What is Ripple and why you should care

17 Jan 2018

Money can be anything, a stone, a metal, a rubber, a coin, a cryptocoin or a piece of paper. Although money has no intrinsic value per se, it derives its value from its properties and from social and economic circumstances. Anything that we call money possesses one of three characteristics: acts as a medium of exchange, acts as a unit of account (unit of measurement), and stores value.

The world economy has come a long way from a simple and direct Barter system, where goods and services were exchanged, to a more complex cryptocurrency-based economy, having faced several “updates” along the way.

In less than a decade, the cryptosphere itself has come from a simple experiment amongst the tech-savvy to a global phenomenon and widely used payment system. Ripple is one of the biggest projects in the space and that has deeply contributed to the emergence of the aforementioned global phenomenon.

What is Ripple

Ripple is an open source, P2P payment protocol. Simply put, the platform allows anyone to transfer money in any currency to any currency in a matter of seconds.

Ripple’s digital asset, XRP, built mainly for enterprise use, offers banks and payment providers a highly efficient, scalable, and reliable liquidity option to service cross-border payments.  

The payment protocol can be integrated with customers’ own systems and is now being used by companies like Santander, Bank of America, UBS, just to name a few. Ripple managed to bridge the gap between the cryptosphere and the world’s legacy economic system. This wide adoption by and connections to legitimate banks is one of the factors that differentiates Ripple from other cryptocurrency platforms and that drives its price surge on the charts.

Ripple’s chief cryptographer, David Schwartz, explains:

“Payment systems today are where email was in the early ‘80s. Every provider built their own system for their customers and if people used different systems they couldn’t easily interact with each other. Ripple is designed to connect different payment systems together.”


The main benefits Ripple’s payment network and token (XRP) have to offer their customers are, the previously scrutinized, connectivity between payment systems (access), speed, certainty and cost. Regarding the speed, it takes only 3.7 seconds for a transaction to be settled using Ripple’s network, which is not only much faster than traditional bank transactions but also much faster than Bitcoin which is averaging 168 minutes per transaction. Moving on to certainty, blockchain technology guarantees real-time traceability of funds. Last but not the least, liquidity. Having good liquidity between fiat and cryptocurrencies on a global basis is paramount to the success of the project. Low operational and liquidity costs is what enables real-time payments in emerging markets.

Unlike Bitcoin, XRP isn't created, or "mined," by users. But then again, Ripple’s objective was never to be a Bitcoin direct competitor, but rather a Bitcoin complement. Instead of being created or ‘mined’, tokens have been previously issued or “pre-mined” and are destroyed when a transaction is settled.

A few months ago, the company’s centralized control over the tokens was met with distrust by the crypto-community. This eventually led to the decision of Escrowing 55 bln out of the 100 bln tokens.


Ripple connects banks, payment providers and digital asset exchanges via their platform to provide one frictionless experience to send money globally.

Ripple is not your average cryptocurrency, unlike others, it has “real-life” customers, volume and value.

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