In four words or less: Enterprise payment settlement network

Ripple is a digital asset that allows financial institutions to make faster, cheaper global payments. To meet the demands of these institutions, Ripple can already handle 200 times more transactions per second than Bitcoin. The Ripple currency (XRP) doesn‘t serve as a medium to store and exchange value, but as a token to protect the network against spam. Global financial institutions are watching Ripple with growing interest.

What problem does Ripple solve:  In a world where three billion people are connected online, cars drive themselves and appliances can communicate, global payments are still stuck in the disco era. Why? The current SWIFT payment infrastructure was built in the pre-Internet era and requires getting six players linked up – (payer, payer’s bank, payer’s bank’s correspondent, beneficiary bank’s correspondent, beneficiary bank, beneficiary) to make payments which can take days. Those payments can be completed in seconds with Ripple.

Properties of Ripple:

  • XRP is one of the fastest and most scalable digital asset platforms
  • Built for enterprise use XRP offers banks and payment providers a reliable, on-demand option to source liquidity for cross-border payments
  • It enables real time global payments anywhere in the world
  • XRP payments are extremely fast and settle in approx. 4 seconds
  • Ripple consistently handles 1,000 transactions per second and can be scaled-up to handle the same payment volumes as Visa
  • Compared to crypto-coins like Bitcoin, Ripple is centralised and not decentralised

Management and governance:

Ripple (the company) is the creator and developer of the Ripple payment protocol and exchange network. Originally named Opencoin and renamed Ripple Labs in 2015, the company was founded in 2012 and is based in San Francisco.

Adoption and penetration: 

Ripple has partnered with several powerful banks to build and trial a system for payments between global financial institutions. Ripple is in a unique position in that while banks have remained somewhat sceptical of Bitcoin, they may be open to the potential of Ripple to improve the speed and efficiency of financial transactions. 

Risks and limitations:

Ripple is not a decentralised crypto coin in the true sense of the term. This is because large amounts of XRP are held by the founders and they control the network. Centralised coins are viewed as potentially less secure.

Competition: SWIFT, Stellar