Ripple is a network for sending money that was made to meet the needs of the financial services business. XRP is the native cryptocurrency of the Ripple network, and its market capitalization always puts it in the top 10 cryptocurrencies.

Ripple is the company behind XRP, which is a global payment settlement system and network for exchanging currencies.

Pat White, CEO of Bitwave, says that Ripple was made from the start to be a replacement for SWIFT, a major money transfer network, or to replace the settlement layer between major financial institutions.

It acts as a trusted middleman between two parties in a transaction because the network can quickly confirm that the exchange went through correctly. Ripple can be used to trade between a number of fiat currencies and cryptocurrencies, such as Bitcoin.

What's XRP?

XRP is a cryptocurrency that runs on the XRP Ledger, a blockchain that Jed McCaleb, Arthur Britto, and David Schwartz made. McCaleb and Britto would later start Ripple, which would use XRP to make transactions on the network easier.

You can invest in XRP, trade it for other cryptocurrencies, or use it to pay for transactions on the Ripple network.

Notably, XRP's blockchain works a bit differently than those of most other cryptocurrencies. Other cryptocurrencies let anyone who can quickly solve complex equations look at their transaction logs and check that they are correct. But transactions are safe because the majority of ledger holders must agree with the verification for them to be added.

The Ripple network for XRP sort of puts everything in one place and uses a consensus protocol: Even though anyone can download its validation software, it keeps unique node lists that users can choose from to verify their transactions based on which participants they think are least likely to try to scam them.

Every three to five seconds, as new transactions come in, the validators update their ledgers and make sure they match the other ledgers. If something doesn't match, they stop and try to figure out what went wrong. This means that transactions can be verified quickly and safely, which gives it an advantage over other cryptocurrencies like Bitcoin.

"Confirming a Bitcoin transaction can take many minutes or even hours, and it usually costs a lot," says Lee. "Transactions with XRP are confirmed in about four to five seconds and cost a lot less."