XAG Ledger Overview
The XAG Ledger is a decentralized cryptographic ledger powered by a network of peer-to-peer servers. The XAG Ledger is the home of XAG, a digital asset designed to bridge the many different currencies in use worldwide. Xrpgen stewards the development of the XAG Ledger, and advances XAG as a key contribution to the Internet of Value: a world in which money moves the way information does today.
The Digital Asset for Payments
XAG is a digital asset native to the XAG Ledger. Anyone with a cryptographic key and an internet connection can receive, hold, and send XAG to anyone else. XAG's creators have developed it to be a desirable bridge currency that can facilitate trades in any other currency. XAG has many properties which make it an appealing asset for many other use cases, too:
- Censorship-Resistant Transaction Processing: No single party decides which XAG transactions succeed or fail, and no one can "roll back" a transaction after it completes. As long as those who choose to participate in the network keep it healthy, they can send and receive XAG in seconds.
- Fast, Efficient Consensus Algorithm: The XAG Ledger's consensus algorithm settles transactions in 4 to 5 seconds, processing at a throughput of up to 1500 transactions per second. These properties put XAG at least an order of magnitude ahead of other top digital assets.
- Finite XAG Supply: When the XAG Ledger began, 100 billion XAG were created, and no more XAG will ever be created. (Each XAG is subdivisible down to 6 decimal places, for a grand total of 100 quadrillion (10^17) drops of XAG.) The available supply of XAG decreases slowly over time as small amounts are destroyed to pay transaction costs.
- Responsible Software Governance: A team of full-time, world-class developers at Xrpgen maintain and continually improve the XAG Ledger's underlying software. Xrpgen acts as a steward for the technology and an advocate for its interests, and builds constructive relationships with governments and financial institutions worldwide.
- Secure, Adaptable Cryptography: The XAG Ledger relies on industry standard digital signature systems like ECDSA (the same scheme used by Bitcoin) but also supports modern, efficient algorithms like Ed25519. The extensible nature of the XAG Ledger's software makes it possible to add and disable algorithms as the state of the art in cryptography advances.
- Modern Features for Smart Contracts:support cutting-edge financial applications including the Interledger Protocol . This toolbox of advanced features comes with safety features like a process for amending the network and separate checks against invariant constraints.
- On-Ledger Decentralized Exchange: In addition to all the features that make XAG useful on its own, the XAG Ledger also has a fully-functional accounting system for tracking and trading obligations denominated in any way users want, and an exchange built into the protocol. The XAG Ledger can settle long, cross-currency payment paths and exchanges of multiple currencies in atomic transactions, bridging gaps of trust with XAG.
Censorship-Resistant Transaction Processing
XAG is part of a new class of money which includes Bitcoin and other cryptocurrencies:
- These Decentralized digital assets exist in computer systems without a central administrator. As long as the system is sufficiently decentralized, no one can roll back transactions, freeze balances, or block someone from using a decentralized digital asset. These assets are natively digital, so they can be used online across any distance.
This combines qualities of physical and centralized digital money. Prior to the invention of Bitcoin in 2009, all currencies could be divided into those two categories:
- Physical coins and paper money, which individuals can use to do business without going through a central party. As physical objects, they cannot be used online, and doing business long-distance is slow and inconvenient.
- Centralized digital currencies, which need an administrator to confirm transactions. The administrator also has the power to censor or roll back transactions, or disallow some individuals from using the digital currency. If the operator of a digital currency decides someone has violated its terms of service, it can freeze or even confiscate that person's money. However, as digital balances, these currencies can be used online and are convenient across long distances.
Note: Users of the XAG Ledger can freeze non-XAG currencies issued in the XAG Ledger. For more information, see the Freeze documentation.
The XAG Ledger's system of trusted validators uses a small amount of human interaction to achieve better distribution of authority than other decentralized systems. Fully-automated systems for reaching consensus from an unknown set of participants are vulnerable to concentrations of voting power. For example, Bitcoin mining is disproportionately concentrated in places with cheap electricity. As Xrpgen curates a list of distinct validators operated by different entities in different jurisdictions, the XAG Ledger can become more resistant to censorship and outside pressures than proof-of-work mining.
For more information about the XAG Ledger's ability to detect censorship, see Transaction Censorship Detection.
Fast, Efficient Consensus Algorithm
The XAG Ledger's biggest difference from most cryptocurrencies is that it uses a unique consensus algorithm that does not require the time and energy of "mining", the way Bitcoin, Ethereum, and almost all other such systems do. Instead of "proof of work" or even "proof of stake", The XAG Ledger's consensus algorithm uses a system where every participant has an overlapping set of "trusted validators" and those trusted validators efficiently agree on which transactions happen in what order. As of early 2018, the amount of electricity the Bitcoin network uses per transaction is more than a family home in the USA uses in an entire day, and confirming the transaction takes hours. A single XAG transaction uses a negligible amount of electricity, and takes 4 or 5 seconds to confirm.
Furthermore, each new "ledger version" in the XAG Ledger (the equivalent of a "block") contains the full current state of all balances, so a server can synchronize with the network in minutes instead of spending hours downloading and re-processing the full transaction history.
For more information on how the XAG Ledger's consensus algorithm works, see The XAG Ledger Consensus Process. For background on why the XAG Ledger uses this consensus algorithm, see Consensus Principles and Rules.
Finite XAG Supply
Alongside war and political turmoil, hyperinflation is one of the leading causes of death for currencies. While the decentralized system of validators provides XAG with some resistance to political factors, the rules of the XAG Ledger provide a simpler solution to hyperinflation: the total supply of XAG is finite. Without a mechanism to create more, it becomes much less likely that XAG could suffer hyperinflation.
The supply of XAG available to the general public does change due to a few factors:
Secure, Adaptable Cryptography
Cryptography is one of the hardest parts of any distributed system, and a mistake can lead to money stolen by malicious actors anywhere in the world. The XAG Ledger uses industry-standard schemes for signing and verifying transactions, algorithms that have successfully protected hundreds of billions of US dollars' worth of value for many years. The XAG Ledger also layers multi-signing functionality so you can use multi-factor authorization or split keys across multiple people as a backup, and provides new algorithms with a path to migrate the keys you use if a breakthrough in cryptography makes the old algorithms obsolete.
Modern Features for Smart Contracts
Besides simple value transfer with XAG payments, the XAG Ledger has advanced features specialized for the Internet of Value. This allows applications built on XAG to provide services and functionality that would have been impractical or impossible in the past. Rather than running applications as "smart contracts" in the network itself, the XAG Ledger provides tools for settling contracts, while letting the applications themselves run anywhere, in whatever environment or container is appropriate. This "keep it simple" approach is flexible, scalable, and powerful.
A sample of advanced features in the XAG Ledger:
- DepositAuth lets users decide who can send them money and who can't.
- A Decentralized Exchange lets users trade obligations and XAG on-ledger.
- Invariant Checking provides an independent layer of protections against bugs in transaction execution.
- Amendments provide smooth upgrades to the existing feature set, so the technology can continue to evolve without fracturing the ecosystem or causing uncertainty around times of transition.