What is Ripple?
Ripple (XRP) is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc., a US-based technology company. Ripple is built upon a distributed open source protocol, and supports tokens representing fiat currency, cryptocurrency, commodities, or other units of value such as frequent flier miles or mobile minutes. Released in 2012, Ripple purports to enable secure, instant and nearly free global financial transactions of any size with no chargebacks.
Ripple’s distributed financial technology allows for banks and other financial institutions to directly transact with each other without the need for a central counterparty or correspondent. It also allows for the direct exchange of different currencies in a matter of seconds, including traditionally fiat currencies and other digital assets. The goal of Ripple is to make international payments faster, cheaper and easier.
Ripple users can transact in any currency with anyone in the world, regardless of currency or location, with low transaction fees and near-instant settlement. Transactions are processed on a distributed ledger technology (DLT) system similar to the blockchain of Bitcoin, but different in that it uses a consensus process to validate Ripple transactions.
In 2016, Ripple introduced its own internal digital asset, XRP, to act as a bridge currency between two countries’ different currencies. The use of XRP helps speed up international money transfers that typically take days.
Ripple Labs also created a new payment system, developed on top of its own cryptocurrency called XRP. The system called RippleNet is a network of institutional payment-providers such as banks and money service businesses that use the RippleNet software to process their customers’ cross-border payments. By using RippleNet, payment providers and financial institutions can process the payments much faster and with lower costs.
Since its launch in 2012, Ripple has gained traction as a leading financial technology provider. Major banks, including American Express and Banco Santander, have already adopted the Ripple protocol. Many other financial institutions have also shown interest in the technology.
In summary, Ripple is a distributed financial technology platform designed to facilitate cheap, fast, and secure global payments. By using RippleNet, banks and other financial institutions can process cross-border payments much faster and cheaper than traditional methods. The use of Ripple’s own cryptocurrency XRP acts as a bridge currency and eliminates the need for intermediaries, thus increasing the speed and security of these payments. Ripple is quickly becoming a viable alternative to traditional payment systems and has the potential to revolutionize the way money is transferred around the world.
