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Author Topic: Recap of why Ripple is important and going to be truly big one day.  (Read 41 times)
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December 07, 2017, 03:27:09 PM

"A medieval banking system

Hawala is best described as money transmission without money movement, providing the appearance of instant remittance between separate locations; for example, sending money between different cities or countries.

In the basic case, say Alex wants to send money to Beth:

Alex goes to his local hawala agent and gives him some cash and a password, which he and Beth share.
The agent telephones Beth's local agent and tells him to release funds to someone who can provide the password.
Beth walks in to her agent, says the password, and receives cash. Commissions can be taken from either or both agents.

Note that money has been transmitted from Alex to Beth, but the physical notes have not moved. We are left in a situation where Alex's agent owes Beth's agent money.

They can either settle the debt later, or hope that there may be reverse transactions if other clients want to move money in the opposite direction.

Also note that trust is involved. In this scenario, there are three trust relationships:

Alex has to trust that his agent will do the right thing, as he is handing over cash.
Beth has to trust that her agent will do the right thing, as she is expecting to receive cash.
The agents need to trust each other over the repayment of the debt (IOUs).
Moving to Ripple

Now we can have websites or shops that perform the function of agents, and instead of agents phoning each other, we can communicate the IOUs electronically.

This is how Ripple works: Alex logs on to his preferred Ripple gateway, deposits money to it, and instructs them to release funds to Beth via her gateway. Beth collects her funds."

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December 07, 2017, 03:35:53 PM

lmao, ripple shills out today, watch out as they are desperate to stay relevant.
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