Ripple is a distributed financial technology  that helps in cross-banking transactions beyond international borders. All these transactions are essentially in accordance with the Ripple Protocol. The ripple transactions are completely secure, instant and nearly free with no chargebacks.

The Ripple Protocol ot the Ripple Transaction Protocol is a set of rules built over the Internet. It is a distributed,open-source consensus ledger technology and brings the native currency XRP into play. The protocol is currently being implemented by many banks and payment instutions such as UniCredit, UBS or Santander.

Ripple plays with fiat currency, cryptocurrency, commodity or any other unit of value as tokens. As of 2016, Ripple is the third largest cryptocurrency, after bitcoin and ethereum.

The idea

The protocol gets incorporated within the already existing system of FinTech companies, and therefore allow their customers to use the service. The transaction takes place between two parties:

1. A regulated financial institution that holds records of transactions.
2. Market makers or people who trade in the currency desk.

The core of Ripple is spun around Blockchain or shared database technology. Also, it holds information about offers to buy or sell currencies and assets, apart from holding transaction data. The consensus holds for payments, exchanges and remittance.

Transactions in Ripple are conducted either using fiat currencies or XRP and are signed cryptographically. If the transactions are XRP-based, Ripple uses its internal ledger. In case, other assets are put to practice,  the ledger records th amount owed as debts.  Also, when the transactions are non-XRP based, the transactions satisfy a mutual balance credit line that satisfy limits of both users. The mechanism of making payments is built over trust among partners and is called “rippling”. It is similar to ‘hawala’ system is several ways.

Why Ripple?

Certain salient features of Ripple result in growth of revenue opportunities, reduce processing cost and a wonderful yield to cutomers:

1. Direct connect to banks across borders.
2. Instant settlement of payments.
3. Funds are traceable at all times.
4. Lowest cost of settlement.
5. Global services for all payment sizes.