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Introduction to XRP and XRP Ledger
Yana Novikova, Director of Product Management
Hot Chips, 2018
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About Me
Yana Novikova
Director of Product Management at Ripple
4 years with Ripple in various roles, including product manager for XRP Ledger, and xRapid, RippleNet's liquidity solution that uses the digital asset, XRP.
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O U R V I S I O N
The Internet of Value: Enable the world to move money like information moves today.
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O U R M I S S I O N
Remove friction from global payments.
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RippleNet Is Modern Global Payments Infrastructure
xCurrentProcess real-time
payments
xViaSend global payments
xRapidSource on-demand
liquidity
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Standardized connectivity
Send Payments
xVia
Senders BeneficiariesRippleNet
● Rich data attachments● End-to-end visibility
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Real-time, trackable global payments with no failures
Process Payments
xCurrent
● Rulebook for RippleNet adoption
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Source Liquidity
xRapid
Lower Liquidity Costs
Exchange Exchange
XRP Ledger
● On-demand liquidity sourcing● Reduce nostro accounts
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Head to Head: XRP Is the Best Digital Asset for Settlement
● 45 mins to settle
● Fees: $0.85/transaction
● 32 transactions per second
● 4 seconds to settle
● Fees: $0.0010/transaction
● 1500 transactions per second
BTC XRP
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270Team members
Our Experience FINANCIAL SERVICES
J.P. Morgan
Citi
Merrill Lynch
BlackRock
Visa
Fiserv
Paypal
Prosper
TECHNOLOGY
Apple
Yahoo
Bloomberg
NASA
REGULATION
Federal Reserve
SEC
DTCC
NSA
San Francisco | NYC | London | Sydney | Mumbai
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XRP Ledger
A decentralized cryptographic ledger for issuing, holding, transferring, and trading arbitrary assets, including its native currency - XRP - a digital asset designed to bridge the many different currencies in use worldwide
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Some History
• Original idea proposed in 2004 by Ryan Fugger as “Ripplepay” - a decentralized P2P credit
system
• Development started in 2011 by David Schwartz, Arthur Britto, Chris Larsen and Jed
McCaleb
• 100 Billion XRP created at inception
• Distributed agreement (consensus) protocol instead of proof-of-work (mining)
• Replaces blocks with ledgers
• Allows arbitrary assets (IOUs)
• OpenCoin (private US company) founded in 2012 with 80 Billion XRP grant from creators
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Ledgers
• Replace UTXO set found in Bitcoin
• Form a secure hash chain
• Contains all current state information
• Advanced through transaction sets
• Can be forgotten (no prior ledger history needs to be stored)
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Ledger
• Contain persistent state
• Contain transactions
• Contain metadata
• Contain sufficient information to derive itself from its predecessor
• Support more complex transactions
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Ledgers: Advantages
• Reliable agreement on network state
• Control over the growth of state
• Faster spin up of new nodes
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Consensus
• Distributed agreement (consensus) protocol similar to Practical Byzantine Fault Tolerance
(PBFT)
• Does not require 100% agreement on the participants
• Does require substantial agreement on the participant
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Consensus: Key Points
• XRP Ledger’s method of solving the double spend problem
• Validators agree on a group of transactions to be applied in a given ledger
• Validators sign each ledger they build
• Analogous to a room full of people trying to agree
• All honest servers place a high value on agreement, second only to correctness
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Consensus: Why Is Transaction Ordering Important?
• Transaction validity is deterministic
• Transaction execution is deterministic
• Transactions either conflict or they do not
• If they do, all honest participants will agree that the second one must fail
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Consensus: What Do Validators Do?
• Agree on the last closed ledger
• Propose sets of transactions to include in the next ledger
• Avalanche to consensus
• Apply agreed transactions according to deterministic rules
• Publish a signed validation of the new last closed ledger
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Consensus: Why Is It Robust?
• If a transaction has no reason not to be included, all honest validators will vote to include it
• If a transaction has some reason not to be included, it is okay if it is not included
• Valid transactions that do not get into the consensus set will be voted into the next set by all
honest validators
• Algorithm is biased to exclude transactions to reduce overlap required
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Consensus: Advantages
• No rotating dictators
• No forced stakeholders
• Users choose who to trust
• Fast (3-5 second confirmation rounds)
• Past cannot be rewritten
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XRP Ledger: Key Features
• Open source, ISC license
• Public ledger, public transactions, public history, permissionless
• Equal access, peer-to-peer, no central authority
• Fast transactions with reliable confirmation
• Sophisticated cross-currency and cross-issuer payments
• Elliptic-curve cryptography - SECPK256K1 & ED25519 with native multi-signature support
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XRP Ledger: Format
# Ledger number
Account settings, tristlines, balances, etc.
Transaction
Timestamp
Validated
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XRP Ledger: Arbitrary Assets
• Assets other than XRP are identified by issuer and currency
• You must choose to hold an asset
• Assets other than XRP have counterparties
• Supports assets that reflect actual legal obligations
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Issuance: Digitizing Money
Alice Bob
$100
Physical World
Digital World
Alice Bob
$100
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Issuance: Digitizing Money
Alice Bob
$100
Physical World
Digital World
Alice Bob
$100
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XRP Ledger: Arbitrary Assets
• Money does not really move
• Payments swap ownership of assets
• Sender loses custody of the asset they sent
• Recipient gains custody of the asset they wanted
• Payments “ripple through” intermediaries
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Ledger is Validated When Supermajority of Peers Calculate the Same Result