The working of ripple is very simple. This example illustrates why Ripple is a game changer as a payment protocol.
Take this example to understand how ripple works.
Suppose Sam is from Jamaica. She needs to send some money to her friend, Ahmed, in Pakistan. Now, Sam works on the Australian Dollars (AUD), while Ahmed’s currency is Pakistani Rupee (PKR).
Now, if we look into the process of money transfer, we will see that the money will first convert into the USD. Here, USD is the common currency. At this step, we will incur fees. The remaining amount will be sent to Ahmed in his Pakistani bank.
Once more, a conversion will take place. This time USD will be converted into PKR and the system will charge you. This way, a transaction will complete and it will incur both time and high fees.
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