Ripple pitches its open source system as a free PayPal alternative to moving money across the globe over the Internet.
Free money usually attracts attention. And that's the intention of Ripple, which offers its open source-based system as a free PayPal alternative to moving money across the globe via the Internet.
Ripple's protocol offers a way to make online payments around the world that, unlike PayPal's, is free of fees and restrictions on currencies in particular countries. It's also offering free money. That is, Ripple is offering its XRP currency at no charge in order to get the tender into circulation after its beta launch in spring 2013.
Bitcoin's digital currency is limited to 21 million coins; Ripple has set a cap of 100 billion coins on its digital currency. Unlike Bitcoins, though, Ripple's currency is not released through computer mining. Instead, it's held by OpenCoin, which intends to retain 20% of the coinage. That is the profit motive for the company, which pays for the development, coding and marketing of Ripple's digital payment system.
Ripple claims to do for money what the Internet did for information. It expects its currency to break through the barriers to movement and access. Ripple's site opens with a video to illustrate what it means by "the future of money." A longer video delves into more of the technical details.
Ripple is intended to be open source software that "is not owned or controlled by any person or organization," even though it's backed by OpenCoin. Ripple is a "public goo," and the Ripple protocol and Open Coin have a similar relationship to Red Hat and Linux, said Patrick Griffin, head of business development for OpenCoin, in an interview.
Bitcoin paved the way for the distributed systems Ripple uses, Griffin told me, but there are still gaps Ripple intends to fill. The question is what does Ripple do that Bitcoin can't? It's designed to facilitate the transfer of money from any form of currency and to clear transactions in five seconds, as opposed to the 10 minutes minimum required for Bitcoin transactions to clear through the block chain, he said.
Top IT Trends to Watch in Financial ServicesIT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
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