What makes Ripple efficient?
Banks employ millions of people to manage the trust relationships which give value to national currencies. The must ensure that account holders are paid on demand, and that loans are only made to creditworthy individuals. Since human beings have evolved to form trust relationships with other human beings, and not with institutions, the whole process is problematic, and requires a gargantuan legal framework of bureaucrats, lawyers, regulators, and accountants to stabilize it. We all pay for this system in innumerable ways, through interest charges, service fees, taxes, and lost productivity in the economy. Too much of our effort is devoted to regulation and not enough to actual production. Imagine if thousands of bankers and bureaucrats could quit their jobs without hurting the GDP! (This would probably actually improve the GPI.) Ripple currency is underpinned by natural trust relationships that exist already within families and between friends. Bureaucrats and coercive legal frameworks
