The InterLedger Protocol invented by Ripple is an open protocol suite which facilitates sending payments across different ledgers. It’s quite like routers on the Internet. On the InterLedger Protocol connectors route packets of money across independent payment networks. Not being tied to any one company, Blockchain, or currency ensures that it enables interoperability for any value transfer system.
Evan Schwartz, Ripple engineer and Co-Creator of the InterLedger Protocol [ILP], spoke at the CSAIL Initiative Launch Webcast recently. Speaking at the webcast, he spoke about InterLedger Protocol’s role in realizing the Internet of Value [IoV]. The Internet of Value can be described as a vision for how payments work in harmony. This ensures that moving value is as easy as moving information today.
Ripple is a Blockchain start-up which aims to make cross-border payments cheaper and quicker has faced some roadblocks of late. The software company has been hit with three lawsuits by XRP investors. Each of the lawsuits claims that Ripple’s native token, XRP is a security. While the digital currency awaits breathlessly for the SEC’s verdict, the company has moved forward to separate itself from the token. Moreover, these roadblocks haven’t stopped Ripple from trying to increase adoption on a global scale.
Speaking about the current state of affairs and the issues in global payments, Schwartz said,
“It’s really painful if you’re sending money we once heard a comment from a global banking executive saying that they could FedEx cash faster than they could send wire transfers around the world and with greater certainty.”
Evan, who is also the co-creator of the smart contract platform Codius, spoke at length about Ripple’s progress. He elaborated on the company’s efforts towards providing frictionless payments. Speaking about the InterLedger Protocol, he specified its use-case scenario. He said,
“The biggest problem arguably today in payments is that the payment space is super fragmented. In every different country you have different regional payment methods, and if you go travelling there are certain payment methods that work around the world but many of them do not.”
According to him, these payment networks being disconnected from each other is the main problem. One solution to this is to connect the payment networks like the Internet, with providers linked through a series of hops. He further added that the protocol’s uncomplicatedness is an incentive which will ensure widespread adoption. Speaking about ILP’s security, Schwartz said,
“InterLedger uses a two-phase execution when the key part of this is that the sender is guaranteed that the money cannot get lost in the middle.”
He also spoke about using the protocol to conduct micropayments. ILP has an advantage in this space because the current space for micropayments online is fragmented. This ensures that the ILP functions as a common protocol to enable micropayments. He added,
“We talked about the idea of streaming payments, where if you make payments so efficient that you could pay for like a milliliter of beer or a second of video. That’s the way we think about efficiency of payments.”
Image via Underscore VC
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