Ripple has been a tear this year. Every week we hear about new partnerships and institutions adopting, or testing, their technology. Today is no different, as five new financial institutions have joined RippleNet and will use xCurrent or xVia to strengthen emerging markets access into India, Brazil and China. We will talk later about these new partnerships. Right now, lets discuss new developments!
New institutions have been adopting the technology, but news on development has been silent, or at least subtle until now!
The startup that oversees development of the world's third most-valuable cryptocurrency, XRP, is moving to upgrade the underlying technology on which it operates.
Announced Wednesday, San Francisco-based startup Ripple is releasing two new white papers for peer review - one describing XRP's consensus algorithm in a more formal way and the other outlining a way to improve the diversity of connections of each node, the software users run to relay and verify transactions on the network.
The first is a review of the XRP Ledger Consensus Protocol, which refines our previous algorithm analysis, and formally proves that the algorithm ensures safety (no forks) and liveness (does not stall) in the currently planned phases of decentralization.
The second paper introduces Cobalt, a novel, asynchronous consensus algorithm that will improve the existing XRP Ledger Consensus Protocol by allowing for the flexibility to create more diverse UNLs.
Maintaining our momentum towards further decentralization is critical for XRP Ledger to reach its full potential. We’re proud of how far we’ve come, being the only public blockchain that has experienced no reversed transactions, no censorship and no major operational issues for over five years. We look for that track record to continue as the XRP community takes on more and more responsibilities.
The two releases have one central theme: security.
"What we're trying to do here is add some defenses against some unlikely attack scenarios. Basically, it says you can't completely manipulate the entire network," explained Stefan Thomas, CTO.
The key word here is "unlikely." Thomas argues these attack vectors aren't viable unless the attacker was a state actor, say the U.S. government, with enough money and technological resources to disrupt the network. And though he isn't particularly worried about this happening, Thomas said the startup is trying to protect against those use cases anyway.
"We're extremely cautious. We want the best security," he added.
The first paper, called "Analysis of the XRP Ledger Consensus Protocol" builds on the company's 2014 paper, providing a formal, mathematical proof that what's supposed to happen on the network will really happen. It boils down to two things: "safety," that the network won't fork into two competing networks, and "liveness," that the network won't get stuck and will keep processing transactions.
The second paper, "Cobalt: BFT Governance in Open Networks" seeks to improve on previous XRP plans with an algorithm that supports a richer array of validators.
You can think of XRP as kind of like a voting system, where each node storing Ripple's transaction history gets a vote on what happens next. To help it accomplish this, each node in Ripple carries something called a Unique Node List (UNL), a list of nodes on the Ripple network that the node considers legitimate.
So, if each node is connecting to a better variety of nodes, the argument goes, that's good for the long-term resiliency and decentralization of the network.
Both papers draw heavily on distributed systems, a body of computer science research describing how large connected networks function. And because they're more theoretical, Thomas stressed these papers will likely have a longer-term impact.
"It's not going to affect how users use XRP right now. They won't experience any downtime or anything," he said.
5 New Partnerships
On Twitter Ripple announced that 5 more institutes are adopting their technology.
Who are these institutes?
Itaú Unibanco, Brazil’s largest private sector bank and Latin America’s biggest bank by market capitalization; IndusInd, a leading private sector bank in India; and InstaReM, a major remittance provider based in Singapore, will use xCurrent to provide faster, more transparent cross-border payments to other financial institutions around the world.
Two fast growing global remittance providers, Beetech in Brazil and Zip Remit in Canada, will both use xVia to open payment corridors for their customers around the world. Additionally, both will look to establish a connection for their customers into China, an opportunity that is now possible thanks to the recent addition of LianLian International to RippleNet earlier this month.
What is the Impact?
With over 500,000 transactions per year from Australia, Canada, Hong Kong, Singapore and India, InstaRem will use RippleNet to connect their customers to over 60 countries worldwide.
Prajit Nanu, co-founder and CEO of InstaReM, is excited to see the company join RippleNet and to serve as an additional bridge into broader South East Asia for other RippleNet members.
“We are pleased to partner with Ripple,” said Nanu. “Now, RippleNet members will be able to process a large number of payouts in Southeast Asian countries through InstaReM’s secure rails.”
InstaRem is able to send funds to over 3 billion people around the world and has a growing customer base of over 40,000 businesses and individuals who rely on their services. By joining RippleNet, InstaRem will be able to provide a faster, cheaper and more transparent payments experience to every one of their customers.
For financial institutions that want to provide a better payments service into and out of emerging markets, adopting Ripple’s leading blockchain solution for cross-border payments is the obvious answer.
RippleNet’s end-to-end communication and ability to settle transactions instantly means that members can save their customers both time and money, something incredibly important in developing countries where financial flexibility is often limited.
Patrick Griffin, Ripple’s head of business development, believes that providing faster cross-border transactions at a lower cost is especially crucial for customers in emerging markets.
“The payments problem is a global problem, but its negative impact dis-proportionally affects emerging markets,” said Griffin.
“Whether it’s a teacher in the U.S. sending money home to his family in Brazil, or a small business owner in India trying to move money to open up a second store in another country, it’s imperative that we connect the world’s financial institutions into a payments system that works for their customers, not against them.”
RippleNet’s continued expansion ultimately makes cross-border payments easier and less expensive, bringing the world closer to an Internet of Value, where money can move as fast as information.