With digital currencies, the cat is out of the bag, and it is unlikely that the world will ever return to a 20th-century era of paper money and plastic credit cards. The future is digital money on smartphones. Gary Kremen, CrossCoin Ventures

What is Ripple Currencies How it works Pros Cons Ripple in action Questions

Payment network – Distributed – Consensus Protocol – Allows cross-currency transactions – Based on global ledger Digital currency – In network currency – Bridge

Distributed Peer-to-peer Each node has one or more roles World wide Based on trust between nodes Allows for transactions involving any type of currency – Fiat – Crypto currencies – Commodities Bridge payments to external entitites

Ripple Transaction Protocol (RTXP) Identify paths between entities Maintain ledger Maintain connectivity rippled

Ripple (XRP) Divisible up to 6 decimal places - drop 1 XRP = USD “Pre-mined” – Distributed by Ripple Labs – Build trust and goodwill – Charity Used as intermediary when exchanges between other currencies not possible

Claims to allow trading of any currency – USD, CAD, GBP, CNY, etc. – BTC, XRP and other crypto currencies Commodities – Gold, silver, etc. Other – Frequent flyer miles – Phone airtime minutes

Network snapshot – Balances – Trust limits – Transactions since last ledger Synchronized across all nodes in network Represented as a hash tree Continuous ledger close

Network must periodically agree on new ledger – Consensus based on trust others are not collduing Response to double-spending problem – Not reliant on single third party Validation – Non-colluding – Unique Node List (UNL) – Recommend 1000 nodes/5 continents – Varied interests Bad behaviors – Easily detected – Future distrust

Iterative – Start with view of all transactions – Broadcast set of likely transactions – Receive other sets from trusted nodes – Unknown transactions – those not from trusted source are voted down – Include any transaction approved by at least 50% of UNL – Repeat with broadcast, increasing threshold each time until clear consensus (80% or greater) is reached – Valid transactions voted out remain in queue for next consensus – Invalid transactions become apparent over time – Node may become untrusted

Each user has unique address Balances – Currency specific – Gateway specific

Balance owed between parties – One way – Trust limits – Trust balances Dynamic – Any two addresses – Established or removed at any time

Offer to trade – One balance type for another – Offering user sets exchange rate

Any Ripple user can assume any role Roles distinguished by connection to others – Customers – Merchants – Gateways – Market Makers

Connect to local gateway – Customer/merchant must trust gateway Typically – Single gateway – Local currency Merchant offers goods and services

Common party Holds balances of connected customers Not required to trust anyone Typically associated with local currency

Connect gateway communities Trust multiple gateways Provide paths between gateways

Limiting criminal activity – Know-Your-Customer (KYC) – Anti-Money laundering (AML) Fast transactions – Consensus reached quickly No mining – less electricity consumed Funding opportunities – CrossCoin accelerator

XRP Security System – Small security fee for each transaction – Destroyed, not banked – Prevent spamming of network XRP reserves – Account reserve – Action reserve

“Pre-mined” XRP – 100 billion produced – 55 billion to be donated – Ripple Labs retaining 25 billion Lack of anonymity Requires purchase of XRP – Free account – Required reserve of 20 XRP Open source? Who are the validators? –

Decentralized vs distributed