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XRP Cryptocurrency is the native asset of the XRP ledger; a blockchain which David Schwartz, Arthur Britto, and Jed McCaleb have created in 2011.

In 2012, the protocol was officially set to release. Not long after that, Chris Larsen, the team’s new CEO, led the company’s creation of “OpenCoin”. Eventually, the company’s name was changed to “Ripple Labs Inc.” the following year before being shortened to “Ripple” for marketing reasons in 2015.

While XRP and Ripple are inextricably connected, it is essential to remember that they are two separate organizations. Ripple is a fintech firm that creates global payment solutions, and XRP is an independent digital currency that may be used for micro-transactions, remittances, and online payments. 



In 2012, the original creators pre-mined (produced before the project’s debut) 100 billion XRP coins. Ripple kept 80 billion tokens to finance future operations and development, while the remaining XRP was split among the founders.nRipple was founded by a group of American programmers who wanted to create secure payment options. The aim was to develop an international system of financial institutions and banks. The main thing you should know is that Ripple is both a platform and a digital currency.

Unlike bitcoin and other mined cryptocurrencies, XRP enters circulation whenever Ripple sells coins from its pre-mined stockpile on the secondary market.

Later in 2017, the firm placed 55 billion of its 80 billion XRP tokens into an escrow account, from which it may sell up to one billion tokens on the secondary market each month. This was done to enhance the regularity and transparency of Ripple’s XRP sales.

Unsold tokens are returned to escrow and re-distributed at a subsequent selling time after each selling period. Thirty-two billion XRP have been released from escrow during the past 32 months. However, a total of $25.8 billion has been refunded.

All in all, the escrow account had 47.8 billion XRP tokens as of April 8, 2021.

If you’re wondering where to purchase XRP, the major exchanges are currently Binance, FTX, OKEx, Huobi Global, and CoinTiger.

XRP’s Operation

Ripple created the XRP Cryptocurrency ledger to help banks all around the globe make cross-border payments more manageable. The ledger is a permission-less network of peer-to-peer servers that enables XRP activities.

The native token, XRP, adapted for use as a “bridge” between difficult-to-match fiat currencies. If there are no market makers on the network ready to exchange shekels for shillings, one may sell the former for XRP and then use it to purchase the latter.

The XRP ledger employs the Ripple Consensus Algorithm, which differs from proof-of-work and proof-of-stake methods in which network members are recognized and trusted by other network participants. In contrast to miners, they are not compensated for protecting the network. Once the validators agree, a new block – a “ledger version” – is created and verified. The content of the block is unchangeable. This enables network servers to keep a complete history of the ledger state.

Connected apps must use a JavaScript application programming interface to access the XRP ledger (API). This ledger is freely available to the public.

RippleNet, the company’s flagship service, uses XRP Cryptocurrency to provide on-demand liquidity (ODL). A worldwide payments network of financial institutions that were formerly three particular products before 2019: xCurrent (a real-time settlement solution), xRapid (a liquidity solution), and xVia (a payment API.)

ODL is essentially the act of converting one fiat currency, say, US dollars, for XRP tokens and then transferring those tokens to a receiving account, which swaps the XRP for their local fiat currency, say, Philippine pesos. Unlike conventional currencies, which may take days to transmit, XRP transactions often take 3 seconds or less. This is not only quicker, but it also lowers any exchange rate slippage considerably.


Transactions Using XRP

According to Ripple’s XRP white paper, the ledger can process over 1,500 transactions per second and settles payments in under five seconds. To cover transaction costs, a small amount of XRP was demolished — approximately ten drops (a unit of XRP) worth 0.00001 XRP. The transaction fee is likely to rise in tandem with the network’s load to disincentivize users from utilizing the grid during peak hours. The ledger executes and settles all XRP transactions.

The cryptocurrency lived in the shadow of its peers until 2017, when it saw a rapid increase in value by 34,000%,


Initially, the platform was built to execute fast and inexpensive transactions using an open-source protocol. The platform is used via RippleNet, which is a network that consists of institutional payment-providers, such as banks. The platform allows you to execute global payments efficiently and instantly using blockchain technology and at a low cost. In addition to this, the platform enables you to execute payments in Bitcoin, once again at a very low cost. Primarily, Ripple works against financial organizations that restrict the flow of money by applying fees such as high currency exchange charges, restrictions, and processing delays. The financial industry primarily benefits the global payments industry.

Ripple uses the Ripple Transaction Protocol, called RTXP. The protocol is based on a private blockchain that uses gateways, which allow companies, financial institutions, and governments to join Ripple’s network. Ripple has several different platforms called xCurrent, xVia, and XRapid. Out of them, only XRapid uses XRP.

The Bank Coin – XRP

What we hear about more often is Ripple’s cryptocurrency – XRP. Ripple calls XRP the “digital asset built for global payments” – essentially, the cryptocurrency is the token that is used to represent the transfer of funds across the network of Ripple. XRP acts as a mediator for both fiat currencies and cryptocurrencies. Ripple XRP was created to solve fiction in international payments and to source liquidity in real-time.

Ripple XRP is the world’s second-largest cryptocurrency after Ethereum. Its market capitalization is almost $13 billion, but all its tokens have already been created – there is a total supply of 100 billion tokens, of which 41 billion are in circulation, while the rest is held by Ripple Labs. Therefore, Ripple XRP cannot be mined, and there is no inflation. The value of XRP increases when banks use the platform – currently, the banks that support the currency include UBS, Axis Bank, Santander, Westpac, and more.

Ripple is very often called a ‘scam’ or ‘fraud’ in the media, and this mainly due to the fact that Ripple is not a fully decentralized currency. In fact, that is correct – XRP seems to be a hybrid between crypto and fiat currencies. It seems not to possess the traditional components of cryptocurrencies; for example, its blockchain is based on centralized blockchain, unlike that of Bitcoin.

XRP, just as Bitcoin works through a network of nodes that maintain a ledger that records transactions. The ledger is based on an open-source protocol. However, each transaction requires two parties: the regulated financial institution (i.e., bank) and the liquidity provider. Unlike other cryptocurrencies, Ripple has a closed blockchain. A single entity controls over 50% of XRP, and there are no native incentives for nodes. Therefore, XRP is almost entirely controlled by its mother, Ripple.

What is a decentralized cryptocurrency?

The bulls of Bitcoin often echo about its decentralization and its disconnection from classic financial institutions and global banking. The value of the currency does not depend on the central government but instead on miners, and anyone with the right PC and strong internet connection can essentially be a miner. But there have been plenty of judgment on what the concept of a ‘decentralized currency’ really is:

  • Fair distribution: Coins need to be fairly distributed – how can a currency be called decentralized if a single party has most of it? This is where people tend to judge Bitcoin since a very large portion of the cryptocurrency belongs to Bitcoin whales, who are individuals that own large sums of Bitcoin and can gear its value in any direction they wish. The same technically applies to XRP, but in this case, only Ripple is in charge.
  • Permission-free: Everybody should be able to participate. Essentially, cryptocurrencies should work on trust and work on a network with no permissions.
  • No central network – multipole entities operate the coin, and the blockchain is spread across multiple nodes. Ripple is owned and operated by a private company that is in full control of its blockchain.

The CEO of Ripple, Brad Garlington stated in an interview that “Ripple is not centralized. To be clear, if Ripple disappeared today, XRP would continue to function”. He mentioned that while Ripple does hold a significant role in the network of XRP, a decentralization strategy has been in process since the very inception of the cryptocurrency.

Is Ripple worth investing in?

As with every investment, there is a certain level of risk, and in the case of a volatile asset like cryptocurrencies, there is always more risk. XRP’s history had had a few significant price fluctuations, particularly in 2017, when ten new financial institutions joined the network of Ripple. In early 2018, the coin hit’s highest price –- $3.80/ 0.000263 BTC.

But it’s important to consider some central segments related to XRP – the creators of Ripple stated several times that they do not plan to raise additional capital. The company’s goal is to maintain a low marginal cost. Since Ripple currently holds 59% of the token’s supply, the company could easily inject large amounts into the market and, with that, manage to control and lower the price.

Whether you choose to invest in XRP or not, it’s worthwhile to speculate on cryptocurrencies, their price movements, and the effects of geopolitics on them.