What is Ripple? Well, it is both a digital currency and a payments protocol.
Ripple is a general purpose ledger and payment network based on the key insight that when you try to pay somebody, it’s only going to work if they end up with an asset that was issued by an issuer they trust.
The core of Bitcoin is all about building a trust-free decentralized transaction ledger for tracking the ownership and transfer of scarce tokens – Bitcoins. And the whole point of Bitcoins is that they are counterparty-risk-free assets: my Bitcoin is not somebody else’s liability.
By contrast, Ripple is all about dealing with assets that are somebody else’s liability. So the focus in Ripple is on representing liabilities issued by identifiable issuers and enabling them to be transferred between individuals on a network.
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