Oct 30, 2025
Ripple focuses on fixing slow, expensive international payments by letting money move across borders in seconds instead of days. Its digital token XRP acts as the bridge, giving banks and payment providers a faster and cheaper way to send funds worldwide.
Kacper Tomasiak
Web & SEO Manager at Swapped.com
Crypto can feel overwhelming when you're just starting out, especially with so many different coins and technologies to understand. One name you've probably heard is Ripple, but what exactly is it? Unlike Bitcoin, which focuses on being digital money, Ripple takes a different approach by trying to make sending money across borders faster and cheaper.
Think of Ripple as the digital equivalent of a super-fast international wire transfer system. While your bank might take several days to send money overseas and charge hefty fees, Ripple can do the same thing in seconds for just a fraction of the cost. This simple idea has made it popular with banks and financial companies worldwide.
Understanding Ripple vs XRP
One of the most confusing things for beginners is understanding the difference between Ripple and XRP. Many people use these terms interchangeably, but they're actually two different things.
Ripple is the company that created the technology and payment network. Think of it like how Google is the company that made Gmail. XRP, on the other hand, is the actual cryptocurrency that runs on Ripple's network. It's like the fuel that makes the whole system work.
Ripple builds the system, and XRP is the coin used to send money fast across the network.
The Company Behind the Technology
Ripple Labs, founded in 2012, is a San Francisco-based company that focuses on making international payments faster and more efficient. They work directly with banks, payment providers, and other financial institutions to help them move money across borders more easily.
The company doesn't just create technology and walk away. They actively partner with major banks like Santander and American Express to implement their payment solutions. This business approach makes Ripple quite different from many other cryptocurrencies that operate without a central company driving adoption.
XRP as the Digital Asset
XRP is the cryptocurrency token that powers Ripple's payment network. When banks or individuals want to send money using Ripple's system, XRP can serve as a bridge currency. For example, if someone in the United States wants to send money to Japan, XRP can convert dollars to yen almost instantly, without needing to go through traditional banking correspondent relationships.
Unlike Bitcoin, which gets created through mining, all XRP tokens were created when the network launched. There are 100 billion XRP tokens in total, with Ripple holding a significant portion in escrow to ensure market stability.
How Ripple Works
Ripple's technology operates on something called the XRP Ledger, which is a decentralized network that processes transactions. But instead of using the energy-intensive mining process that Bitcoin uses, Ripple uses a consensus mechanism that's much faster and more environmentally friendly.
The Consensus Process
Every few seconds, the network's validators agree on which transactions are valid. Think of it like a group of trusted referees who quickly check and approve each transaction. This happens much faster than Bitcoin's process, which can take 10 minutes or more to confirm a single transaction.
This speed makes Ripple particularly useful for real-world payments. Banks can't wait 10 minutes to know if a payment went through, but they can definitely work with a system that confirms transactions in 3-5 seconds.
Bridge Currency Function
Here's where XRP becomes really useful. Traditional international payments often require multiple steps and currency conversions. Let's say you want to send money from your US bank account to someone in Thailand. Your bank would typically need to work with correspondent banks that handle Thai baht, which adds time and fees to the process.
With Ripple, your dollars can be instantly converted to XRP, sent across the network in seconds, and then converted to Thai baht on the other end. This eliminates the need for banks to maintain relationships with correspondent banks in every country they want to serve.
What Makes Ripple Different
Ripple stands out from other cryptocurrencies in several important ways. Understanding these differences helps explain why some people are excited about its potential while others remain skeptical.
Speed and Efficiency
While Bitcoin can handle about 7 transactions per second and Ethereum handles around 15, the XRP Ledger can process up to 1,500 transactions per second. This makes it much more practical for handling the volume of transactions that banks and payment companies need to process daily.
The energy efficiency is equally impressive. Bitcoin mining consumes as much electricity as some small countries, but XRP transactions use virtually no energy by comparison. This makes it appealing to institutions that are concerned about their environmental impact.
Bank Partnerships
Most cryptocurrencies aim to replace traditional banks, but Ripple takes the approach of working with them. This has led to partnerships with over 300 financial institutions worldwide, including major players like Bank of America and JPMorgan Chase.
These partnerships don't necessarily mean these banks are using XRP directly, but they are using Ripple's payment technology. This real-world adoption gives XRP a different value proposition compared to cryptocurrencies that exist primarily as speculative investments.
Regulatory Approach
Ripple has consistently worked to comply with financial regulations rather than trying to avoid them. The company regularly engages with regulators and government officials to ensure their technology can be used legally by banks and financial institutions.
This approach has led to some legal challenges, including an ongoing case with the Securities and Exchange Commission in the United States. However, it has also helped Ripple gain acceptance among traditional financial institutions that need regulatory clarity before adopting new technologies.
Bank transfers are slow and costly, while Ripple aims to send money quickly with fewer fees.
Real-World Uses of Ripple
Understanding how Ripple actually gets used in the real world helps clarify why it matters beyond just being another cryptocurrency to trade.
Cross-Border Payments
The most obvious use case is international money transfers. Companies like MoneyGram have partnered with Ripple to offer faster, cheaper remittances. Instead of waiting days for money to arrive and paying high fees, people can send money across borders in minutes for a fraction of the traditional cost.
This is particularly valuable for people who regularly send money to family members in other countries. Traditional services like Western Union can charge 5-10% in fees, while Ripple-powered services often charge less than 1%.
Banking Infrastructure
Some banks use Ripple's technology to improve their own payment systems, even if they're not using XRP directly. Ripple's software helps banks process payments more efficiently and reduces the time it takes to settle transactions between different financial institutions.
Central Bank Digital Currencies
Several countries are exploring or developing their own digital currencies, and some are considering using technology similar to what Ripple has developed. This shows how Ripple's approach to digital payments is influencing the broader financial industry.
How to Buy and Store XRP
Getting started with XRP is relatively straightforward, but you'll want to understand the process before diving in.
To buy Ripple, you'll need a platform that lets you buy cryptocurrencies. For instance, you can use a crypto on-ramp like Swapped.com, which supports several payment methods such as Apple Pay, Google Pay, credit cards, PayPal or bank transfer. Just choose the amount, the payment method, and your XRP will be delivered in minutes.
As for storing XRP, it's best to set up a digital wallet. You can either download an app or purchase a physical device known as a hardware wallet. Hardware wallets such as a Ledger or a Trezor add an extra layer of security by keeping your coins offline.
Understanding XRP's Unique Requirements
XRP has one unique requirement that beginners should know about. Every XRP wallet must maintain a minimum balance of 10 XRP, which gets permanently reserved and cannot be spent. This is called the "reserve requirement" and helps prevent spam on the network.
When you first buy XRP, make sure you purchase at least 15-20 XRP so you'll have some available to use after accounting for this reserve requirement.
Getting Started with Ripple
Whether you're interested in XRP as an investment or want to use it for payments, starting small is always wise. The crypto market can be volatile, and it's important to only invest money you can afford to lose.
Begin by learning more about how XRP works and following news about Ripple's partnerships and regulatory developments. This will help you make informed decisions about whether XRP fits your financial goals and risk tolerance.
Swapped.com makes it easy to get started with small purchases, so you can learn how XRP works without committing large amounts of money upfront. Remember, the goal isn't to get rich quick, but to understand how this technology might fit into the future of finance.
Understanding Ripple and XRP gives you insight into one possible future of money and payments. Whether that future comes to pass remains to be seen, but learning about these technologies helps you stay informed about the rapidly evolving world of digital finance.
Resources
If you're interested in diving deeper and expanding your knowledge of Ripple, here are some suggestions:
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