What is Ripple?
If you’ve been checking out the cryptocurrency market, you most probably have heard about XRP, which as of October 20, 2021, occupies CoinGecko’s top 10 cryptocurrencies by market capitalization. While a lot of people understandably think Ripple and XRP are interchangeable, they are actually not.
Ripple, on the one hand, can either refer to the company behind XRP or the blockchain itself. Meanwhile, XRP is Ripple’s native cryptocurrency which has certain uses within Ripple’s ecosystem.
History of Ripple
Before it became one of the biggest names in the cryptocurrency space that we know now, Ripple’s earlier iteration was called RipplePay, which was conceived by Ryan Fugger back in 2004. The core idea behind RipplePay was that of a peer-to-peer trust of financial relations that would eventually replace banks.
In 2012, just as Bitcoin was starting to gain ground, Jed McCaleb, who was the founder of the infamous Mt. Gox, approached Fugger with his own digital currency idea. As a result, Fugger handed over the reins and McCaleb, together with Chris Larsen, co-founded the OpenCoin corporation.
The XRP ledger went live in 2012, and the XRP token was launched in January 2013. By September 26, 2013, OpenCoin officially changed its name to Ripple Labs, Inc.
The Problem Ripple Seeks to Solve
Despite the massive technological advantages that we have seen over the last few years, from sending snail mails being replaced by emails to keeping in touch in real-time via social media, some areas still have drawbacks that persist today.
One good example of this is cross-border payments or sending money all around the world. While other services have dramatically cut down on their processing times and transaction fees, when it comes to money transfer, it is still plagued with the same cons that we have seen ever since – lengthy processing time, high transaction fees, and hard to access in some cases.
Ripple’s goal is to enable the world to move value just as fast, as easy, and as seamless as we move information today. To do this, they offer a range of services including xCurrent, which is used to process payments; xRapid, which is used to source liquidity; and xVia, which is used to send payments.
As part of their vision, Ripple wants to create an inclusive financial system by harnessing the power of blockchain technology, so that financial institutions can dramatically improve the speed, cost, and reliability of how people transact around the world.
For this reason, they aim to work with financial institutions to provide a more secure, transparent, efficient, and cheaper alternative to the current transfer systems being used by banks today such as the SWIFT payment system.
The Role of XRP in Ripple
Ripple’s native cryptocurrency, XRP, is designed to be used on the network to quickly transfer money between merchants and buyers who use different currencies, as well as within its suite of products – to ensure quick liquidity in xCurrent and xVia, and to act as a “bridge asset” for xRapid.
A bridge asset is simply an asset that business and financial institutions use to transfer between two different fiat currencies – somewhat similar to how the U.S. dollar is used as a bridge currency for international trade transactions and currency conversions.
XRP as a Cryptocurrency
Ripple and XRP have faced challenges over the years, including an ongoing litigation with the U.S. Securities and Exchange Commission (SEC) that was commenced last February 2018 to tackle whether or not XRP can be considered a security offering.
While this has definitely affected the price of XRP, it has impressively held its ground in the market, managing to maintain its spot within the top 10 and currently at the 6th spot in the CoinGecko charts as of writing.
On a more technical aspect, the Ripple blockchain can handle 15,000 XRP transactions per second, with typical settlements in 3.5 seconds. This is another impressive feat especially compared to some of the biggest names in the space such as Bitcoin, which can only handle 7 BTC transactions per second and a confirmation time of approximately one hour for a single transaction.
The Ripple network also does not use a proof-of-work system like Bitcoin or proof-of-stake mechanism like that of Cardano. Instead, Ripple relies on a consensus protocol to validate account balances and transactions within its network. This means Ripple selects a set of validators that will verify transactions on the network.
When it comes to maximum coin supply, XRP has a finite amount set at 100,000,000,000 XRP, and what sets XRP apart from other cryptocurrencies is that all of these coins were already pre-mined when it was first launched.
Ripple currently holds 55% of all XRP coins, aside from those that are already in circulation, which is currently at 46.8 billion XRP.
XRP by the Numbers
|Founders||Jed McCaleb, Arthur Britto, David Schwartz|
|Max Supply||100,000,000,000 XRP|
|2021 Price Growth||364.7%|
|All-Time High||$3.40 (as of January 7, 2018)|
|All-Time Low||$0.003 (as of May 22, 2014)|
|Market Cap||$53.4 billion|
How to Buy XRP
As XRP is one of the biggest cryptocurrencies in the world by market capitalization today, which is currently at $53.4 billion, it’s safe to say that buying the asset is relatively easy and accessible.
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