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Imagine Kevin, a Wells Fargo customer living in New York, needs to send money to his family in Thailand. In order to transfer funds to their local Siam Commercial Bank, he would need to go to his Wells Fargo branch with their account number and provide the unique SWIFT code for their local SCB branch. Wells Fargo would then initiate a payment transfer to SCB which would clear after 3-5 days, finally crediting the funds to his family’s account.
For the past 40 years, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) has dominated the market for these types of cross-border transactions by developing an expansive messaging network between banks to securely send and receive money transfer instructions. The whole process, however, in today’s global economy, is in need of a new and improved solution that is just around the corner.
The Ripple Consensus Ledger is an open source, account-based chain, which requires no mining to be performed to validate transactions. Ripple Labs, a venture-backed startup, created the third-generation chain with the goal of enabling frictionless global fund transfers. Ripple’s native asset XRP acts as a standard measure of value, which banks can exchange to increase transfer speed and decrease costs.
When compared to digital currencies like Bitcoin (7 transactions per second) and Ethereum (15 transactions per second), it becomes obvious that Ripple (1500 transactions per second) is much faster. Banks can save 30% on transfer costs by using the Ripple transfer platform. Additionally, banks have the option to use the Ripple software in tandem with the XRP token which would decrease transfer costs by 60%.
Due to Ripple’s primary focus of assisting financial institutions, some cryptocurrency enthusiasts are unsure if they can morally support the project (since it’s a bit contradictory to the whole “decentralized” premise of cryptocurrencies). Regardless, the Ripple Labs team seems to be consistently inking partnerships and improving the platform – two factors which bode well for future use of the currency and blockchain.
How can you buy Ripple?
You first need to buy Bitcoin or Ethereum on Coinbase and then transfer it over to your account at Binance to exchange it for XRP. If you get stuck or need help, send us a message through our Facebook page or email and someone on staff will walk you through the process.