We love Bitcoin too! We can see it potentially evolving as a store of value for the space, i.e. a “digital gold”. We see Ripple as a perfect enabler of cross-currency transactions of all kinds using Bitcoin, in fact this was one of the motivations in its development. We are excited about the entire digital, math-based, crypto currency space in general, and we are committed to supporting ideas across the spectrum.
Several of the Ripple developers were part of the core Bitcoin development team in the early days, and when they launched Ripple they made several improvements to fix what they saw as fundamental flaws in the bitcoin protocol:
- Faster payment system – Ripple supports transaction confirmation in several seconds, whereas Bitcoin is typically 30 – 60 minutes.
- Better governance – Ripple has a strong sponsor which provides an effective balance of transparency, developer support, and leadership. In contrast, Bitcoin is run by unknown pool of mining operators (“The Mining Oligarchy”) and decision-making tends to be political due to lack of structure.
- No block chain bloat problem – At present the Bitcoin block chain is 20 GB and growing; it is not clear what will happen once we hit a 100 GB or 200 GB blockchain. The Bitcoin devs are already limiting the inclusion of transaction meta data, by limiting OP_RETURN from 80 bytes to 40 bytes, which limits the use of the bitcoin protocol for smart contracts. In contrast, Ripple uses a consensus mechanism and holds running balances, mitigating this issue. Many of the smartest devs in the space see the Ripple approach as the most elegant and scalable.
- No control by an oligarchy. One of the reasons Bitcoin does not fix its problems it that a fix requires the buy-in of miners. Miners are the firms who validate Bitcoin transactions and mine new Bitcoins. Because of economies of scale, there are less the 12 major mining pools left of which 70% of mining is done by three pools. These pools will not update the bitcoin protocol in ways that hurt their investment in mining equipment.
- Use of energy for mining. Bitcoin mining has horrible environmental issues around it’s use of electric power needed to mine.
In the future, if Ripple Labs were to disappear entirely, the Ripple protocol would continue to exist and to be available as a platform for community initiatives.
There are are a range of available resources:
Ripple Labs created the Ripple Protocol (“aka Ripple”) and remains focused upon enabling and helping inspire cutting edge developers and financial institutions to build upon the Ripple Protocol to create exciting and beneficial applications and financial tools. Ripple Labs continues to contribute to the development of the protocol’s coding including: SDKs, APIs and free consumer applications.
The Ripple Protocol by comparison, is an open-source software system that makes the fast and efficient exchange of “currencies of value” possible between parties. The Ripple Protocol is the distributed payments protocol that enables the virtually instantaneous exchange between any kind of currencies of agreed upon value (fiat currencies, loyalty points, gold). Similar to how the Internet allows the instantaneous movement of information, the Ripple Protocol and network allows for a similar ease of exchange between agreed upon currencies of value.
Ripple plays a critical link in supporting the growth of cryptocurrencies because it can serve as a bridge for transferring value from any digital currency, e.g. Bitcoin, Litecoin, PeerCoin, to any fiat currency, e.g. Dollars, Yen, Pesos, to any corporate loyalty point, e.g. mobile phone points, Starbucks points, frequent flyer points. This bridging function will be absolutely critical for the entire cryptocurrency space over the next 3-5 years, as cryptocurrencies are still relatively niche, and there needs to be a way to move funds quickly from one system and into the other.
Significant opportunities exist for developers in this space. Ripple is an open protocol with a strong developer community and excellent developer resources, enabling a virtually limitless range of development possibilities.
If you’re interested in starting a gateway, we recommend having a developer review the code for gateway servers: https://github.com/ripple/ripple-gateway
Just remember that you will be responsible for managing compliance issues in each jurisdiction and establishing a relationship with a bank (or other licensed entity) willing to accept fiat deposits from your customers (i.e get a partner with licensing in the each end of the payment corridor you are thinking about).