Ripple is a name for a digital currency (XRP) and an open payment network through which that currency is transferred. It is an open source distributed payment system that is still in beta. The goal behind the Ripple system, according to its website, is to enable people to break free from "walled gardens" of financial networks, such as credit cards, banks, PayPal and any other institution that limits access to them through fees and charges to currency exchanges and processing delays
According to OpenCoin, which is the company behind Ripple, the coin deals with the need to maintain the free flow of money. There is a company topic titled “Ripple and the Purpose of Money” which gives a brief history of money and its portability and indicates the frustration associated with banks and other institutions impeding the transfer of funds through transaction fees and delays in processing them. The goal of Ripple, as the site says, is to build a decentralized digital methodology for the currency prepared with Bitcoin and "be for money, as the Internet was for all other forms of information."
In many respects, yes. Like Bitcoin, the XRP unit of Ripple is a digital form of currency that is based on a mathematical formula and has a finite number of units that can ultimately be produced (or extracted). Both forms of currency can be transferred from account to account (person to person or P2P) without the need for any third party. Both forms provide digital security to protect against potential currency counterfeiting.
sees Ripple as a complement to Bitcoin, not a competitor to it. In fact, the site has a page dedicated to Ripple for bitcoin fans.
The Ripple network is designed to allow seamless transfer of any form of currency, be it dollars, euros, pounds, yen or bitcoins.
"Ripple will open many more bits for Bitcoin users and easier ways to link Bitcoin with the main financial world in the world," says Stephen Thomson, chief developer of Ripple Protocol and a supporter of Bitcoin.
In addition to giving Bitcoin other ways to connect with people who use other forms of currency, Ripple promises faster transactions and greater stability. As a distributed network, Ripple does not depend on a particular company to manage and secure a database of transactions. Consequently, there is no waiting for block confirmation, and transaction confirmations can pass through the network quickly.
Another advantage of using a person-to-person network is the absence of "the goal or focal point of failure in the system," according to Ripple's backers.
The company plans to eventually produce 100 billion ribs. Half of that ripple will be available for recycling, while the company plans to keep the other half.
Ripple does not charge transaction fees the way PayPal, banks or credit cards do. But it takes "a fraction of the ripple (equivalent to 1/1000 part of a cent)" from each transaction. This amount gets destroyed, not saved. The discount aims to insure against spamming the system with anyone who might try to place millions of transactions at once.