link1278 link1279 link1280 link1281 link1282 link1283 link1284 link1285 link1286 link1287 link1288 link1289 link1290 link1291 link1292 link1293 link1294 link1295 link1296 link1297 link1298 link1299 link1300 link1301 link1302 link1303 link1304 link1305 link1306 link1307 link1308 link1309 link1310 link1311 link1312 link1313 link1314 link1315 link1316 link1317 link1318 link1319 link1320 link1321 link1322 link1323 link1324 link1325 link1326 link1327 link1328 link1329 link1330 link1331 link1332 link1333 link1334 link1335 link1336 link1337 link1338 link1339 link1340 link1341 link1342 link1343 link1344 link1345 link1346 link1347 link1348 link1349 link1350 link1351 link1352 link1353 link1354 link1355 link1356 link1357 link1358 link1359 link1360 link1361 link1362 link1363 link1364 link1365 link1366 link1367 link1368 link1369 link1370 link1371 link1372 link1373 link1374 link1375 link1376 link1377 link1378 link1379 link1380 link1381 link1382 link1383 link1384 link1385 link1386 link1387 link1388 link1389 link1390 link1391 link1392 link1393 link1394 link1395 link1396 link1397 link1398 link1399 link1400 link1401 link1402 link1403 link1404 link1405 link1406 link1407 link1408 link1409 link1410 link1411 link1412 link1413 link1414 link1415 link1416 link1417 link1418 link1419

Tag: bank transfer

How Ripple is Targeting an Entirely Different Market to Bitcoin

How Ripple is Targeting an Entirely Different Market to Bitcoin

Bitcoin was introduced in 2009 as an alternative network to the global financial system monopolized by centralized institutions and strictly regulated financial service providers. By providing a peer to peer protocol wherein users can send and receive transactions with the absence of intermediaries, Bitcoin essentially became the first decentralized financial platform.

Replicating or being inspired by Bitcoin’s structure, alternative cryptocurrencies or altcoins emerged. One of the most successful cryptocurrencies that has maintained its market cap and client base over a relatively long period of time is Ripple. It consistently has ranked in the top three altcoin, falling behind Bitcoin and Ethereum. Ripple’s vision was to provide a more efficient infrastructure for the centralized institutions and the conventional finance industry.

Ripple is significantly different to Bitcoin philosophically and structurally. If bitcoin is described as a decentralized peer to peer network developed to operate as an alternative financial network to that of the existing global financial system, Ripple can be explained as a protocol structured to serve and enhance the existing global financial system. It has partnered with leading banks and major financial institutions to settle cross-border and cross-bank transactions transparently, with strong security measures in real time.

The current global financial system operates on top of an outdated and inefficient IT infrastructure and system. For a transaction to become fully verified and settled, it could take days to weeks with a substantial fee, usually in the range of $30 to $50 per transaction. Often times, transactions initiated by banks through an international financial network such as SWIFT get lost within the system, requiring manual confirmation and a period of weeks for the transaction to be recovered and settled.

Essentially, Ripple utilizes blockchain technology and the concept of digital tokens to simplify global banking. Major banks and financial institutions are in agreement with Ripple’s vision and strategy and have adopted Ripple’s system. Most recently, CryptoCoinsNews reported that Spanish banking giant BBVA began to utilize Ripple blockchain for Spain-Mexico money transfers.

“This pioneer initiative is a clear demonstration of how payment processes can be vastly improved through the implementation of emerging technologies. These improvements will benefit our clients’ transnationality,” head of digital transformation in investment banking at BBVA stated.

However, an ambiguous component of Ripple’s services is the necessity of intermediaries. In an email, Ripple representative told CryptoCoinsNews that Ripple executives believe “bank’s aren’t going away” and that “bitcoin is getting it wrong.” Yet, by growth, bitcoin has evidently appealed to a wider range of users, businesses and investors as it is valued at $23.7 billion at the time of reporting. Ripple’s market cap is below 10 percent of bitcoin’s.

`An intermediary such as BBVA utilizing the Ripple network for a customer can be understood as an intermediary using another intermediary to process transactions. Thus, in the long run, one of the two intermediaries could be rendered ineffective. Either users will solely rely on the Ripple network and utilize XRP to make transactions with each other or banks will develop their own blockchain network similar to SWIFT and simply discard its partnership with Ripple.

The issue with banks developing their independent blockchain networks is the necessity of cooperation and collaboration. Hence, by relying on an existing blockchain network structured to serve financial institutions, banks can cut development costs.
 

Three advantages Ripple offers to its banks is speed, certainty and cost. By utilizing a decentralized blockchain in Ripple, banks can potentially see a reduction of billions of dollars in operating costs. Whether banks will remain with Ripple and work on the development of a cross-bank network or form their own blockchain network like JP Morgan is still difficult to speculate.

David Ogden
Entrepreneur

Source: CryptoCoinNews

Alan Zibluk Markethive Founding Member