From Ripple, RippleNet, RippleLabs, xCurrent and Total Confusion

The following article is an excerpt from a scientific treatise by our guest author and takes a close look at the Ripple ecosystem.

Ripple is still one of the most valuable crypto currencies in the Bitcoin evolution

Now that the hype surrounding this digital currency has subsided somewhat and the Bitcoin evolution price downturn at the beginning of 2018 has grounded the one-way street thinking of some private investors, it is worth taking a closer look behind the scenes of this currency – especially now that the first investors in the US have filed a lawsuit against Ripple Labs. Read about it here: https://www.onlinebetrug.net/en/bitcoin-evolution/

The crypto currency, abbreviated XRP, has been public since 2012. Due to the price explosions in 2017, Forbes Magazine suddenly ranked Ripple founder Chris Larsen among the 400 richest people in the world. On paper he had assets of 58.4 billion US dollars at the end of 2017. That made him richer than Larry Ellison, the founder of Oracle, and richer than Google founders Larry Page and Sergey Brin.

Already in 2005, Ryan Fugger had put ripplepay.com online. Fugger had the idea of creating a decentralized money system that would allow people to transfer money between themselves over the Internet.

But unlike Bitcoin or Ethereum, Ripple is different: it is primarily commercial

Together with Chris Larsen and Jed McCaleb, who developed the file sharing service eDonkey and later supplied the code for Mt.Gox, they developed the digital currency Ripple based on blockchain technology. As early as 2011, they realized that Bitcoin was slow and consuming a lot of energy. Ripple’s design goal was primarily speed.

In 2012, there were disputes within the Ripple community, and McCaleb, Larsen and Fugger founded OpenCoin Inc.

OpenCoin developed a new process for payment processing from 2012. Based on Ryan Fugger’s concept, it was called the Ripple Transaction Protocol (RTXP). Its function was to transfer money between two parties.

What is XRP actually used for?
While international money transfers between banks took high fees and days, RTXP was supposed to allow transfers in seconds. At the same time, any currency (USD, Euro, Renminbis, Gold and even airline miles) should be exchangeable via RTXP. OpenCoin also developed its own digital currency called Ripple, which is now known as XRP.

OpenCoin sought investors and found them in Andreessen Horowitz and Google Ventures. In September 2013, OpenCoin Inc. was renamed Ripple Labs. The technology behind it has been made available to everyone as open source by posting the source code and documentation on the Internet. McCaleb left the company in 2013 and founded a new one. Since 2014, Ripple Labs has succeeded in attracting more and more banks as potential customers to make international payments using Ripple Labs technology.

Most of these customers are experimenting with this technology in 2018. But especially in Asia, banks are already using Ripple Labs technology. In Japan, 61 banks have joined the Ripple Labs network. And it is precisely here that a distinction must be made between the crypto currency Ripple (XRP) and the company Ripple Labs:

Most people associate the hype about the currency with the success of the company, although you have to look at both separately. Obviously the enterprise Ripple Labs gives itself little trouble to emphasize this separation in a fog from marketing, Hype and little publicly accessible documentation.

SegWit2x and the debate over a renewed Bitcoin Hard Fork

SegWit2x will come in November. But what does this mean for the further development of the Bitcoin community? Will the New York Agreement hold or will there be another Hard Fork? BTC-ECHO will illuminate the political situation behind the 2x activation for you.

Crypto currencies, especially the Bitcoin, are currently experiencing a surge of recognition all over the world like never before. At the same time, this is also provoking critics from all sides who have repeatedly described the Bitcoin over the last few weeks as either a hoax or a bubble threatening to burst sooner or later. As to the Trotze the Bitcoin exceeded yesterday for the first time the marks of 5.000 US Dollar and lies in the meantime clearly over it, tendency rising. And the scaling debate, which has been smouldering for years, is hovering over all this.

In the midst of the current peak phase of the crypto currency, the solution to the Bitcoin scaling problem agreed upon in New York City in May now seems to soon become reality.

But what would that mean for the Bitcoin evolution?

Let’s first take a look back: Since the first days of Bitcoin, the scaling of the Bitcoin has been discussed. The reason for this is the Bitcoin evolution algorithm, which on the one hand limits the block size to 1MB, but on the other hand also ensures that a new block is added every 10 minutes. Since a transaction is about 250 bytes in size on average, there is a limit of about 7 transactions that the Bitcoin block chain can process per second – too little for the demands of the increased number of users.

In the course of this year, the scaling discussion has finally escalated into a real dispute. Part of the community supported the SegWit software update, which, among other improvements, can primarily relieve the blockchain by activating the Lightning Network. Instead, opponents of the innovation advocated a simple enlargement of the individual blocks to 2, 4 or even 8 MB in order to be able to process transactions faster.

The dispute reached its temporary climax in May, when the various interest groups were brought together to find a compromise in the general interest with the New York Agreement: SegWit2x. The solution found was in principle a combination of SegWit and an increase in block size, with the intention of first activating SegWit in the middle of the year and then increasing the block size to 2 MB towards the end of the year, 144*90 blocks later to be precise. (A more detailed technical analysis can be found here.

Hard Fork: Bitcoin evolution! Bitcoin Gold?

As we know today, this compromise has not been accepted by the entire Bitcoin evolution network, which is why a hard fork occurred on August 1st in the run-up to the SegWit activation, resulting in a spin-off of the new crypto currency Bitcoin Cash. A major reason for the separation was the rejection of SegWit by part of the community, which instead wanted to significantly increase the block size and targeted 8 MB instead of 2 MB.

While Bitcoin Cash has now stabilised at a certain level as its own new crypto currency, SegWit was also successfully activated on the Bitcoin blockchain at the end of August. But now the story could repeat itself. As agreed in New York, the 2x part of SegWit2x is on the agenda in November, a compromise originally designed to prevent the first hard fork in the Bitcoin network. Instead, another Bitcoin hard fork could be the result.

For example, the spin-off of Bitcoin Gold from part of the Bitcoin network has been announced for October 25, which seems to have already taken on relatively concrete forms. Bitcoin Holders, for example, are to be rewarded proportionately with Bitcoin Gold, as was the case with the first Hard Fork. You can find out exactly what Bitcoin Gold is all about in our video.

2x or NO2x?
However, the Bitcoin Gold initiators are only a group of those who reject the 2x part of SegWit. In fact, a large part of the community is critical of this new step. Nevertheless, there are good arguments in favor of a 2x extension.

For the supporters of 2x, increasing the block size is a decisive argument. Many of them see the Bitcoin primarily as a means of payment and thus weight the exchange function of money over its other functions. In order to fulfil this function sufficiently, faster and cheaper transactions are needed than is currently the case. According to this group, an improvement in the transaction conditions would benefit the entire network, as the Bitcoin adaptation would then continue to rise and the Bitcoi

Hashgraph – Gossip in the data tree

If you think of the blockchain as a chain and the tangle as a knotted net, the hashgraph is a tree. Just like the tangle, Hashgraph wants to solve the problem of scalability. In contrast to IOTA, however, Hashgraph has “only” to do with a data structure without an associated crypto currency. Hashgraph is currently only a technical framework and designed to create infrastructures for companies and the like.

Gossip over Gossip

In the Gossip-over-Gossip method, the individual nodes communicate what the other nodes have “said”. If you like, each gossip node spreads the information to other gossip nodes. All participants regularly synchronize their information with randomly selected other participants to ensure that it is up to date.

In order to validate information, Hashgraph works with polls. The gossip principle ensures that the validated information is passed on to all nodes and thus remains up-to-date at all times. The nodes coordinate with each other and thus validate the information. Thus it is a chain of points that links the individual nodes – the information about who has communicated with whom is stored in the hash – all hashs together form the hash graph. Hashgraph is, figuratively speaking, a constantly growing tree whose fruits spread gossip among themselves.

From a technical point of view, this has the advantage that only a minimum of bandwidth is needed to spread the gossip further. Each time the gossip is spread, the participants only add a minimum amount of information without distorting it.

Summary

Both IOTA’s Tangle and Hashgraph promise high scalability and thus fast, secure and energy-efficient transactions. In contrast to the Bitcoin blockchain, however, there are no miners, transactions are validated at Tangle with new transactions that are (currently) ordered by a coordinator. Hashgraph, on the other hand, uses the Gossip-over-Gossip method, in which they pass on information about hashs and validate it in the voting process.

The network now offers a distributed consensus system (Distributed Consensus Algorithm). As with the Tangle, this allows several parallel computing processes, Hashgraph promises above all to be more efficient and faster.

As consensus procedure Hashgraph uses the Gossip-over-Gossip principle (gossip about gossip). In this way, the developers hope to circumvent the problem of the so-called Byzantine error. In short, the aim is to prevent the (exponential) spread of misinformation in a decentralized system.

Of course, there are other approaches in distributed ledger technology and new ones are constantly being added. In the case of crypto currencies, our New Coins on the Block series therefore repeatedly presents new, distributed data structures.