They are currently designed as almost fixed rate bearer token for block chain ledger services. All the ledger contract timeout, at which point the ripple bearer tokens are traded back to some cash, the Ripple coin having a lifetime congruent with the transaction interval. Ripple is a tick tock ledger step service.
The pit boss risk is as low as the transaction times, about a tenth of a second. The ledger proof is consensus, a consortia of big banks and institutions run the miner pool.
Why the coin?, a utility, and little more. No one is packing sphere with ripple coin, well, not much of a sphere.
It seems the Ripple board runs coin issuance like a stock, committing legally to restrictions and escrow, liable in court. Ripple is competing with Swift, as does Bitcoin. Ripple labs is a good company, for what it does.
Ripple can;t handle congestion. When Ripple or Swift hit turbulence, the member banks take a taxi and visit Janet. When Bitcoin hits turbulence, fees rise.
Ripple, thus, imposes a time clock. As the auto pits become widely deployed, the trading bots will trade, even that short timeout on Ripple's coin. Some pits will offer the Ripple consortia the opportunity to loan out their Ripple, out of the Ripple ledger and into a Redneck trading at its most naked.
But Ripple can legally change their issuance, with enough warning to its consortia, and make the Ripple coin into a full bearer digital note with no real timeout. Then its consortia members can trade it raw, against any of the registered digital securities, including other bearer notes.
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