Sixteen Thousand Ripples
Written by Winter Trabex.
Three months ago, when I looked into alt-coins (alternative cryptocurrencies besides bitcoin), I became convinced that darkcoin was the number two alt-coin out there. At the time, darkcoin was worth about as much as litecoin (and some days, a lot less). In the three months since I wrote that article, darkcoin’s value has increased by 300%. It is now clearly and demonstrably the number two crypto out there. There are even signs it might overtake bitcoin as number one.
As I continued to investigate, I discovered another currency called ripple. Rather than taking the traditional mining/blockchain approach, ripple has done something different. In 2013, when ripple was introduced, all the little ripples (ie, units of currency) were put into the network all at once. The developers of ripple have already done something that bitcoin is struggling to do: introduce a way for everyone in the world to buy it. This can easily be done through ripple’s own website.
Of course, the advantages that ripple puts forward- cutting clearinghouses and brokers out of the financial picture- has been nothing new to the crypto exchange market. Cryptocurrency is, by its very nature, decentralized. And, despite the developers’ attempts to create a centralized exchange network, the currency has already popped up on sites such as Cryptsy.
No matter what the initial plans for the currency might have been from the beginning, the actions of the people in the market define it- as long as there is voluntary interaction. Since nothing is compulsory about ripple, there is every indication that the marketplace of ideas will come up with different and clever ways to use it- such as people have come up with different and clever ways to use bitcoin.
The inherent problems with cryptocurrency also appear to have been anticipated with ripple, such as the double-spend attack, have already been solved.
This short video explains how ripple works:
Essentially, ripple uses a decentralized network to pass money from one person to another. There is no mining power needed to solve blocks in a blockchain, because ripple operates on a consensus basis. The nodes in the ripple network are decentralized, and can be placed anywhere in the world. This means that high processing power/lots of electricity will not be required to verify transactions. Anyone with an internet connection can use it. Thus far, there no reports of anyone scamming for ripple, or anyone undermining the process.
An interview with ripple’s chief cryptographer (the currency does use cryptographic protocol) reveals the company’s ethos:
I hope Ripple will change the world for the better. I’d like to see big companies lose their control over the flow of other people’s money just as they’ve lost control over the flow of information.
Naturally, bitcoin is already making strides in that direction. The only problem with bitcoin is that not everyone will be able to use it, just as not everyone will be able to use the dollar- both for the same reason. Bitcoin and the dollar strong currencies, with respect to the currencies of the world’s so-called third world countries. Already, ripple is worth more than the Vietnamese dong, one of the world’s worst currencies. A comparison of the two is as follows:
1 USD = 21475.43 Dong
1 USD = 106.19 XRP (ripple)
Nor is Vietnam alone in the world in have a debased, highly inflationary currency. Somalia, Turkmenistan, and Zimbabwe also have worthless monetary systems. For example, in Zimbabwe, it costs 35 million of their dollars to buy an egg.
It is not too difficult to imagine war-torn regions with little to no internet connectivity- to say nothing of consistent electricity- making the switch to alt-coins such as ripple, rather than staying with a barter system, or their own government-issued money.
Unlike fiat, and other cryptocurrencies, ripple has no more inflation to give. All the inflation that was going to happen with it has already happened. Since all the ripple in the world has already been released, it will only become ever more deflationary as various little ripples are taken out of the marketplace through a variety of means. The primary deflationary method seen in the marketplace happens when individuals- be they exchanges or companies- acquire a great deal of one currency for later use. At that moment, a deflationary effect occurs. Suddenly, there might be 100,000 less units available for use than before. Since inflation is the process of putting more money into circulation, deflation is the process of taking money out of circulation. This is one of the key activities that banks provide to the economy.
For all of these reasons, it appears that ripple is one of the more solid cryptocurrencies going forward. With all the attention given to bitcoin- and now darkcoin- adoption methods really haven’t taken hold. In the future, however, those looking for a mining-less system with more advanced protocols might turn to ripple. Already, as I’m writing this, it is the number four most exchanged currency for USD on Cryptsy.
Additionally, to show you all that this isn’t just a paid-for propaganda piece, I’ve put my money where mouth is:
What would you do if you had 16,000 bitcoin (4 million of today’s dollars)?
If you enjoyed this article, you can follow more of Winter on Liberty.me and check out Winter’s new book The Substance of Liberty: Freedom in an Unfree World. Please consider sending a BTC tip to Winter at: 1ACwZKrUPbZ5XWB3jEuTAsi8SrgeZftbxx