Ripple – The Game changing Cryptocurrency

Ripple and its applications

Blockchain technology has recently received a lot of attention, largely thanks to its contributions to the financial industry in the form of cryptocurrencies. There are a variety of cryptocurrencies on the market, including bitcoin, Ethereum, Ripple, and many others. Each of these cryptocurrencies differs from the others in many ways.

In this article, we will learn everything there is to know about Ripple, one of the most well-known and significant cryptocurrencies.

What is Ripple?

Understanding what Ripple is first is crucial if we talk about it. Ripple is a financial transaction system that works as a cryptocurrency and a digital payment network. Chris Larsen and Jed McCaleb co-founded it in 2012.

Banks and other financial intermediaries use the payment settlement, asset exchange, and remittance system at the heart of ripple to conduct international transactions. All cryptocurrency transactions use Ripple’s XRP coin, which is a proprietary cryptocurrency. A form of transitory settlement layer denomination, XRP’s goal is to serve as a middleman for transactions between two networks or currencies.

The XRP Ledger and the XRP coin are independent of the Ripple company. However, the Ripple business uses them in various ways, according to multiple statements and documents made by the company over the years. Major banks and financial institutions are customers of the global payments network Ripple.

1.    Digital Hawala Service

Hawala is an unofficial method of remitting money, typically across borders, without using actual money. As a digital Hawala service, ripple operates.

Let’s say that Person A needs to send $100 to Person B, who lives in a different city.

  • Person A arranges for Agent C, Person B’s local agent, to receive the money from Person B. Person B is likewise given a secret code by Person A, which he must correctly decipher to claim the money in his city.
  • Agent C provides information about the transaction, including the receiver, the amount to be reimbursed, and the password, to Agent B’s agent. Agent D. Person B will receive $100 from Agent D if he tells her the right password.
  • But since the funds came from Agent D’s account, it is implied that Agent C owes $100 to Agent D. (which will be settled later). Agent D has two options for managing Agent C’s debts: either she keeps a list of all of her obligations, which Agent C would settle on a specific day, or she makes countermoves to make the debt equal.
  • The $100 owed to Agent D would be balanced out since Person F would get payment from Agent C’s account if Agent D were also Person E’s agent and Person E intended to send $100 to Person F, whose agent is Agent C.

2.    Gateway Medium

This example somewhat exemplifies the Ripple network’s operation because it deals with the need for confidence between two points (people) during transactions. To act as a link in the chain of trust between two parties looking to conduct commerce, Ripple uses a medium known as Gateway.

Gateway serves as a credit middleman across the Ripple network, accepting and delivering money to open addresses. Anyone or any business may sign up and establish a gateway, enabling them to act as a middleman for converting currencies, maintaining liquidity, and transferring funds throughout the network.

Working of Ripple

  1. A proof-of-work (PoW) algorithm like that used by Bitcoin or a proof-of-stake (PoS) algorithm like that used by Nxt or Ethereum 2.0 is not used by the Ripple network or the XRP Ledger.
  2. Transactions on the system instead rely on a consensus method called XRP Ledger Consensus Protocol to verify account balances and transactions. The consensus seeks to increase the system’s integrity by preventing double expenditure.
  3. By consensus, individual distributed nodes determine which deal was executed first. The immediate approvals take approximately five seconds to complete. Since no central authority chooses who may establish a node and confirm transactions, the Ripple system is characterised as decentralised.
  4. Ripple keeps track of all IOUs in a certain currency for each user or gateway. IOU credits and transaction flows between Ripple wallets are made public by the Ripple consensus ledger.
  5. Although the history of financial transactions is publicly visible and recorded on a blockchain, no specific person or company’s ID or account is associated with the data. However, since every transaction is recorded in a public ledger, de-anonymization methods can be used to access the data.

Advantages and Disadvantages of Ripple


  • People who must endure long waiting times for their cross-border payments benefit from Ripple’s speed and ease of use. Regardless of the concerned regions or the payment kind, it sends capital swiftly.
  • The solution is commonplace because so many players are involved in RippleNet. According to the increasing network phenomena, the more conventional companies adopt Ripple’s solution, the more influence Ripple will have in the future.


  • Society for Worldwide Interbank Financial Telecommunications (SWIFT) is the ultimate rival of Ripple in terms of its objectives in this area, and carving out a niche in the established industry against a well-known brand can need more time, effort, and study.
  • There are rivals in the market besides SWIFT, such as Stellar, so Ripple must continually improve its offerings and monitor its expansion within the cryptocurrency field to keep ahead of the competition.

Applications of Ripple

  • Banks are experiencing problems such as increased expenses and operational overhead compared to more contemporary technology due to the use of SWIFT. Using a range of techniques, Ripple aims to develop an effective way to send money directly that settles in real-time and is less expensive, more secure, and more transparent than the transfer methods currently employed by established financial institutions.
  • The Internet of Value, or IoV, is a concept that Ripple advocates. According to Ripple, people should be able to send money and information simultaneously.

The fact that so many businesses are adopting Ripple indicates that the tokens will eventually become significant commodities in and of themselves. One XRP token’s value rose more quickly last year than the price of Bitcoin or any other cryptocurrency combined.

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