Ripple was founded in 2012 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. 

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.