XRP Price (XRP)

The Ultimate Guide to Ripple (XRP)

Meta: Ripple and its native coin XRP have been a major factor in the crypto space. Learn everything about Ripple, its XRP Ledger, and more.

The world of cryptocurrency is a comprehensive, wide-spanning entity. Virtually everyone is familiar with names like Bitcoin and Ethereum, but a name that is changing the landscape within the space is called Ripple.

There is more to meet the eye when looking at Ripple than its native coin, XRP. The XRP Ledger, RippleNET, and the company as a whole are working to change the landscape when it comes to international banking transactions. Read on to find out more about the XRP Ledger, XRP coin, and how Ripple is changing the world of banking transactions.

What is Ripple?

Ripple – originally named Ripplepay – is a payment system based on the XRP Ledger, a blockchain ledger. It was originally founded in 2004, based out of San Francisco, CA. The company began focused on the improvement of legacy settlement systems with a primary focus on international transactions.

Ripple was initially designed to replace SWIFT, one of the largest money transfer networks in the world. RippleNET, the native network of Ripple, currently has the ability to facilitate exchanges between a number of currencies and not just fiat currencies. That includes cryptocurrencies like Bitcoin and also physical commodities like gold.

Perhaps the thing that makes Ripple so unique within the industry is that it is the first financial services network and platform to access and utilize cryptocurrency, as well as blockchain technology, to be used for enterprise. Utilizing its native cryptocurrency XRP as a bridge currency, it has worked to speed up and reduce the costs involved with international transactions.

Ripple offers real-time gross settlements between banks and other financial institutions. With additional features, Ripple aims to make banking across borders a lot easier, more affordable, and faster than existing settlement and transfer infrastructure. 

What is the XRP Ledger?

The core of the Ripple structure is the XRP Ledger. This ledger is a piece of blockchain technology that is meant to validate legitimate transactions between banks and other major financial institutions.

Though the two launched around the same time, the XRP Ledger actually technically predates the creation and foundation of Ripple. The Ledger was there, a platform that could verify and record transactions within the blockchain. Companies, developers, individuals, and institutions currently use the XRP Ledger, showing use cases while also improving tokenization, stablecoins, CBDCs, payments, and more.

The XRP Ledger is much different than Bitcoin, Ethereum, and other major crypto platforms. Where Bitcoin uses the Proof of Work protocol and Ethereum uses Proof of Stake – which focuses on mining or staking in order to validate transactions – the XRP Ledger does not.

Instead, the XRP Ledger uses a consensus protocol through its permissioned, trusted servers. If 80% of the nodes or servers deem a transaction to be valid, then the node can move forward with validating the transaction. If it is deemed untrustworthy, that node is then moved to a list of untrustworthy nodes. The XRP Ledger works to build a wide-ranging, valid list of trustworthy servers or nodes.

What Makes XRPL Unique?

Given the stature of the aforementioned Bitcoin and Ethereum, the ability of the XRP Ledger to stand out is what separates it from the major names in the industry. These are the factors that separate the XRP Ledger from the others in the market.

Low Cost

One of the driving factors behind the XRP Ledger is bringing down costs for financial institutions. Using XRP as the payment method for these transactions, fees are just a fraction of a penny per transaction. Costs are so inexpensive that it allows frequent use of the blockchain, creating proven use cases.

For financial institutions, like banks, costs are at the top of the list of things to navigate. By creating a tool that uses dirt-cheap transaction fees, these banking institutions have confidence that they can conduct transactions without having to worry about major costs involved.

High Performance

The sheer speed of the XRP Ledger is worth noting as well. Blockchain technology is meant to make transactions faster, and the XRP Ledger is capable of handling thousands of transactions in just a matter of seconds.

Speed is one of the selling points of cryptocurrencies, as a whole. With its ability to handle so many transactions in the blink of an eye, the XRP Ledger has shown itself to be a reliable source for conducting transactions.

Scalability

A major issue that platforms like these face is being able to scale up in real-time. As businesses grow, they must grow in a way that they can handle the increased traffic and demand without lapses in performance or speed. The XRP Ledger was created with scalability in mind while maintaining its lightning fast speeds.

Because of this, the XRP Ledger has become a fantastic option for creating use cases and developing applications at scale. Transactions on the Ledger are processed in an instant. Users are able to then perform transactions from around the world with virtually no delay, all the while paying fees that are a fraction of a penny, virtually nothing compared to traditional payment methods.

Public and Decentralized

Like other blockchains, everything is decentralized. The code is open source, meaning that anyone within the community has the ability to build on and maintain it. That transparency is a major aspect of the XRP Ledger.

By allowing transparency in the blockchain and the ability of users to make code changes, it ensures that those using the platform will work to maintain its value. Giving that incentive is something that keeps the community within that market together.

Community-Driven

With open source code comes community interaction. Users, validators, developers, and companies all work together to make it a point to make the XRP Ledger better. That constant interaction and development is what keeps the XRP Ledger strong.

Proven Reliability

A key to any blockchain is to provide reliability and consistency. Ripple has been around for more than 10 years, providing uninterrupted, error-free performance. Even more impressively, that blockchain has been able to handle more than 63 million ledgers without issue.

Individual users appreciate that level of reliability, but banks and other financial institutions put that reliability on another level. Knowing that transactions are safe, fast, and cheap checks all of the boxes that these businesses are looking for.

Aimed at the Financial Sector

The biggest names within the cryptocurrency space are often aimed at the public, appealing to individuals rather than enterprise, financial, etc. That is where the Ripple Ledger comes into the equation. Ripple, as a whole, is finance-facing, meaning that it deals with banks and other financial institutions.

The Ledger was specifically designed to become a go-to option for financial use cases and applications at scale. Businesses that seek blockchain solutions turn to Ripple and its XRP Ledger.

What is the Difference Between XRP, XRP Ledger, Ripple, and Ripple Network?

There are many terms thrown around when it comes to Ripple. Though you may feel yourself to be an expert on XRP price, there are other definitions to be aware of. Read on to learn more about not only XRP, but the XRP Ledger, Ripple as a whole, and the Ripple Network.

XRP

When talking about XRP, it is in reference to the native coin of Ripple. The total supply has been 100 billion XRP since its creation. XRP has been distributed to companies and individuals, with Ripple holding the largest stake. The coin has inherent value in the same way that any other cryptocurrency does.

Unlike Bitcoin and other cryptocurrencies, XRP is what is known as a pre-mined coin. This means that every one of the 100 billion tokens was created when Ripple was launched. XRP is the native coin of the XRP Ledger and is what is used to pay for the various transaction fees associated with the network.

XRP Ledger

The XRP Ledger is the blockchain technology on which the Ripple Network is based. It is often compared to the Proof of Work system that Bitcoin uses, but it doesn’t use staking or mining to validate transactions like Bitcoin does. Instead, it uses permissioned, trusted servers to create a consensus.

These servers, which are unique nodes, keep what is known as a unique node list. That list includes nodes that the network doesn’t consider trustworthy. Should 80% of the nodes deem a transaction to be valid, then it can proceed with the validation of the transaction itself.

The strength of Ripple lay in the XRP Ledger. It has proven itself to be a reliable platform, with more than 63 million ledgers validated in 10+ years of performance. That is the kind of reliability that users, banks, and financial institutions all seek.

Ripple

Many of these terms – Ripple, XRP, the XRP Ledger, etc. – sound like they are interchangeable. That said, there are some key differences between them. For instance, when mentioning Ripple, it is in reference to the company as a whole.

Ripple provides blockchain-based payments through its network. The company itself has undergone a number of changes to both the direction of the project and ownership. As a major name in the marketplace, it continues to buy out other crypto businesses like Fortress Trust and Metaco.

Ripple Network

The Ripple Network, also known as RippleNet, is yet another different arm of the company Ripple. RippleNet is a built-in payment network that banks and other financial institutions can utilize to simplify the process of making international payments and transfers.

The key feature of RippleNet is that it offers real-time gross settlements for a variety of financial institutions. The goal is to not only replace current cross-border payment systems, but to also make things faster, cheaper, and more accessible.

Who Created Ripple?

Before it became the XRP Ledger, Ripple was the brainchild of a company named Opencoin. It was founded in San Francisco, CA by Chris Larsen and Jed McCaleb before eventually being re-named to Ripple Labs, Inc.

The American technology company offers products featuring the enterprise blockchain including the XRP Ledger network and others. The current CEO is Brad Garlinghouse.

What is the Purpose of Ripple?

The ultimate goal of Ripple is to facilitate low-cost, secure, and lightning-fast international money transfers and currency exchanges. These services will be primarily for financial institutions and businesses through the leveraged use of the XRP cryptocurrency and XRP Ledger.

Bridge Currency. Like any other cryptocurrency platform, Ripple has its own native cryptocurrency called XRP. This is meant to be a bridge currency to facilitate the transfer of value between different financial institutions and currencies.

Payment Network. Ripple is not only a cryptocurrency, but a complete digital payment network and a protocol of its own. Ripple’s goal is to be efficient when it comes to global payments.

Target Audience. The target audience is slightly different than a major name like Bitcoin or Ethereum. Instead, Ripple focuses on serving financial institutions and banks, looking to replace current cross-border payment systems.

RippleNet. Ripple has its own built-in payment network known as RippleNet. This platform offers real-time gross settlements for banks and financial institutions. There are other features that make banking around the world faster, simpler, and more affordable thanks to a secure transfer infrastructure.

How Many XRP Coins are There in Circulation?

There is a total of 100 billion XRP coins to be mined. That said, not all XRP coins have been mined yet. It is estimated that there are somewhere around 58.2 billion XRP coins currently in circulation in the crypto market.

It is worth noting that XRP is pre-mined. This means that all tokens were created at the very beginning and when they have all been mined, there will be no more. Roughly 80 billion XRP coins were allocated to Ripple to build use cases, most notably as a global payment network.

Though there has been some debate of late about whether more XRP coins could be created, the answer remains the same. There can be no more than 100 billion XRP coins created, ensuring a set demand.

How is the XRP Ledger Network Secured?

The first comparisons of the XRP Ledger network are to Bitcoin’s Proof of Work system (or Ethereum’s Proof of Stake system). The XRP Ledger itself is a decentralized, open-source blockchain. It is the foundation of the entire XRP platform.

The XRP Ledger makes use of what is known as a unique consensus mechanism. That mechanism involves a full network of trusted validators that work to confirm all transactions. There is an 80% agreement required in order to validate transactions before they can be added to the ledger.

That requirement is a major part of what makes the XRP Ledger network so secure. A handful of rogue individuals cannot validate transactions, ensuring greater safety and reliability, especially compared to other blockchains.

Can Ripple Create More XRP?

Part of the inherent value of cryptocurrency assets is its rarity. Bitcoin remains valuable, in part, because there is a finite amount. When all of the coins have been mined, there will be no more distributed into the world. That rarity has an impact on demand and, ultimately, value.

Though there have been pundits claiming that more XRP can be created, that is not possible. The XRP supply is fixed at 100 billion and has been since it was created more than a decade ago. There are other reasons why that 100 billion number won’t change.

For starters, the genesis account – which held all XRP at first – is hardcoded into the ledger. Since the cryptographic keys are made available to the public, anyone can verify that the supply is what it was supposed to be. The design itself also makes it impossible to create more, ensuring that there isn’t a sudden influx into the marketplace.

Is Ripple Different from Bitcoin?

There can be some confusion surrounding Ripple, especially since it is another form of cryptocurrency. That said, there are key differences between it and the king of the space: Bitcoin. Those differences are crucial to be aware of.

XRP is considered to be not only faster, but cheaper, more environmentally friendly, and more scalable than its counterpart. Unlike Bitcoin, which was meant to store value and become a medium of exchange, XRP was designed to facilitate cross-border payments, becoming popular with many current investors.

Another major difference between the two is that Ripple’s XRP Ledger does not utilize mining. Platforms similar to Bitcoin – Litecoin, Ethereum, etc. – lean on the energy-intensive mining process as a means of providing a consensus approval on the blockchain.

The XRP Ledger, meanwhile, utilizes a consensus protocol. Not only is this safe, secure, and efficient, but it is much more energy conservative. Rather than going through mining, the XRP Ledger utilizes an independent network of validators. Those validators span a massive network comprised of individuals, groups, businesses, and more.

When the transaction has been initiated, the validators work to confirm it. If a supermajority of 80% is reached, then the transaction is validated and goes onto the blockchain. If it is deemed invalid, punishments are issued to the submitter, which can include fines and other punishments. For banks and payment providers that are seeking to streamline operations, the XRP Ledger is the perfect fit.

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