
The underlying scheme for the $\text{NewHope}$ algorithm was proposed by Jintai Ding, Xiang Xie and Xiaodong Lin [1] in 2012, then got improved by Peikert in 2014 [2]. Joppe W. Bos, Craig Costello, Michael Naehrig and Douglas Stebila [3] presented an implementation in 2015. The next major improvement by Erdem Alkim, Léo Ducas, Thomas Pöppelmann and Peter Schwabe [4] finally led to the $\text{NewHope}$ algorithm.
Let me first describe Ring-LWE in a short, rather informal manner. Assume you have a system of equations, with unknowns $s_0,s_1,\ldots,s_{n-1}$.
\begin{align*}
c_{0,0}s_0 + c_{0,1}s_1 + \ldots + c_{0,n-1}s_{n-1} & = b_0 \\
c_{1,0}s_0 + c_{1,1}s_1 + \ldots + c_{1,n-1}s_{n-1} & = b_1 \\
\ldots \\
c_{m-1,0}s_0 + c_{m-1,1}s_1 + \ldots + c_{m-1,n-1}s_{n-1} & = b_{m-1} \\
\end{align*} where usually $m > n$. Given this system of equations, pick $n$ equations and solve for $s_i$, which could be done using the folklore Gaussian elimination algorithm. For LWE, this system of equation is slightly changed. Instead of given a system of equations as above, you have:
\begin{align*}
c_{0,0}s_0 + c_{0,1}s_1 + \ldots + c_{0,n-1}s_{n-1} & \approx b_0 \\
c_{1,0}s_0 + c_{1,1}s_1 + \ldots + c_{1,n-1}s_{n-1} & \approx b_1 \\
\ldots \\
c_{m-1,0}s_0 + c_{m-1,1}s_1 + \ldots + c_{m-1,n-1}s_{n-1} & \approx b_{m-1} \\
\end{align*} You only know the approximate value of each equation. To be a little bit more precise, we can write:
\begin{align*}
c_{0,0}s_0 + c_{0,1}s_1 + \ldots + c_{0,n-1}s_{n-1} & = b_0 + e_0 \\
c_{1,0}s_0 + c_{1,1}s_1 + \ldots + c_{1,n-1}s_{n-1} & = b_1 + e_1 \\
\ldots \\
c_{m-1,0}s_0 + c_{m-1,1}s_1 + \ldots + c_{m-1,n-1}s_{n-1} & = b_{m-1} + e_{m-1} \\
\end{align*} where the $e_i$ are the small error terms that are sampled from a certain distribution. Solving this system of equations (of course with unknown $e_i$) is roughly speaking the Learning with Error problem. If you work over a ring, e.g. $\mathbb{Z}_q[x]/(f(x))$ you get Ring-LWE (some details are missing here, but this should illustrate the concept). The believe in its hardness stems from the fact Regev [6] proved that the LWE problem is as hard as to solve several worst-case lattice problems, which again are known to resist quantum computer attacks.
The question is: How can this be turned into key exchange protocol?