Ripple is an online, decentralized currency exchange, real-time gross settlement system and a remittance network Ripple is an alternative to the current troublesome and expensive banking system which works across the borders. The company was determined to get rid of the notorious money exchange rules and the huge transaction fees. Processing delays, lack of transparency and the most ridiculous of them all, higher currency exchange rates are eliminated by Ripple.

Ripple payment protocol focuses on bringing together payments providers, digital assets exchange, corporates and financial institutions such as banks. Contrasting with other popular cryptocurrencies such as Ethereum and Bitcoin, Ripple has its goals clear. A basic infrastructure aimed at optimizing the world payments process.

In addition, Ripple has partnered with partnered with high profile companies such as Google. It also works with Gateway whose mandate is to facilitate customer deposits in several currencies such as Euros and US dollars.

Unfair advantage

Unlike other cryptocurrencies and payment networks, Ripple has a very different strategy which leaves them outstanding. Ripple’s technology facilitates payments using the existing financial systems. It therefore doesn’t compete with the existing financial institutions. They both operate with a symbiosis relationship. Due to Ripple’s support of multiple digital currencies, inclusive of fiat currencies, the members are not required to convert their local currencies into Ripples.

Sitting on top of the already existing bank technology, Ripple complies with privacy, risk and regulatory requirements. Payments via Ripple either go through or fail (Settlement Risk). This competitive advantage makes Ripple an efficient and effective payment network amidst the many payment platforms.

What is Ripple capable of?

There are no restrictions from a central authority since Ripple protocol is open source and its network’s shared ledger is open to the public. Any user can create a wallet or monitor network behavior; thus anyone can become a market maker. With this possible, there is reduced competition and increased uptake of the services which makes the network useful to everyone.

The concept behind Ripple Payments

a. A sender specifies an amount and a currency that the recipient should receive.

b. Ripple converts the sender’s currencies automatically. A user may have support of various currencies and thus Ripple will only convert the available currencies at the time of the payment. This is made possible by the integration of the distributed order books into the Ripple protocol.

c. Independent third parties provide liquidity in the order books because they act as market makers. Through the use of a pathfinding algorithm, Ripple’s users enjoy the lowest costs available. The algorithm considers currency pairs during the conversion from the source currency to the destination.

The algorithm searches for a number of currency swaps from which the user will get the lowest cost. Market forces usually drive fees to the lowest point. This comes as a benefit of having anyone participate as a market maker.

Ripple products

  • XRapid (For banks)
    Through this platform, banks hold foreign currencies to allow rapid transactions. Through this platform, dubbed “nostro accounts”, banks are able to transfer funds easily.
  • XCurrent
    Platform that employs standardized technology that enables banks to message and transact efficiently with increase transparency and speed.
  • XVia
    A global payment transaction system which allows corporates to securely start real-time payments with their data attached.

The advantages and disadvantages while working with Ripple

Just like the case with a physical coin, it has a front and a back side. You will agree with me that everything that has a good side, has a bad side too. Luckily, the disadvantages are very few as compared to the benefits.


  • Fast and minimal latency
    The first shot is always the best. Ripple’s biggest advantage is speeding up global transactions via it’s fast payments, complemented by the low processing fees.
    Through PayChan feature, there is an almost zero latency in transactions. The costs accrued by PayChan transactions are just a fraction of the cost incurred while using credit card.
  • Bank Partnership
    Over 100 banks initially teamed up with Ripple which put them on the global limelight of becoming the leading online payments system. Interestingly, Ripple’s users and resources continue to increase and thus many more other banks have jumped in the prevailing wagon. Accountants and bankers know the advantage of having zero latency and instant payment.
    Banks stand to gain too. They can directly sell Ripple across other financial institutions and give them a chance to carry out payments globally.
  • Infinite scaling
    Ripple gives room for infinite scaling due to the original out of the box architecture. The biggest threat facing Blockchains, including the legendary and famous bitcoin, is how to deal with the increasing users. Many developers are working day and night to try and get a comprehensive solution to this issue. Currently, no success has been achieved so far in handling the rising users
    Like I said before, Ripple uses a different approach to this problem. By deploying the InterLedger protocol which allows different blockchains to work together, Ripple tricked or more precisely dodged the problem. This protocol permits cross-ledger transactions. This means that at no time will there be an overload in users on one ledger.


  • Anonymity
    Unlike other cryptocurrencies, Ripple offers a less degree of anonymity. However, work is underway to see full anonymity in the long run.
  • Gateway counterparty
    Although this is a threat, it only affects the willing users. If for example, you use a trusted gateway, you stand no risk of losing your coins on Ripple. Nevertheless, the Ripple team is working to have trusted gateways and multiple gateways as a way of establishing multi-level trust technique.
  • Variety of coins
    Ripple owns almost three-quarters of all coins, they therefore control the prices. For business enthusiasts, you know the challenges working with a monopoly.

Ripple is slowly dominating the digital currency market by targeting banks. Through Ripple, banks can make global money transfers cheaply and instantly. Transactions are confirmed within 4 seconds on Ripple. Additionally, Ripple handles more than 600,000 transactions in one minute. These digits are hardly achievable by Bitcoin and Ethereum, which are the largest blockchains in the crypto market.

Why Ripple is a better than the traditional payment networks

  1. It’s integration into the existing banking software.
  2. Can easily be integrated into the accounting software which enhances efficiency in booking-keeping.
  3. Provision of revocable access to KYC/KYT data to corporates, financial institutions, accountants and other users of Ripple.
  4. Facilitates secure cryptocurrency payments while associating KYT/KYC data via the distributed ivyKoin network.
  5. Storing securely an immutable reference to transaction’s data publicly.
  6. Eliminates the need for intermediaries while carrying out transactions.

Last Words

Speed is the word. Three seconds for Ripple transactions is incomparable to 2-3 days needed for cross-border payments on other platforms. What makes Ripple users smile is the minimized credit risk, exchange spreads, collateral costs, and eliminated delays with low fees Ripple has secured end-to-end payments with information redundancy and transaction immutability.
References: Market Maker · XRP