Ripple XRP and Stellar XLM are currency exchange and remittance networks. By using a common ledger that is managed by an independent network of validation servers that constantly check transaction records, these exchanges don’t rely on the heavy computer processing power and energy that systems like Bitcoin do. Ripple XRP uses a using a HashTree system, whereas Stellar XLM works on the blockchain system. As such, they have the potential to significantly improve a number of services:
1. Insurance
Insurance companies spend huge amounts of time verifying claims, going through many stages of bureaucracy which wastes time, effort and man-hours. By using open source time-stamping services, such as Vrumi, claims can be analysed in real time, saving insurance companies huge amounts of resources.
2. Credit
Ripple XRP and Stellar XLM allow for the instant exchange of funds, so will revolutionise the credit industry. Platforms such as Wetrust use this to allow friends and families to pool money, either in a private or bank-controlled account. Equally, there are a number of credit projects being established, which will use the HashTree fundamentals, combined with business analytics to establish more accurate risk prediction software, thus making the credit industry more precise and offer rates that are better suited to businesses.
3. Forecasting and Trading
The ability of Ripple and Stellar to transfer funds instantaneously has been noted by the trading industry. Traditionally, buying and selling stocks takes time, which makes the process difficult, as the prices remain dynamic throughout this settlement time. A reduction or complete removal of this interim waiting time will make trading far more transparent and auditable, as well as reducing costs.
4. Hedge Funds
The total value of hedge funds globally assets stands at around $3 trillion, often operating in a system where individuals pool their money in an investment. Transaction fees are high, transparency is low, and liquidity is almost zero.
The decentralised nature of Ripple and Stellar mean that investors from all over the world can trade together, using platforms to find people with aligned interests, creating better investments for everyone involved.
