Crypto Academy Week 9 - Homework Post for @yohan2on

Ripple is used for moving values around the globe, Ripple Lab is a creator of Ripple Net that is inter-created the internet of values away from money to move as quickly as information does.The idea of Ripple was first conceived by Ryan Fugger in 2004 and was called Ripple pay.In 2012,it was passed to Jed Mc Caleb and Chris Larsen founder of Opencoin and was named Ripple Lab
Unlike most crypto currency who focus on individual, Ripple Lab aim is to solve banks and payment providers' problem by allowing them lower their cost transaction and expedite settlement.

RippleNet is a network based on a set of rules known as RTXP(Ripple Transaction Protocol),the network is consist of validators that are spread around the globe to maintain a shared ledgers of who owns it.Validators ensure every transaction set through the network to follow the RTXP rules.Anyone can run the validator by helping the Ripple network just like anyone can run the Bitcoin node to maintain the network of Bitcoin.

Companies who want to access the Ripple network tend to use Gateways, Gateways which are usually used by Banks act as inter point to Ripple for the people outside the Ripple network, it is same idea going to the bank or credit a company to gain their banking system.So Ripple basically offer businesses an alternative banking system in form of internet of value called Ripple Net.Ripple product like Xrapid, Xcurrent and Xvia are offer to companies in order to optimize their current solution for transferring of money anywhere around the globe.

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Ripple offers two different types of currency;IOU and XRP.
IOU are token on the Ripple network that can be stored on any Ripple wallet just like we could store varieties of Ethereum token in an Ethereum wallets,we can have varieties of co-existing token on a Ripple wallet.

Any participant on the Ripple network can issue IOU, However an IOU doesn't represent something you own rather it represents what you owe which means it is a debt.For example,if I issue an IOU to someone it means I am owing.Each IOU has name that comprises of who issued it and what it represents, For example USD.Bitstamp is an IOU issued by bitstamp promising to pay back in dollars.An IOU can be issued for any type of real world assets,E.g: you can have an IOU for euro, dollars gold,oil and so on.For each asset borrowed an IOU will be issues a new IOU.

Unlike other form of debt that can be traded, IOU used for the same type are not interchangeable if they were issue by two different people,for example,if some amount of money is borrowed by me and I was issued another IOU like (USD.Nate) that IOU cannot be added to another different IOU (USD.bitstamp),
It should be noted that IOU is not an assets but a promise by the issuers to give you the asset back in future.This asset will not be of any good if the issuer is not good for its worth.That is the reason trust is needed in IOU.

.In order to accept an IOU from an individual,Trust is needed for him to pay back.In RippleNet,this is known as trust line which can be defined as the limited amount line if credit with the bank.it is an agreement to trust someone to a certain amount of money.

Another currency the Ripple Lab support is XRP,this help to to transfer payment through Ripple network,E.g:if a bank has a large amount of money to transfer or move, instead of needing some intermediary bank to help move it,they can convert to XRP and send the XRP to the receipt bank.It is important to know that two banks do not need XRP to transfer to one another instead they can choose to keep an open tab using IOU only without closing it.

XRP is a form of payment that is final unlike the IOU and considered as a tradable network by anyone in the network,Unlike IOU, XRP is the actual asset and not a liability which means there is no counterpart at risk
In other word, when a payment is received in XRP, transaction is made and there is no fear that the other party will not meet it's obligations to payment which means no trustline is to be opened in the transaction..

Since there's no trustline to be opened,why is there need for IOU? The answer is that XRP being a crypto currency by itself is relatively volatile and it is not respected worldwide.IOU on the other hand, are treated in value as the asset each represents.XRP is fast and scalable, sending XRP to a network take 4 seconds as suppose to Bitcoin which is 10 minutes, XRP can handle 1500 per second unlike Bitcoin which handles only 7 per seconds.

When an XRP transaction is broadcast through the network,the validators that maintain the network decide if it is valid or not through voting.When a validator receives the network he consult with other validators and they vote on whether it is valid or not,if more than 80% voted valid,the transaction is updated in ripple ledger.

When. Ripple Lab started out they actually issued over 100billion XRP and according to the Ripple protocol no more XRP can ever be created.Over 20 billion XRP were given to the Ripple founder,Ripple labs own over 7 billion XRP while 40 billion XRP were sold to companies and Individuals while the remaining is sealed on a small contract that releases one billion XRP into ripple lab each month until 100billion XRP will be reached.XRP can be divided into 6 decimal points with the smallest unit known as a drop.if you want to own an XRP you will need a wallet that support the currency with a minimum deposit of 20 XRP in your account,