Know more about Blockchain: Overview, Technology, Application Areas and Use Cases

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Ripple is a real-time gross settlement system RTGScurrency exchange and remittance network created by the Ripple blockchain payments technology. Also called the Blockchain payments technology Transaction Protocol RTXP or Ripple protocol, [3] it is built upon a distributed open source internet protocolconsensus ledger and native cryptocurrency abbreviated as XRP ripples.

Released inRipple purports to enable "secure, instantly and nearly free global financial transactions of any size with no chargebacks. The network can operate without the Ripple company. Used by companies such as UniCreditUBS and SantanderRipple has been increasingly adopted by banks and payment networks as settlement infrastructure technology, [10] with American Banker explaining that "from banks' blockchain payments technology, distributed ledgers like the Ripple system have a number of advantages over cryptocurrencies like bitcoin.

As of the first week of MarchXRP is the third largest coin by market capitalization. The predecessor to the Ripple payment protocol, Ripplepay, was first developed in by Ryan Fugger, [14] [15] a web developer blockchain payments technology Vancouver, Blockchain payments technology Columbia. Fugger's first iteration of this system, RipplePay. After discussions with long-standing members of the Ripple community, Fugger handed over the reins. The bitcoin Bridge allows Ripple users to send a payment in any currency to a bitcoin address.

ByRipple Labs was involved in several development projects related to the protocol, releasing for example an iOS client app for the iPhone that allows iPhone users to send and receive any currency via their phones.

Sincethe protocol has been adopted by an blockchain payments technology number of financial institutions to "[offer] an alternative remittance option" to consumers. Fidor is an online-only bank based in Germany. The partnership marked the first network usage of the Ripple protocol. In FebruaryFidor Bank announced they would be using the Ripple protocol to implement a new real-time international money transfer network, [44] and in late Aprilit was announced that Western Union was planning to "experiment" with Ripple.

The year and marked the expansion of Ripple company with the opening of an office in SydneyAustralia in April [49] and the opening of European offices in LondonUnited Kingdom in March [50] then in Luxembourg in June On September 23,Ripple announced the creation of the first interbank group for global payments based on distributed financial technology.

The group will "oversee the creation and maintenance of Ripple payment transaction rules, formalized standards for activity using Blockchain payments technology, and other actions to support the implementation of Ripple payment capabilities. Ripple's website describes the open-source protocol as "basic infrastructure technology for interbank transactions — a neutral utility for financial institutions and systems.

In Ripple, users make payments between each other by using cryptographically signed transactions denominated in either fiat currencies or Ripple's internal currency XRP.

For XRP-denominated transactions Ripple can make use of its internal ledger, while for payments denominated in other assets, the Ripple ledger only records the amounts owed, with assets represented as debt obligations. In order to send assets between users that have not directly established a trust relationship, the system tries to find a path blockchain payments technology the two users such that each link of the blockchain payments technology is between two users that do have a trust relationship.

All balances along the path are then adjusted simultaneously and atomically. It has similarities to the age-old hawala system. A gateway is any person or organization that enables users to put money into and take money out of Ripple's liquidity pool. Furthermore, gateways redeem ledger balances against the deposits they hold when currency blockchain payments technology withdrawn. In practice, blockchain payments technology are similar blockchain payments technology banks, yet they share one global ledger known as the Ripple protocol.

Depending on the type and degree blockchain payments technology interaction a user has with a gateway, the gateway may have anti-money laundering AML or know your customer KYC policies requiring verification of identification, address, nationality, etc.

Furthermore, the user must put blockchain payments technology quantitative limit on this trust and create a similar limit for each currency on deposit at that gateway. Though their total balance doesn't alter, users earn a small transit fee for providing inter-gateway liquidity.

Similar to reasons during the Free Banking Era in the United States, the value of a currency can vary significantly depending on a gateway's creditworthiness. A non-profit trade associationthe International Ripple Business Association IRBAprovides unified procedures and disclosure standards for gateways. Ripple relies on a common shared ledger, which is a distributed database storing information about all Ripple accounts.

The network is "managed by a network of independent validating servers that constantly compare their transaction records. Ripple Labs is currently assisting banks in integrating with the Ripple network. A transaction is any proposed change to the ledger and can be introduced by any server to the network. The consensus process is distributed, [92] and the goal of consensus is for each server to apply the same set of transactions to the current ledger. Each round of consensus reduces disagreement, until the supermajority is reached.

While users may assemble their own UNL nodes and have full control over which nodes they trust, Ripple Labs acknowledges that most people will use the default UNL supplied by their client. In early[93] a rival company called the Stellar Foundation [94] experienced a network crash.

Mazieres declared the Stellar system unlikely to be safe when operating with "more than one validating node," [95] arguing that when consensus is not reached, a ledger fork occurs with parts of the network disagreeing over accepted transactions. Ripple blockchain payments technology users or businesses to conduct cross-currency transactions [98] in 3 to 5 seconds.

Payments can only be authorized by the account holder and all payments are processed automatically without any third parties or intermediaries. The bitcoin bridge is a link between the Ripple and bitcoin ecosystems. The bridge makes it possible to pay any bitcoin user straight from a Ripple account without ever needing to hold any of the digital currency.

Additionally, any merchant accepting bitcoins has the potential to accept any currency in the world. For example, a Ripple user may prefer to keep money in USD and not own bitcoins. A merchant, however, may desire payment in bitcoin. The bitcoin bridge allows any Ripple user to send bitcoins without having to use a central exchange such as BTC-e to acquire them. While transaction information on the ledger is public, payment information is not.

Any user on Ripple can act as a market maker by offering an arbitrage service such as providing market liquidityintra-gateway currency conversionrippling, etc. Market makers can also be hedge funds or currency trading desks. According to the Ripple website, "by holding balances in blockchain payments technology currencies and connecting to multiple gateways, market makers facilitate payments between users where no blockchain payments technology trust exists, enabling exchanges across gateways.

Ripple can be used to trade or convert currencies, to blockchain payments technology money in one currency and the recipient to receive it in another currency. One of the earliest extensions by third-party developers was a Ripple extension to e-commerce platform Magentowhich enables Magento to read the Ripple public ledger and create an invoice.

There has been a Ripple Wallet payment option developed for retail situations as well [34]. XRP is the native currency of blockchain payments technology Ripple network. XRP are currently divisible to 6 decimal places, and the smallest unit is called a drop blockchain payments technology 1 million blockchain payments technology equaling 1 XRP. The other currencies in the Ripple network are debt instruments i. The purpose for this requirement is discussed in the anti-spam section.

Of the billion created, 20 billion XRP were retained by the creators, who were also the blockchain payments technology of Ripple Labs. The escrow will allow them to use up to 1 billion monthly and return whatever is unused at the end of each month to the back of the escrow queue in the form of an additional month-long contract, starting the process all over.

One of the specific functions of XRP is as a bridge currency, [] which can be necessary if no direct exchange is available between blockchain payments technology currencies at a specific time, [] for example when transacting between two rarely traded currency pairs. The feature is also intended to expose more of the network to liquidity and better FX rates.

When a user conducts a blockchain payments technology transaction in a non-native currency, Ripple charges a transaction fee. The purpose of the fees is to protect against network flooding by making the attacks too expensive for hackers. If Ripple were blockchain payments technology free to access, adversaries could broadcast large amounts of "ledger spam" i. This transaction fee is not collected by anyone; the XRP is destroyed and ceases to exist. Since its debut the Ripple protocol has received a fair amount of attention in both the financial and mainstream press.

Though XRP is third in market capitalization to bitcoin as blockchain payments technology digital currency, [] many members of the press have described Ripple as an up-and-coming rival to bitcoin. In lateBloomberg called bitcoin a "failing" digital currency, after bitcoin's currency fell 54 percent in value in one year.

Ripple was described as a significant competitor, in part because of its real-time international money transfers. Ripple is the winner. The reaction to XRP is polarized in the crypto-currency community. However, Esquire countered in that blockchain payments technology that is devious, then so is every company that's ever gone public while retaining the great bulk of its shares. Ripple has also been criticized for not being truly decentralized, or for using blockchain payments technology a few core validation nodes for transaction consensus, compared to Bitcoin and Ethereum in the five digits.

Bitcoin developer Peter Todd notes, ". Ripple's technical documentation blockchain payments technology make any of blockchain payments technology risks clear — nowhere do they describe in detail how nodes can fall out of consensus with one another if their UNLs Unique Node List don't match. From Wikipedia, the free encyclopedia. Retrieved May 14, Retrieved January 25, Retrieved June 9, The Wall Street Journal Pro. Retrieved January 28, Ripple is HTTP for money".

Retrieved January 26, Institute of International Finance. Retrieved August 17, Blockchain payments technology August 19, The Blockchain payments technology York Times. The New York Times Company. Retrieved February 6, Internet and Network Economics: Institute of Electrical and Electronics Engineers. Blockchain payments technology January 27, Retrieved 18 March Archived from the original on February 7, Stanford Graduate School of Business.

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A blockchain , [1] [2] [3] originally block chain , [4] [5] is a continuously growing list of records , called blocks , which are linked and secured using cryptography. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain.

Blockchain was invented by Satoshi Nakamoto in for use in the cryptocurrency bitcoin , as its public transaction ledger. The bitcoin design has been the inspiration for other applications.

The first work on a cryptographically secured chain of blocks was described in by Stuart Haber and W. The first blockchain was conceptualized by a person or group of people known as Satoshi Nakamoto in It was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.

The words block and chain were used separately in Satoshi Nakamoto's original paper, but were eventually popularized as a single word, blockchain, by The term blockchain 2. Second-generation blockchain technology makes it possible to store an individual's "persistent digital ID and persona" and provides an avenue to help solve the problem of social inequality by "potentially changing the way wealth is distributed".

In , the central securities depository of the Russian Federation NSD announced a pilot project, based on the Nxt blockchain 2. A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.

They are authenticated by mass collaboration powered by collective self-interests. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. Blockchains have been described as a value -exchange protocol.

Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree. The linked blocks form a chain. Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher value can be selected over others.

Blocks not selected for inclusion in the chain are called orphan blocks. They keep only the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version usually the old version with a single new block added they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever.

Because blockchains are typically built to add the score of new blocks onto old blocks and because there are incentives to work only on extending with new blocks rather than overwriting old blocks, the probability of an entry becoming superseded goes down exponentially [34] as more blocks are built on top of it, eventually becoming very low. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner.

The block time is the average time it takes for the network to generate one extra block in the blockchain. In cryptocurrency, this is practically when the money transaction takes place, so a shorter block time means faster transactions.

The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes. A hard fork is a rule change such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid.

In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software. If one group of nodes continues to use the old software while the other nodes use the new software, a split can occur. For example, Ethereum has hard-forked to "make whole" the investors in The DAO , which had been hacked by exploiting a vulnerability in its code. In the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange.

The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment. Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; likewise, it has no central point of failure.

Blockchain security methods include the use of public-key cryptography. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible.

While centralized data is more easily controlled, information and data manipulation are possible. By decentralizing data on an accessible ledger, public blockchains make block-level data transparent to everyone involved. Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication [9] and computational trust. No centralized "official" copy exists and no user is "trusted" more than any other.

Messages are delivered on a best-effort basis. Mining nodes validate transactions, [33] add them to the block they are building, and then broadcast the completed block to other nodes. Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view.

Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized permissioned by a central authority should be considered a blockchain. These blockchains serve as a distributed version of multiversion concurrency control MVCC in databases.

The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed. Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. Financial companies have not prioritised decentralized blockchains.

Permissioned blockchains use an access control layer to govern who has access to the network. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect. The New York Times noted in both and that many corporations are using blockchain networks "with private blockchains, independent of the public system. Nikolai Hampton pointed out in Computerworld that "There is also no need for a '51 percent' attack on a private blockchain, as the private blockchain most likely already controls percent of all block creation resources.

If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control percent of their network and alter transactions however you wished. It's unlikely that any private blockchain will try to protect records using gigawatts of computing power—it's time consuming and expensive.

This means that many in-house blockchain solutions will be nothing more than cumbersome databases. Data interchange between participants in a blockchain is a technical challenge that could inhibit blockchain's adoption and use. This has not yet become an issue because thus far participants in a blockchain have agreed either tacitly or actively on metadata standards.

Standardized metadata will be the best approach for permissioned blockchains such as payments and securities trading with high transaction volumes and a limited number of participants.

Such standards reduce the transaction overhead for the blockchain without imposing burdensome mapping and translation requirements on the participants. However, Robert Kugel of Ventana Research points out that general purpose commercial blockchains require a system of self-describing data to permit automated data interchange.

According to Kugel, by enabling universal data interchange, self-describing data can greatly expand the number of participants in permissioned commercial blockchains without having to concentrate control of these blockchains to a limited number of behemoths.

Self-describing data also facilitates the integration of data between disparate blockchains. Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin. Blockchain technology has a large potential to transform business operating models in the long term. Blockchain distributed ledger technology is more a foundational technology —with the potential to create new foundations for global economic and social systems—than a disruptive technology , which typically "attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly".

As of [update] , some observers remain skeptical. Steve Wilson, of Constellation Research, believes the technology has been hyped with unrealistic claims.

This means specific blockchain applications may be a disruptive innovation, because substantially lower-cost solutions can be instantiated, which can disrupt existing business models.

Blockchains alleviate the need for a trust service provider and are predicted to result in less capital being tied up in disputes. Blockchains have the potential to reduce systemic risk and financial fraud. They automate processes that were previously time-consuming and done manually, such as the incorporation of businesses.

As a distributed ledger, blockchain reduces the costs involved in verifying transactions, and by removing the need for trusted "third-parties" such as banks to complete transactions, the technology also lowers the cost of networking, therefore allowing several applications.

Starting with a strong focus on financial applications, blockchain technology is extending to activities including decentralized applications and collaborative organizations that eliminate a middleman. Frameworks and trials such as the one at the Sweden Land Registry aim to demonstrate the effectiveness of the blockchain at speeding land sale deals.

The Government of India is fighting land fraud with the help of a blockchain. In October , one of the first international property transactions was completed successfully using a blockchain-based smart contract.

Each of the Big Four accounting firms is testing blockchain technologies in various formats. It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, [to] smart contracts and digital currencies.

Blockchain-based smart contracts are contracts that can be partially or fully executed or enforced without human interaction. The IMF believes smart contracts based on blockchain technology could reduce moral hazards and optimize the use of contracts in general.

Some blockchain implementations could enable the coding of contracts that will execute when specified conditions are met. A blockchain smart contract would be enabled by extensible programming instructions that define and execute an agreement. Companies have supposedly been suggesting blockchain-based currency solutions in the following two countries:.

Some countries, especially Australia, are providing keynote participation in identifying the various technical issues associated with developing, governing and using blockchains:.

Don Tapscott conducted a two-year research project exploring how blockchain technology can securely move and store host "money, titles, deeds, music, art, scientific discoveries, intellectual property, and even votes".