Ripple is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc., a US-based technology company. Released in 2012, Ripple is built upon a distributed open source protocol and supports tokens representing fiat currency, cryptocurrency, commodities, or other units of value such as frequent flier miles or mobile minutes.Ripple purports to enable "secure, instantly and nearly free global financial transactions of any size with no chargebacks." The ledger employs the decentralized native cryptocurrency known as XRP, which as of April 2020 was the third-largest coin by market capitalization.
The XRP Ledger processes transactions roughly every 3-5 seconds, or whenever independent validator nodes come to a consensus on both the order and validity of XRP transactions — as opposed to proof-of-work mining like Bitcoin (BTC). Anyone can be a Ripple validator, and the list is currently made up of Ripple along with universities, financial institutions and others.
XRP can be sent directly without needing a central intermediary, making it a convenient instrument in bridging two different currencies quickly and efficiently.
How was Ripple created?
Ripple was conceived by Jed MC Caleb and built by Arthur Britto and David Schwartz who then approached Ryan Fugger who had debuted in 2005 as a financial service to provide secure payment options to members of an online community via a global network. Fugger had developed a system called OpenCoin which would transform into Ripple. The company also created its own form of digital currency referred to as XRP in a manner similar to bitcoin, using the currency to allow financial institutions to transfer money with negligible fees and wait-time.
Ripple Labs continued as the primary contributors of code to the consensus verification system behind Ripple, which can "integrate with banks’ existing networks."Since 2013, the protocol has been adopted by an increasing number of financial institutions to "[offer] an alternative remittance option" to consumers. By December 2014 Ripple Labs began working with global payments service Earthport, combining Ripple's software with Earthport's payment services system. The partnership marked the first network usage of the Ripple protocol. On December 29, 2017, XRP briefly became the second largest cryptocurrency, with a market capitalization of US$73 billion.
A class-action lawsuit was filed against Ripple in May 2018 "alleging that it led a scheme to raise hundreds of millions of dollars through unregistered sales of its XRP tokens. [creating] billions of coins 'out of thin air' and then profited by selling them to the public in 'what is essentially a never-ending initial coin offering'.