurrencies were created just for the sake of digital cash so it is a clear difference when it comes to a use case another important thing to realize is that the ripple Corporation have a lot of excerpted tokens and this is in my understanding how they intend on profiting from this technology from their work because as you remember the transaction fees do not go to them if the extra P token goes up in value they will of course profit and they will also use their exxor P in order to onboard new banks and new players onto the network something else that we have to mention is that the ripple corporation themselves do not control the protocol the protocol is on the network I mean people are running this ripple protocol so there is no way for the ripple corporation to force everyone to upgrade or to force everyone to change the protocol much like in Bitcoin the Bitcoin developers for example did Concord they cannot force everyone to upgrade to the latest software so this is something we really have to keep in mind that being said of course there is a clear ideological difference between crypto currencies such as Bitcoin such as a theorem litecoin and ripple because with Bitcoin with litecoin this community is really pushing for a fundamental change in how finance works that we shouldn’t even need institutions in order to do transactions overseas why is it even needed when I can just use Bitcoin in order to transact all over the world or light going over iota or whatever so I think it’s important to realize what ripple is made for it is made for the traditional banking system in order to make it more efficient and not to confuse it with Bitcoin or litecoin or other cryptocurrencies we normally talk about and banks will of course try to make their infrastructure a lot smoother a lot faster because they see the growth of cryptocurrencies they see the problems they have that it takes forever to transact the Overseas it is slow it is inefficient and so on and so forth and of course they will invest in technologies that solve this issue and ripple is such a technology because what is the banking day even wide why aren’t banks open 24/7 we’re living in a global world why should I wait when until the weekend ends before I can send my money for example now we’ll have New Year it will be several days where you cannot do anything financially which is of course a pain and I think this pain will be solved when it comes to the traditional banking space with technologies such as triple so guys I hope you understand what triple is I hope you have more insight what it will be used for and I hope you also have a more overview of the ideology of the use case that being said guys please smash the well button so that you’re always up to date and if you knew you were you should definitely subscribe to the channel because you will find this channel interesting I myself am a software developer and I’ll see you guys next time

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