Ripple can be defined as a technology that goes about as both a digital payment network for financial exchanges as well as a cryptocurrency.
It was first announced in the year 2012 and was founded by Jed McCaleb and Chris Larsen.
The coin symbol for the cryptocurrency is XRP.
Ripple is widely recognized for its digital payment protocol even more than its cryptocurrency, XRP.
Ripple works on an open-source and peer-to-peer decentralized platform that enables for a seamless exchange of money in any form, regardless of whether dollar, Yen, Litecoin, or Bitcoin.
To see how the framework functions, think about a money exchange structure where the two people on either end of the exchange utilize their favored agents to get the money.
Ravi needs to send Rs. 5000 to Kishan who lives in a different city.
He gives his local agent, Jagriti, the money to send to Kishan with a password that Kishan is required to answer correctly to receive the funds.
Jagriti alerts Kishan’s agent, Ravina, of the transaction details – recipient, funds to be reimbursed, and password.
If Kishan gives Ravina the right password, Ravina gives him Rs. 5000.
However, the money comes from Ravina’s account which means that Jagriti would owe Ravina Rs. 5000.
Ravina can either record a journal of all Jagriti’s debt or IOUs which Jagriti would pay on an agreed day, or make counter transactions which would balance the debt.
For example, if Ravina was also Max’s agent and Max needed to transfer Rs. 5000 to Raghu whose agent is Jagriti, this would balance out the Rs. 5000 owed to Ravina, since Raghu will be paid from Jagriti’s account.