On digitial currencies: Ripple and TransferWise

Two tech start-ups that have caught my attention lately are Ripple and TransferWise. I’m fascinated by the development of the Bitcoin ecosystem and these two companies have found their unique way in leveraging the Bitcoin system and monetary transactions. With Bitcoin and digital currencies being a very hot topic these days I’m sure there are other smart entrepreneurs in this area of the tech world. Please comment and send links below to educate me and others.

Ripple “the world first open payment network” allow you to send money in Bitcoin, dollar, euros and yen almost for free. Their fee is as low as $0.0001/transaction and each transaction is confirmed in seconds according to their website. Now that sounds like strong competition to the fees charged by banks and services such as PayPal. The ripple payment system is still in beta testing stage and at the time of writing it’s possible to sign up for early access on their site www.ripple.com

Ripple is actually more than a payment network, it is also a digital currency called “ripples” or XRP. The currency can similar to Bitcoins be sent anonymously and instantly. Just as with Bitcoin there are no central authority such as a central bank. Also like Bitcoins which are limited to 21 million coins, there can only exist 100 billion ripples. As you can see there’s a lot of similarities between Ripple and Bitcoin.

So how much are these ripples worth? You can find out here: https://ripplecharts.com/market/XRP/USD:Bitstamp

Another interesting thing is that the OpenCoin Inc. the company behind the ripple network have recently attracted investments from Google Ventures, Andreesen Horowits, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and the Bitcoin Opportunity Fund.

The next company is called TransferWise a UK start-up that have attracted investors such as Peter Thiel, IA Ventures, Seedcamp and TAG. While this is maybe not as rebellious as a crypto currency it does create a buzz. With TransferWise you can send money abroad. It sounds similar to PayPal, Western Union or Telegraphic transfers but with the promise of low fees and better exchange rates compared to your bank. The idea is to use a peer-2-peer model to transfer your money sometimes even without the need for a currency exchange. A transfer doesn't actually have to leave the sending country, the amount can be offset by another transaction handled by a transfer in the opposite direction.

Currently seven currencies are supported; EUR, USD, PLN, CHF, NOK, SEK, and DKK but I have the feeling that more will be added soon.

There seem to be no end to innovations that are taking fees from banks today. The slogan of TransferWise is “bye-bye banks. You’ve had your fun”.  The question is if traditional banks have reason to worry…

On another yet related note, Mt-Gox the Japanese Bitcoin currency exchange boasting the largest traded volume of Bitcoins will require users to verify themselves while making deposits/withdrawals. The Bitcoin protocol which prides itself in being anonymous to use will remain so. Its believed the exchange hopes to gain respectability after numerous attempted hacking attacks and the shutdown of Liberty Reserve.