Everything You Need to Know About Interledger Protocol and Ripple
The Interledger Protocol is a protocol developed to make payments across payment networks. When it comes to payment protocols, Ripple is the system that truly stands out. One of the reasons why Ripple stands out as a dynamic payment protocol across networks will be the use of the Interledger Protocol.
For the past couple of years, Ripple has been changing the game across banks. In essence, Ripple offers banks the ability to transact directly and instantly with certainty. This company strives to meet the main goals established by their bank partners.
For starters, the introduction of faster payment systems has made faster payments. The existence of faster payments paved the way for a massive increase in transaction volumes. Making efficient global payments, Ripple strives to meet the expectation of their business partners to provide a remarkable scalability level.
In addition, financial institutions wish to get the maximum level of privacy for every transaction that they make from a payment protocol system. This feature is vital to protect all customers of the banks. Even if data on individual transactions and customer information are not present in the public ledger of Ripple, banks still do not prefer to have aggregate transaction information recorded on the ledger.
For the past couple of years, Ripple has been working to address these two primary issues. That is why the company has decided to make use of the Interledger Protocol.
Because of the contribution of the Interledger Protocol to Ripple, banks can leverage complete transaction privacy and infinite scalability. These strengths are in addition to the distributed financial technology from Ripple and the benefits that it brings.
These days, banks deploy the solutions offered by Ripple when it comes to FX market making and cross-currency settlement. If these solutions incorporate the Interledger Protocol, banks will not worry about changing a lot. Using this protocol, market makers will be able to retain the accounts they have in their banks. They can continue making relationships with other market makers and banks whom they make transactions. The Interledger Protocol relies on a specialized two-phase commit protocol along with cryptogenic escrow. The implication of this is that people can make transactions in good numbers across exchanges and ledgers.
The Interledger Protocol also can boost the impact and reach of the Ripple Consensus Ledger. This ledger is the root ledger for digital currency. Lots of buzzes are going around when it comes to digital currencies. The internet of value goes up with the role that these currencies play. Over the years, Ripple strives to make the digital currency XRP the best asset for market makers in terms of bridging. This function offers better cross-currency liquidity.
There are still many benefits that the Interledger Protocol offers. They are still beginning to realize their potential.