Ripple is a real time gross settlement system, currency exchange and remittance network by Ripple. It was firstlydeveloped by Ryan Fugger in 2004. He is inspired by a local exchange trading system and then he decided to create a financial system which is decentralized and could effectively allow individuals and communities to transfer theirmoney. After that, blockchain technology appeared and then Ripple is developed based on blochchain and had ahigh dependency of Bitcoin, which is considered inefficiently and costly now. In May 2011, Arthur Britto and DavidSchwartz decided to use a new consensus mechanism. Transactions were no more verified by miners during the miningprocess, instead network members verify the transaction during each rounds. This improvement had made a significantadvancement. It remarkably reduced the time which a single user should wait until his transaction is confirmed andalmost cost no charges. In September 2012, they founded OpenCoin Inc. which is called Ripple Labs now and createdthe native cryptocurrency for Ripple which is called XRP. Nowadays Ripple uses its own blockchain to record ledgerand use XRP to maintain the security of its protocol. XRP has another important role, it acts as the bridge currencyof Ripple and supports for any type of currency to exchange. XRP is not responsible for the incentive of participants.The incentive scheme of Ripple can be explained as following: Suppose there are two big international companies Aand B, they are located in different lands and use different currencies. They cooperate with each other through atrusted third party (an international escorw). However, they both are worried about this trusted third party, whomay collude with A or B, so the transaction records between A and B are no more reliable. Under this circumstance,Ripple can help them to maintain a public ledger so that both A and B can make an agreement without trusted thirdparty. Then the payment network will be more reliable and stable. Another benefit is the transfer charges is relativelow than using a trusted third party.2014 is the golden year for Ripple’s development 6. At this year, Ripple focused at banking area and the first bank touse Ripple was Fidor bank in Munich in 2014. In the same year’s September, the New Jersey-based Cross River Bankand Kansas-based CBW Bank announced that they would accept Ripple protocol and start for using it. By DecemberRipple Labs began working with global payments service Earthport, they tried to combine Ripple’s software withEarthport’s payment services system. At the end of year 2014, Ripple surpass Litecoin and became the second biggestcryptocurrency. On June 13, 2016, Ripple obtained a virtual currency license from the New York State Department ofFinancial Services, making it the fourth company with a BitLicense 6. Currently Ripple has developed applicationfor both ios and andriod users. Also it has user-side application for Windows, Unix and Mac OS users. However, theserver-side application does not support Windows operating system.


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