Ripple is a protocol for cryptocurrency transactions primarily focused on offering solutions to the financial sector for implementing blockchain technology.
Banks and other financial institutions have been experimenting with ways to implement blockchain technology for years. Many of these have gravitated toward Ethereum, with its platform distributed applications and smart contracts, but the San Francisco-based startup Ripple has been gaining traction in this space recently.
Ripple’s developers have always intended to make it solely a transactional medium that would be secure, scalable, and faster than most other blockchains. When it comes to conversions between traditional fiat currencies and other cryptocurrencies, Ripple brings advantages to the table. Instead of relying on centralized exchanges such as Kraken, Poloniex, Mt. Gox, and so on, the protocol performs exchanges itself, on the blockchain, cutting out the middlemen wherever possible. It can fully settle large cross-border transactions in about 4 seconds, while Ethereum tends to take a couple of minutes and bitcoin can take a couple of hours.
The development team likes to develop specific solutions for specific clientele and particular uses since the platform is quite flexible. This is a sharp contrast to most other cryptocurrencies, which are basically ad-hocracies with no clear direction. Ripple always intended to be a service used by large financial institutions. According to the Ripple website, it boasts transaction times 100x faster than Ethereum and 250x faster than Bitcoin. The traditional banking system, of course, can take about 3 days to a week to fully settle, using the aging SWIFT system of international settlements.
Ripple has its own token cryptocurrency, XRP, which tends to primarily be used as a medium for exchanges and conversions in other currencies (rather than used to make real-world purchases). Even with Bitcoin, owners of the coin are not eager to buy mundane day-to-day items with it because it could still exponentially grow in value in the near future. A new hedge fund announced in 2017 by the founder of TechCrunch is actually denominating itself in XRP, instead of taking dollars and exchanging them for cryptocurrencies, the limited partners will come to the table with XRP. Another difference between Ripple and other cryptocurrencies is that it is developed by a for-profit company rather than as a non-profit organization.