Today, most payment networks are disconnected; this makes it impossible to transfer one ledger to another. Payments are only more manageable if the sender and the receiver are in one country or use similar networks. Even if the systems get connected, they will require manual operation, which is slow and costly. The Interledger Protocol thus comes in handy since it uses connectors to route payments between different ledgers. Meaning that the payments go through different interledger modules until they reach their rightful destination. As a result, the interledger protocol gives the opportunity of transferring funds independent of your location or the currency you use. Read on to know about interledger protocol.

The interledger protocol is interfaced between high-level protocols and local ledger protocols. The interledger protocol gives instructions to connectors on where to forward the payments. Since it allows for the protection of the multi-hop payments and routing, networks from different places to connect to any sender with the receiver they want.

The interledger protocol also has minimum requirements which creates a condition in which a payment can be delivered from a source, through interconnected ledgers, to the destination desired. For instance, unlike other payment protocols, it does not require public critical infrastructure and identity.

The primary function of an interledger protocol is to address the host and protect the payments as they pass across the interconnected ledgers. Both the receiver and the sender in the interledger system are required to have an interledger module. The module then acquires the addresses present in the interledger header to transfer the interledger payments to the destinations. This means that interpretation of the interledger address determines the flow of the payments from one module to another. The interledger modules in connectors determine the routing procedures to be followed.

Another benefit of interledger protocol is that in cases of transferring large amounts, it employs holds which only gives two options to the sender’s payments; to go the destination required or to go back to the sender’s account. This ensures that no funds get stolen or lost as the payments move through the different ledgers. You should also know that this protocol individualizes each interledger payment.

Every time a payment is forwarded, the forwarding connector has a responsibility of withdrawing some fee from the inbound amount. The ILP, on the other hand, will only prevent the payment if the connector realizes that the incoming amount is lesser than the destination amount. Keep on reading here, click about USD on interledger.

Find out more details right here:
https://en.wikipedia.org/wiki/Payment_system