Ripple is one of the most popular cryptocurrency networks in the world. Its core business is to facilitate global money payments instantly with the least amount of fees.  With a market cap of $22.699 billion, the network ranks third, just behind Ethereum and Bitcoin.

How Ripple Works

Ripple is a real-time global money payment network built on the blockchain protocol. Often abbreviated as XRP, Ripple was launched in 2012 to improve on the services brought about by Bitcoin. For example, Ripple aimed to speed up the money payment method introduced by Bitcoin in 2009. Like Bitcoin, Ripple is built on a decentralized public ledger known as blockchain.

The blockchain technology was introduced in 2009 by Bitcoin’s pseudo-anonymous founder, Satoshi Nakamoto. It consists of transactions records encrypted using cryptography. This way, records on the blockchain cannot be altered. This same concept is extended to the Ripple money payment system, meaning that payments cannot be reversed.

Key Points about Ripple

  • The Ripple network was founded by the Ripple company
  • The Ripple coins are cryptocurrencies associated with the Ripple network
  • Ripple is most favorable to banks and has so far attracted more than 100 international banks
  • Ripple does not demand banks to make payments using Ripple coins, courtesy of the American Express partnership.

Key Benefits of Ripple


The undisputed biggest benefit of using the Ripple payment protocol is speed. Anyone can use Ripple to make a payment in less than 10 seconds, down from 2 days-the average times for completing a global money transfer. Banks and large financial companies are Ripple’s biggest users.

The first bank to embrace Ripple’s fast transfer system was Fidor Bank, a Germany based online bank. Fidor made the partnership in early 2014 before Kansas based CBW bank and New Jersey-based Cross River Bank embraced the Ripple protocol as well. Over the years, other bank adopted the payment protocol, including famous payment protocols such as Bank of America.

Low Fees

Ripple’s payment fees can be as low as 1%, making the payment protocol the most favorable for large financial institutions. Compared to alternatives like Swift payment, Ripple’s transaction fees are much lower. For example, the average payment fee via Swift in 2017 was 14%. With Ripple, the average fee is always less than 5%. Add that to the fact that Ripple’s payments are instantaneous and you will realize why banks love the network.

Throughout March 2018, Ripple’s transaction fee averaged $0.004. Compared to Bitcoin, whose transaction fee averaged $1.75 at the same period, Ripple is the more preferred network.

Low Volatility and Long-Term Value

Ripple is one of the few cryptocurrencies with intrinsic value: it is connected to banking institutions. With banks from all parts of the world adopting the Ripple network, it’s unlikely that Ripple will lose value in the future. Additionally, it’s unlikely that Ripple will experience the high volatility associated with many cryptocurrencies.

It is worth noting that all cryptocurrencies are subject to frequent changes in prices. But Ripple’s long-term value to banking institutions puts it in a better place of maintaining a stable value and accumulating market capitalization. Learn more about Ripple on: “Ripple 2018 | Complete Coin Guide: Predictions, Tools and More“.

Low Costs

For investors, having the ability to possess whole cryptocurrencies is important. Bitcoin has always had that barrier, whereby it is more expensive than what most people can afford. At the time of writing, Bitcoin is valued at $7959. In late December 2017, one Bitcoin was valued at $19,000, which means that even $1,000 was not enough to get you $0.1 of a Bitcoin. Of course, Bitcoin’s value plummeted by half in the following months, adding to the woes of many investors

Ripple is only valued at $0.485. An investor with $1,000 can purchase up to 485 whole Ripple coins. An investor with a much lower budget of $10 can still own 5 whole Ripple coins. Most beginner investors tend to prefer digital assets that are affordable. With Ripple’s value not likely to skyrocket, it remains a favorite investment coin.

Ripple Complements Bitcoin

The biggest reason why many cryptocurrencies fail is that they try too hard to topple Bitcoin. Startups copy the Bitcoin network and hope to attract adoption by improving speed and scalability. While the idea is sound, Bitcoin’s dominance is not likely to be eliminated in the coming years.

Ripple’s model is designed to complement Bitcoin’s protocol instead of competing against it. By enabling money payments at fractions of a minute and at low costs, Ripple targets large banking institutions. In fact, Ripple designed a protocol that does not emphasize on adopting the Ripple coins. This may be a problem for investors, but a benefit to its core target: banking institutions.

Cons of Ripple

Not Completely Open Blockchain

Ripple’s blockchain is relatively closed in nature.  The protocols work in such a way that banks and other financial institutions create an issuance about the amount of money they want to trade and only accept trading with other organizations they trust. The banks work together and rarely allow outsiders to create issuances on the blockchain. Ideally, normal traders don’t have access to the Ripple blockchain.

The Ripple Coin is not recommended by Founders

Ripple, the company, does not advise investors to buy Ripple coins for speculative reasons. Whereas almost every cryptocurrency issuer promotes the coin, the Ripple company advise people against this. This is a tremendous disadvantage to investors. Recently, the Ripple Company has been accused of pushing the Ripple payment protocol without pushing for adoption of the coin.

Lack of Scarcity

There are 39.022 billion Ripples in circulation at the time of writing. By contrast, there are only 16.7 million Bitcoins. Ripple coin has said in the past they have plans to cap the supply of coins at 100 billion coins, as to which point they will be too many coins. The high number of Ripple coins in the market means there is more supply for the coins than demand, and that affects the cryptocurrency’s value negatively.

In recent months, Ripple has not shown any effort of pushing for the adoption of Ripple coins. In fact, banks are no longer mandated to use Ripple coins when making transfers. And since regular traders cannot access the Ripple payment protocol, its value will stay low for long.


As a cryptocurrency investor, there is nothing better than conducting your own research. And with the varied opinions expressed throughout the Internet about Ripple, it’s important to research extensively before making any investment decision. However, no opinion erases the fact that Ripple is one of the favorite payment networks for banks and large financial institutions.

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