Researching the history of Ripple, looking for some clarification on a couple things.

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In the early days of ripple, the company was called RipplePay. It’s vision was to replace banks by stripping the system down and maintaining that all a bank really does is make and receive loans, so if Bob sent Alice $20, that would mean Bobs loan to the bank would reduce slightly and Alices’ would go up slightly.

They wanted payments to be processed using peer to peer trust networks. EX- [Here](https://imgur.com/a/rsqV7)

My question is how would these peer to peer networks work in theory to get that $20 from Alice to Bob?

Secondly, later on in Ripple’s life the Ripple Gateway Structure was implemented. It solved the problem of having the money have to run through these shaky trust lines. EX – [Here](https://imgur.com/a/tOTP4)

Can someone explain to me how money goes into the gateway and comes out as a processed payment?

Thanks in advance. Loving learning about this awesome tech. May we see some green today.

2 COMMENTS

  1. > In the early days of ripple, the company was called RipplePay.

    No. That was a completely different company.

    Read up on Hawala and Ripplepay/Ripple Classic.

    All this gateway/personal credit/decentralized market stuff still works with XRPL by the way… the only thing that is turned off by default usually is rippling.

  2. I’ve been wanting to make an in depth video about this and more for a while now. Will do at some point.

    I believe what you are asking about is how Trustlines work.

    What is Interesting (at least to me) is how the Ripple team has worked towards ILP, which abstracts away the rcl ledger, but they still need the trustlines functionality.

    It looks like Payment Channels will be the “trustlines” in an ILPv4 world.

    Other options are, IOUs on a bank’s own RCL (nostro/vostro style) pre funded or credit with net settlement. Also Escrow used in the pre ILPv4 methods, acted as a trustline.

    Here is Tim explaining trustlines within an RCL https://youtu.be/Z7Pn_7ralYM

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