As you may already know, Bitcoin is not the only manner of sending digital money across the Internet. Some other options include Stellar, Ripple, Litecoin, and Ethereum alongside with many others.
While Bitcoin is by far the most popular option out of these, there is always a way of creating something better. An interesting idea has recently begun taking shape, and it aims to allow all these ledgers to talk to one another. To put things better into perspective, the platform would allow people to send money between the systems via the same protocol. This can be accomplished by creating a single worldwide network that can easily unite all digital currencies and their afferent networks, together with the actual cryptocurrency users. In technical terms, the platform builds a system where two ledgers can exchange money through something known as a third-party connector, or validator machine. However, thanks to cryptographic algorithms, an escrow of the funds is created, and the exchange is only made when both parties agree that the right sum is available, thus getting rid of trust issues. In the case of domestic transactions, ledgers participating also have the possibility of choosing domestic validators, which means that only the ledgers which are involved in the transaction can track it, thus hiding the particulars of the transaction from the validator.
Also known by the name of the ‘Interledger Protocol’, the project was first started by the company that oversees Ripple, another payment method. Following its public announcements, it has managed to gain quite a lot of support from the community, but also from some notable names including the World Wide Web consortium and Microsoft.
Ripple Chief Technology Officer (CTO), Stefan Tomas stated that “This will be something that sits on top of all the ledgers and abstracts the differences. We’re trying to create a global standard for payments.”
If things turn out to be successful, then the protocol will likely increase the adoption of digital currency, while also removing all cross-platform related issues that users have to deal with. Based on this, you can send Bitcoin and receive Litecoin, or send US dollars and receive Dogecoin, the options being basically endless. In the short term, before public adoption, the platform will also grant banks and other financial institutions the possibility to efficiently exchange fiat and digital currencies. Together with this, the Interledger Protocol also has the potential of encouraging businesses to adopt the blockchain technology, which will allow them to quickly move financial securities, stocks, real estate titles and more, while also removing the bureaucratic issues that firms have to deal with so often.
Based on everything that has been outlined so far, what do you personally think about the Interledger Protocol? Will it be a good addition to the digital currency market? Let us know your thoughts in the comment section below.