Perhaps we should take a step back, though. Some readers might be unfamiliar with Ripple and its unique place in the cryptocurrency world.
If so, welcome.
Don’t be nervous. Cryptocurrencies sound much scarier than they are, particularly with the jargon that is incomprehensible to outsiders. It’s not that complicated, really.
Ripple is attempting to disrupt “SWIFT,” an international payments service that runs a de facto monopoly across the globe. SWIFT has 11,000 client institutions in over 200 countries.
Those of you that have sent an overseas bank transfer know exactly what I’m talking about. There is an identification number required for the payment to be processed that is literally known as the “SWIFT code.”
Anytime you send money via SWIFT, the money travels from your bank to a server elsewhere in the world, and then onto the recipient bank. Those servers are like gigantic highways running endless series of Brink’s trucks on them.
In other words, they are amazing targets for criminals.
Cryptocurrency Price Predictions 2018: Ripple Is the Clear Winner
Ripple thinks the whole idea of running payments on a highway is silly. It wants to run those payments on a blockchain network, which is the technology pioneered by Bitcoin.
In a blockchain system, money is held everywhere, simultaneously, on thousands of computers. Each account is accessible by a cryptographic key (a really long password of numbers and letters that is impossible to hack) and each transaction is recorded on the public ledger.
There are many different blockchains, but Ripple wants to be the central one that clears transactions for the rest. It developed Interledger for precisely this purpose, to connect all the various blockchains so that transactions can go from one currency to the other.
But to zoom back out to the 10,000-foot view, Ripple is essentially a company taking on an existing monopoly in the world of finance. SWIFT faces nearly no serious competition in its line of business.
