How does Flash Payments use Blockchain
Flash Payments uses Ripple distributed ledger technology to help your money get from A to B in real-time. If you are used to sending money overseas with your bank, the idea of real-time transfers may sound too good to be true. Well, we are here to tell you it isn't!
You may have heard of the term 'distributed ledger' in the context of blockchain. These technologies remove the need for a centrally coordinated entity, and enable the instant transfer of "value" in all forms - money, securities, ownership of information.
Flash Payments is at the forefront of using this innovative new technology to help Australians save time and money when transferring money overseas.
What is Ripple?
Ripple is a real-time gross settlement, currency exchange and remittance network specifically designed for banks and payments networks. It was borne out of the idea to create a near-instant way to transfer assets that is more secure, transparent and faster than the traditional money transfer corridors.
How does Ripple work?
Ripple is a distributed, open-source payments system. Every transaction that takes place on the Ripple network needs to be independently validated by multiple servers, known as 'nodes', across the internet. The nodes on the Ripple network share information about individual transactions and then, through a process known as consensus, come to an agreement about whether or not the transaction is "valid". Once the nodes validate a transaction a new version of the ledger is published across the network to reflect this new information.
What are the benefits of Ripple for transferring money overseas?
Banks rely on the outdated SWIFT messaging system to facilitate cross-border payments. The process is costly, cumbersome and slow. This is because the SWIFT system requires a number of middlemen between the local and receiving bank. Each intermediary is taking a cut of your transfer in the form of fees. That explains why it takes 2-3 days for your funds to arrive and why the amount that shows up is always less than what you were expecting.
Ripple turns the SWIFT payment system on its head. By removing the need for middlemen (in the form of local correspondent banks) Ripple makes international money transfers decidedly cheaper and more efficient. The benefits are felt where they matter most - in your bank account.
The advantages of using Ripple don't end with traditional cross-border payments. Ripple allows Flash Payments to support real-time transfers to some offshore cryptocurrency exchanges.
How do I know Ripple is safe?
All of the transactions on the Ripple network are recorded securely using cryptography. Each transaction is connected to all the transactions before and after it, making it extremely difficult to tamper with the data. A hacker would have to change the "block" containing the record, as well as those blocks linked to it, in order to avoid detection. This structure makes historical transaction data on Ripple extremely secure.