XRP Crypto Profile And Details

What is XRP?


XRP is a cryptocurrency designed as an alternative to Bitcoin, with a focus on facilitating trustless, instant and cheap cross-border payments. Like Bitcoin, XRP relies on a public ledger, called XRP Ledger, for storing transaction details.

However, the payment network built on the ledger does not utilize mining to validate and record new transactions. Instead, the XRP Ledger requires trusted validator nodes to reach consensus in record time and maintain the transaction ledger — roughly every 3 to 5 seconds. These trusted nodes are collectively called the Unique Node List or UNL.

Therefore, unlike Bitcoin and its proof-of-work consensus protocol, the XRP Ledger utilizes a consensus mechanism based on the Federated Byzantine Agreement (FBA) model.

Since the XRP ledger does not require mining, its native token, XRP, was premined at a very early stage of its development. A total of 100 billion XRPs were premined and launched in 2013. Today, over 46 billion of the total XRP supply is in circulation. Note that in addition to XRP it is possible to transact with other currencies in the Ripple ecosystem.

Before we dive into the history of this digital asset, it is important to know the difference between XRP, Ripple and RippleNet. As discussed earlier, XRP is the ecosystem’s native token. RippleNet, on the other hand, is the digital payment network that runs on the public distributed ledger, called XRP Ledger. Ripple is a for-profit company that controls the development and marketing of RippleNet.

The History of Ripple

The idea behind Ripple and its native token predates the crypto industry and Bitcoin itself. In 2004, John Fugger launched a peer-to-peer (P2P) financial network called RipplePay. The goal was to capitalize on the financial relations between network participants to eliminate the need for banks. In essence, if participant A trusts participant B, then B can act as a third-party whenever A wants to transact with another participant trusted by B. 
This concept would later serve as the cornerstone of the crypto model that Jed McCaleb — an early Bitcoin pioneer and founder of Mt. Gox exchange — proposed as an alternative to Bitcoin back in 2011. McCaleb concluded that Bitcoin mining was an excessively resource-hungry and expensive system that would eventually undermine the usefulness of Bitcoin. And so he approached Fugger with a plan to evolve RipplePay into a crypto network. In 2012, Fugger officially handed over RipplePay to McCaleb and Chris Larsen — a serial entrepreneur and today, Ripple’s executive chairman. 
Shortly after the handover, the team started building the first iteration of Ripple, called OpenCoin. Subsequently, the company’s name changed twice between 2012 and 2015. Notably, the project also underwent a series of cultural and systemic changes. The most significant was the switch to the Ripple Gateway system.

Recall that Ripple had initially opted for a peer-to-peer architecture. In the course of evolving their ideas, the team came to believe that reputable businesses, of a sufficient size, would be needed to ensure users’ trust. These businesses are what Ripple calls Ripple Gateways. This change in architecture marked a sharp shift towards a hybrid system that combines traditional banking structures with a peer-to-peer network. 

This combination would later prove to be pivotal to the project’s popularity in the traditional financial sector, as established financial institutions viewed it as a less unfamiliar route into engaging with the crypto and blockchain industry. 

Ripple, the for-profit company headed by Chris Larsen, soon began to secure high-profile partnerships and the number of financial institutions using RippleNet to facilitate cross-border payments began to steadily increase. 

Pros And Cons Of Ripple


Fast settlement. Transaction confirmations are incredibly fast. They generally take four to five seconds, compared to the days it may take banks to complete a wire transfer or the minutes or potentially hours it takes for Bitcoin transactions to be verified.
Very low fees. The cost to complete a transaction on the Ripple network is just 0.0001 XRP, a small fraction of a penny at current rates.
Versatile exchange network. The Ripple network not only processes transactions using XRP, but it can also be used for other fiat currencies, cryptocurrencies and commodities.
Used by large financial institutions. Large enterprises can also use Ripple as a transaction platform. Santandar, Axis Bank and Yes Bank are a few using this network, demonstrating it already has larger institutional market adoption than most cryptocurrencies.


Somewhat centralized. One of the reasons that cryptocurrencies became popular is that they were decentralized, taking control away from large banks and governments. The Ripple system can be somewhat centralized because of its default list of validators, which goes against this philosophy.
Large pre-mined XRP supply. Though most of the Ripple supply not held in circulation is stored in escrow, it’s possible large quantities may get introduced at inopportune times, which could impact XRP’s value.
Recent SEC action against XRP. In 2020, the SEC filed a lawsuit against Ripple, saying that since it can decide when to release XRP, the company should have registered it as a security. Until this gets resolved, it could slow down institutional use of this system. Several exchanges have also stopped listing XRP as a result.

What is ripple used for?

Banks and individuals are able to use ripple software to exchange assets. Currently, this is done using Swift, a system which relies on banks having separate accounts in all the countries they operate in.

Ripple offers an alternative with some benefits. For example, it could offer low commission currency exchange. At present, there are many currencies that can’t be directly converted to another, so banks need to use US dollars as a mediator. This results in double commission. Ripple could also be used as a mediator currency, but it is much cheaper than USD. It also offers much quicker international transactions than other, similar alternatives. The average transaction time on the ripple platform is four seconds, in comparison to around 10 minutes for bitcoin, or what can be up to a few days for traditional banking systems.

Xcurrent is ripple’s existing service, offering an alternative to what many see as Swift’s archaic messaging system. Xcurrent is aimed specifically at banks and other financial institutions to offer a quicker and more efficient solution to cross-border payments.

A recent innovation constantly linked with various financial institutions and service companies is Xrapid. The price of ripple rallied strongly at the end of September 2018, following rumours of links to this new service. Xrapid works by enabling payment providers and banks to connect different currencies around the world using XRP as a bridge asset, thus processing cross-border transactions faster than ever.

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