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What is Ripple (XRP) and How does it Work?

XRP is a leading cryptocurrency, currently ranked 3rd by coin market cap, right behind Bitcoin and Ethereum. It is different from most other cryptocurrencies.


nlike Bitcoin or Litecoin, XRP does not need to be mined and it is owned by a private company. XRP was spearheaded by Ripple Labs, an American technology company.

What is Ripple?

Ripple is both a payment protocol (digital payment network for financial transactions) and a cryptocurrency (XRP). The Ripple payment protocol was developed by Ripple Labs, Inc, formerly known as Opencoin before the name change in 2015.

The Ripple company started in 2004 as a financial service provider for secure payments. It is widely used by banks and money service businesses to provide a fast and seamless experience to send money globally.

The platform allows payments in any currency including bitcoin for a small fee of  $0.00001.

What is Ripple (XRP)?

Ripple (XRP) is one product under the Ripple umbrella. They are the token used by the Ripple Network to transfer money between different currencies. It was founded in 2012 by Jed Caleb and Chris Larsen.

XRP does not require mining to create new coins. Instead, the company created 100 billion pre-mined XRP tokens all at once, and they plan to gradually sell it off when needed. They sell off a maximum of 1 billion XRP a month, and there are currently 43 billion XRP tokens in circulation. Any unused XRP will be returned to an escrow account to prevent misuse. Ripple currently owns more than 60% of all XRP.

Eventhough XRP clains to run on an open-source decentralized platform, it it privately owned and it does not run on a PoW (proof or work) or PoS (proof of stake) blockchain. Therefore, XRP cannot be considered as a decentralized currency as all the power in the Ripple blockchain is heavily centralized in Ripple and the banks who are working as the nodes.

What is Ripple used for?

Ripple is basically a service for banks. It helps banks connect to each other via the network to move money fast and cheap.

Ripple can confirm money in 3.5 seconds and can process 1,000 transactions per second. Ripple operates the same speed as Visa.  Bitcoin in comparison, only processes 7  transactions a second.

Ripple VS XRP

Many people are confused between Ripple and XRP.  Ripple created XRP, but Ripple is not XRP. Ripple is a transaction protocol while XRP is an independent digital asset. According to official Ripple post, "Ripple is a software company that uses XRP and the XRP ledger in its product, xrapid. It does not control the digital asset or technology. Ripple does own 60 billion XRP (approximaately 55 billion is locked up in escrow)."

"The XRP ledger cannot be owned by any single entity, it exsits independent of any one person or business including Ripple. "

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Althought Ripple Labs want to seperate itself from the Ripple Payment Protocol and Ripple (XRP), Ripple Labs did create and is still the issuer of XRP.

Sidenote: Banks do not hold Ripple XRP. XRP is not needed for payments between banks and currencies. Ripple banks use xRapid and xCurrent (also owned under Ripple Labs). They are two main products for cross border payments.

How to buy XRP

Ripple (XRP) can be purchased on cryptocurrency exchanges. You can use our exchange tool to find a list of trusted exchanges to buy XRP with the payment method of your choice in your country.

XRP wallets

There are a variety of wallets to choose from when it comes to storing Ripple (XRP). We never recommend storing crypto assets on an online exchange as they are prone to hacks and security breaches.

Software and hardware wallets are always safer, hardware wallet being the ideal choice.

You can check out our cryptocurrency wallet listing for a wallet that suits your needs based on your operating system, price range, and security needs.

Ripple XRP Future

The Ripple Payment Protocol and Ripple's technologies in general is highly coveted by banks and the financial industry. Their fast and money saving global payment system attracts many investors and institutions.

Eventhough XRP is powered by Ripple company, XRP is not actually needed in the cross-border money payment system. Ripple does have financial interested for XRP to succeed as it funds their growth to ensure their technologies move forward.

The future of XRP can be promising with its intensive backing from the financial industry, but there are investors who fears the token will become stagnant once the industry stops investing in it.

Many countries are issuing their own National Bank Digital Currencies (NBDC) , and this may hurt XRP's relevence. Although Ripple denied the accusations, Ripple has been accused of paying cryptocurrency exchanges to list XRP.

No one can say for certain what the future of XRP will be, or if and when will XRP moon.

Marina L

Dog mom of two and nugget enthusiast. Reddit and video game addict. Co - founder of Vyntex Developments.

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