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The use of cryptos in the financial system has been growing. The world is adopting digital currencies as an alternative to traditional currencies. This follows the effects of the coronavirus pandemic and other political uncertainties.

While the cryptocurrency market grows, it still has several concerns to solve. One of such problems is the possibility of double-spending. Malicious traders are likely to use a single link to make payments twice. Most cryptos thus have blockchain systems to verify prices before confirmation.

Unlike other digital currencies, Ripple does not have a blockchain. This seems strange as most of the coins use the system for transaction verification.

Still, like all the other cryptos, it risks double-spend and other security concerns. That is why it employs a unique technology; the Ripple Protocol algorithm.

By consensus, the system relies on the agreement among nodes when validating transactions. It employs a group of nodes that either confirm or reject a transaction. The popular choice then takes the day. All the nodes operate on the premises of the utmost good faith. 

Ripple Protocol Components 

The Ripple network comes with several components. You need to understand the details to get the confirmation process better. They include;

1.    Server.
Any entity that runs the Ripple server software participating in the consensus process. 

2.    Ledger
The record of the currency in every user account in the network. The ledger updates every time a transaction passes through the consensus process. 

3.    Last closed ledger 
The latest ratified ledger having passed the consensus process. It represents the current network state. 

4.    Open ledger 
The status of every transaction when undergoing the consensus process. It becomes the last closed ledger once the nodes confirm it. 

5.    Unique node list 
This is the set of trusted nodes that verify transactions. Every server has its set of impressive node lists for determining consensus. The system relies on the unique node list for consensus to confirm the transactions.

6.    Proposer 
While any server broadcasts transactions for validation, only the ones with UNL matter. They are the ones with the legit proposal powers. 

Ripple Protocol Algorithm Properties 

The Ripple protocol algorithm ledger uses a consensus protocol. This is different from the other virtual currencies that came before. The protocol has some unique properties that make it stand out.

One of the top properties is that everyone using the Ripple ledger can agree on its latest state. They also agree on the sequences in the transaction occurrence. The protocol is also decentralized. It processes all the valid transactions without needing a central operator. It also has no single point of failure.

The protocol is also not dependent on any single node. It can still verify transactions even when a participant leaves, joins or misbehaves. Independence comes from the fact that it uses only trusted nodes. Every node makes an independent decision without influence from the others. Other than continuity, freedom also helps in rejecting corrupted or malicious transactions.

The Ripple protocol algorithm is all about doing the right thing. It stays true to the 80% validation threshold. It fails to make progress when too many participants are unreachable or misbehave. This is better than moving forward for the sake of transaction speeds.

The nodes in the transaction don't compete for resources, unlike other blockchain systems. They instead cooperate hence work faster.

How does Ripple Protocol Algorithm work?

The leading role of the Ripple protocol algorithm is to ensure a group of nodes make the right decision. This is even when their credibility is questionable.

The Ripple protocol algorithm ensures the system works for all transactions. It can also reject the transaction for another round of considerations. Whatever the case, the system must have the same conclusion.

To verify a transaction, the system chooses a team of trusted nodes. They form the unique node list. Becoming part of the list doesn't mean the node is loyal. Instead, it's all about the possibility of trust.

The nodes on the impressive list work together to validate the transactions. They choose a bunch of trades to work on at a given time. They then reach a decision when more than 80% of them come up with the same conclusion. This is because the system only has a Byzantine fault tolerance of 20%.

Once the transaction gains the needed support, it moves to the validation process. It becomes irrevocable at this point as the system proceeds to confirm the transaction.

While the process might seem long and tedious, it is quite a quick one. The whole process takes around 4 seconds. This is quicker than the popular proof-of-stake validation methods. Most of the altcoins, like Ethereum and Tether, use the latter.

The validation system is way quicker than Bitcoin's proof-of-work consensus.

Ripple Protocol Algorithm Operating Premises

• Correctness

The system must show that no fraudulent transaction confirms during consensus. The system maintains correctness as long as the faulty nodes are less than the tolerance. 

The system also takes into account the possibility of Byzantine failures. For that, the Ripple protocol algorithm allows a small margin of error on tolerance.

The nature of the nodes also doesn't matter when it comes to confirming transactions. They all apply deterministic rules during the consensus process. 

• Agreement 

All nonfaulty nodes must reach a consensus on the same set of transactions for an agreement. The different nature of the nodes means they can reach correctness independently. The system thus provides for a bound for the nodes to reach the 80% agreement. Only then is when the confirmation is valid. 

The faulty nodes agreement in the system doesn't matter in the consensus process.

• Utility 

The protocol algorithm requires a consensus reached in finite time. For that, it removes the high latency nodes from the UNLs. It also provides for a default UNL to cut the protocol consensus. 

The network also employs a split function to avoid a fork in the network. All these functionalities must click to confirm a transaction.

Bottom Line

Transaction validation is such a big deal in the crypto markets. The only way to gain users' trust is by ensuring secure and fast transactions. The Ripple protocol algorithm works better than most of the other digital currencies.

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