Ripple is a payment protocol, cryptocurrency creator and high-tech payment firm that uses blockchain technology to help banks conduct fast global financial settlements. It works off of their digital currency XRP tokens (ripples), which trades publically on their own currency exchange.
In using blockchain technology, Ripple offers partners security, reliability and verifiability by using their software and enterprise network to enable instant, traceable transfers of funds between one country and another. It uses an open-source protocol that allows partners to incorporate the software into their own systems and offer the service to their customers.
Like Bitcoin, Ripple used blockchain, a form of
ledger for transactions. Payments made through a blockchain are recorded on computers across the associated network. The technology is also used to enable digital contracts, financial trades
identity verification. Unlike Bitcoin, which is a currency owned by anyone who wants to buy it on the exchange, Ripple and XRP tokens are backed by RippleLabs, a global money transaction business. Because of this, Ripple is more centralized than Bitcoin and other digital currencies as it is essentially backed by traditional currencies as if it is like dollars, pounds or yen in another form.
Ripple is used by several financial institutions like American Express, Santander, UniCredit
UBS. It has become increasingly popular with banks and other payment networks as a secure settlement infrastructure technology. The system makes it simple to check the status of a payment and the record of the cost of a transaction. The technology that Ripple created also allows the transfer of one fiat currency to another without switching to an intermediate cryptocurrency.