What is Ripple Cryptocurrency (XRP): Explained

Ripple cryptocurrency concept

Ripple is one of the most widespread cryptocurrencies (3rd in terms of capitalization in August 2021). Despite controversy, the project still has many followers and this is easily explained. The project is not like other digital coins either in technology or concept. An overview of the XRP cryptocurrency will help you understand the intricacies of the coin and its purpose. Based on this, it will be easier to assess the pros and cons, to understand the feasibility of investing in a coin.

History of XRP

In early 2011, three developers, David Schwartz, Jed McCaleb and Arthur Britto, took up bitcoin, but noticed that digging was extravagant. They tried to create a sustainable value transfer system. Their first observations about high energy consumption and scalability issues that could hit bitcoin proved to be accurate. In 2019, Ripple estimates that BTC’s production consumed more energy than the whole of Portugal. Initial findings indicate that there will be problems if miners agree to receive more than 50% of the power. This risk remains for Bitcoin or Ethereum. Even in 2021, the problem persists, as mining capacity has been consolidated in China (until May 2021).

Ripple coins

A trio of developers have worked to create a distributed registry to circumvent these fundamental limitations of bitcoin. The code was originally called Ripple. The registry included the cryptocurrency XRP to follow the same naming convention as bitcoin. Originally, the name meant an open source project, a consensus book, a transaction protocol, a network, and a digital asset. As a result, the name Ripple became widespread. For clarity, the community started calling the coin XRP.

By June 2012, Schwartz, McCaleb, and Brito had completed the development of the XRP Ledger code. When it became operational, 80% of the coins were transferred to a new company that was involved in creating scenarios for the use of the digital asset. The company was originally called NewCoin, but was quickly renamed to OpenCoin.

Chris Larsen is the company’s CEO, Jed McCaleb is the creator and technical leader, David Schwartz is the chief cryptographer, and Arthur Brito is a consultant.

OpenCoin has set itself the goal of turning the global financial system upside down. Larsen never believed that blockchain technology should be used to bring down the current monetary paradigm. He believed that the most important innovations in history were based on great ideas that came before them, instead of replacing them.

ripple cryptocoins

In the first conversations with potential clients, the team was asked about the differences between the project and the company OpenCoin. When the community started calling the coin XRP, the leaders decided to rebrand it. That’s how Ripple Labs was born. A scenario has been created for using XRP Ledger and XRP to manage liquidity in cross-border payments.

The XRPL Foundation was founded on September 24, 2020. It is an independent non-profit organization that accelerates the development and adoption of the decentralized XRP Ledger system. The foundation received an initial donation of over $ 6.5 million from Coil, Ripple and Gatehub. The funds were used to fund the work of a growing number of creators and other members of the community.

At the end of 2020, the company faced an unexpected problem. The US Securities and Exchange Commission (SEC) launched an investigation and later brought the case to court. Representatives of the regulator insist that the nature of the asset refers to securities. If the SEC proves its position, the project will face heavy fines and will also be forced to report to regulators. As of August 2021, the situation is not finally resolved. It is hoped that everything will end well and Ripple will not be recognized as a valuable book.

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Characteristics of cryptocurrency

The main goal of the project was to form a chain of real-time direct asset transfers to provide a cheaper, transparent and secure alternative to existing transaction methods, such as SWIFT. That is, the cryptocurrency Ripple was created as a competitor to conventional systems.

What is XRP in simple words

It is a payment platform and currency exchange network that processes transactions between countries. The idea is the company to act as a trusted agent between the two parties to the deal. The network quickly confirms that the exchange went correctly. It is possible to convert coins into various fiat money and cryptocurrencies, as well as into commodities such as gold.

XRP is a coin that runs on XRP Ledger and the blockchain, created by Jed McCaleb, Arthur Brito and David Schwartz.

An asset can be purchased as an investment, exchanged for digital money or to finance online transactions.

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Ripple coin (XRP) can be exchanged for any currency or asset with a minimum fixed fee. This is a reliable platform with increased transparency that eliminates failed payments:

  • Provides digital security and protection.
  • Immediate payments – the money is received when customers need it.
  • The company has gateways needed mainly by financial institutions.
  • “Trust chains” are used to connect them.
  • Instead of digging, there is a consensus mechanism to confirm operations.
  • Several nodes that act as validators send and receive payments to users.
  • The platform is decentralized.
  • There is no body to make independent decisions, intervene in payments or appoint validators.
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Operating principle

So far, it is the only blockchain company with payment products for commercial use. XRP cryptocurrency allows you to gain liquidity while providing greater scalability compared to other virtual currencies.

The XRP Ledger system (XRPL) is fundamentally different from rugged blockchains such as Bitcoin and Ethereum. Consensus confirmation follows the principle of anti-growth, which increases reliability. This gives the system a built-in mechanism: when security cannot be guaranteed, XRPL blocks the operation.

The platform has shown over 99.999% reliability since launch. During that time, more than 58 million registers were closed.

The principle of the public blockchain is that each participant can confirm that each operation complies with the rules of the system. Transactions are open and everyone knows which ones are valid and which ones are not.

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Consensus is needed to solve the problem of double spending. This question arises when there are 2 or more ways to make progress. The protocol ensures that dishonest participants cannot mislead honest users by disagreeing on the state of the system.

In such a platform, the role of validators is to allow users to agree on the path of the promotion when there are 2 or more options. This approach eliminates double costs. The attackers have no way to deceive the participants, the same money will not be delivered in 2 different wallets.

Public blockchains do not have central bodies to dictate the rules of the system. Each participant chooses the ones he wants. However, customers who do not agree with the laws of the system will not be able to interact with each other. This creates difficulties and risks when changing the rules.

Validators help prevent inadvertent branching of the book. They coordinate changes in the rules of the system. However, the validator cannot use the law change server that is not specifically configured for acceptance. Approval of 80% of the quorum of participants for 2 consecutive weeks is required to take effect after making changes to the register.

the ripple coin

The validator consensus scheme provides a cheap, reliable, decentralized and fast solution to the problem of double spending. Its design also allows the network to be upgraded when participants agree to do so without the risk of accidental divergence.

Proof-of-Work, with its high power consumption and transaction costs, proved to be a technological dead end. Other consensus algorithms continue to be developed to allow decentralization at lower cost and risk. XRPL’s consensus algorithm continues to be refined to improve stability. The newly introduced Negative UNL feature improves the platform’s ability to tolerate interruptions.

This option improves the responsiveness of the XRPL network by tracking validators that are temporarily offline. With this information, servers can adjust quorum calculations to account for inactive members. Because shutting down a node for a short time is not a sign of unreliability, Negative UNL helps publishers deal with scenarios where the node does not run long enough to cause removal from UNL. This reflects his condition as a disabled person. The network works without relying on it.


Transaction speed

This cryptocurrency can process 1500 transactions per second with an average settlement time (confirmation) of the book of 3-5 seconds.


Characteristics of a digital asset:

Ripple was not intended to be a currency. The platform has been developed for banks and payment networks as a system for settlement, exchange and transfer.

All digital money has a register system that tracks the movement of each coin. Individual verifiers in the network (nodes) can confirm that the transaction is legitimate and that the recipient is the owner of the coins they are trying to use. This also applies to the fulfillment of the criteria for smart contracts or other automated payments based on blockchain.
Only 80% of the nodes require consent. This allows transfers to run more smoothly with less potential for delays. The unanimous consensus makes the blockchain secure.

ripple cryptocurrency

The company controls the entire volume of offers and periodically sells cryptocurrency on the market. In addition to the 45 billion coins in circulation, about 55% are now owned by Ripple Labs.

More than 300 financial institutions operate in the RippleNet network, including American Express and Santander. The first helps to make remittances cheaper, faster, more convenient for banks and their customers.

The main difference is that Ripple is still owned and operated by a private company. This contrasts the project with other cryptocurrency systems that are more public in terms of ownership and not controlled by 1 entity.

XRP technology

The backbone of XRP Ledger is a peer-to-peer network of always-running servers. They exchange transactions, participate in consensus and process transactions. Everything else in the ecosystem is directly or indirectly built on this peer-to-peer network.

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Programming libraries exist in higher-level software, where they are imported into code and contain access methods. The middleware gives indirect access to XRP Ledger data. Applications at this level often have their own data storage and processing. Programs and services interact with the registry at the user level. They also serve as a basis for applications and services of even higher value.

The peer-to-peer network underlying the system requires a reliable and efficient server to enforce consensus rules and process transactions. Ripple manages and publishes the reference implementation of this software with waves. The server is available under an open source license. Anyone can review and change it and republish it with a few restrictions.

Each instance of waves is synchronized to the same network (unless it is set up for testing, for example). There is access to all communications. The network server stores a complete copy of the status data of the entire XRP Ledger, as well as a snapshot of the transactions and a record of the changes made by those transactions. We can configure hubs to store more registers and participate in consensus as a validator.

ripple concept tech 1

The server provides users with a pulverized API for data retrieval, administration and transaction submission. No programming libraries are required to access XRP Ledger, as you can use HTTP or WebSocket for a direct connection. This facilitates access to the wavy API. Libraries transform data into forms that are easier to understand and recode.

RippleAPI for JavaScript is the oldest and well-maintained repository for accessing XRP Ledger. Many middleware services work with programming libraries. The services have access to the XRP Ledger API and also use their own interfaces. They provide an abstraction layer to facilitate the construction of higher-level applications with common functionality as a service.

Unlike libraries, which are created and closed with the program that imports them, middleware services usually run indefinitely and have their own databases (relational SQL or other) and configuration files. An example of such software is shown in the table:

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  • Data Intermediate. Intermediate service on XRP Ledger. The Data API collects and transforms information so that you can query over time, filter by data type, or perform information analysis.
  • XRP-API. This is another middleware service that manages secret keys and provides a more user-friendly RESTful interface to XRP Ledger for applications in any programming language.

At the top of the stack, programs and services allow users and devices to connect to the registry. At this level, exchanges host XRPs, and gateways issue other currencies to participate in the decentralized exchange. Wallets use user interfaces to buy or sell a coin. There are many other options, including additional services located even higher.

A good way for applications that are compatible with Ripple and many other assets is to use the Interledger protocol with local currency settlements.

Wave server software works in several modes depending on its configuration. For example, the main order is P2P. It monitors the peer-to-peer network, processes transactions and maintains the history of the book. This mode can be configured to perform any or all of the following roles:

ripple graphic 1 
  • Validator. Helps protect the network by participating in consensus.
  • API server. Provides access to an interface for reading general ledger data, submitting transactions and monitoring activity. As an option, this can be a full history server. It maintains a record of transactions and activities in a register.
  • Hub server. Transfers messages between other members of a peer-to-peer network.

Issuance of the coin

Initially, 100 billion coins were produced. In addition, no coins will be issued. Just over 46 billion units have been put into circulation. The rest are kept in the company’s balance sheet, although it is almost impossible to control their distribution.

There were accusations in the press related to the fact that the release of cryptocurrency into free circulation does not happen, as previously stated by the developers. In 2019, analysts at Coin Metrics found 200 million “extra” coins on the market, equivalent to $ 85 million. The original plan was for Ripple to sell no more than 1 billion coins a month. It is assumed that the number of coins will decrease when spent on each transaction.

cryptocoin ripple 


No physical resources are spent on digging, and the validation of transactions does not require costs. Therefore, the only thing the asset is secured by is demand. The limited number of coins in circulation protects this cryptocurrency from inflation. When registering new addresses, 20 coins are burned. It also has a deflationary effect.


Financial institutions and individuals can use Ripple to exchange assets. The Swift system is now used for this, based on the fact that banks have separate accounts in all the countries in which they operate.

Ripple offers an alternative with some advantages. One of them is the exchange of money with a low commission. There are many currencies that cannot be directly converted into another, so banks must use the US dollar as an intermediary. This leads to a double commission. Ripple may be an intermediary currency, but cheaper. It also provides fast international transactions. The average transaction time on the platform is 4 seconds, compared to about 10 minutes for BTC or a few days for traditional banking systems.

ripple coin dollar 

Xcurrent is a service that offers an alternative to the archaic Swift messaging system. The platform was created especially for banks and other financial institutions. The service solves the problem of cross-border payments and offers faster conditions.

In 2018, Ripple introduced the Xrapid mechanism, which allows payment service providers and banks to exchange currencies using the coin as an intermediate asset.

A coin, like other cryptocurrencies, can be used as a means of payment or an investment object.

How to get

Cryptocurrency is different from other digital money technologies. Due to its nature, the coin cannot be minted or pledged. Therefore, the only way to become an owner is to buy coins on one of the reliable exchanges or in numerous crypto exchanges.

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Purchase and exchange

The asset is registered on such reputable and well-known trading platforms as Binance, Huobi, Bithumb, Bitfinex, FTX, Kraken and many others. Since August 2021, the coin has been traded for over $ 5 billion a day. It can be purchased on fiat money exchanges or exchanged for other digital assets.

You can also get a coin in the crypto exchange. There are many sites on the web that provide conversion services. However, often these services have an exchange rate that is less attractive to consumers than on exchanges.

Ways to make money

Since these are coins that are issued in the final amount, there is no way to get them extra. Therefore, there are not many opportunities to make money with them. The only thing left is to buy coins and try to increase their number by trading.


The technology of the project is one of the most interesting among all cryptocurrencies. This allows us to hope for an increase in the exchange rate in the future. In this case, investing is an easy way to increase assets.

rising ripple 

It is important to understand that the process is designed for a long time. Although digital currencies are volatile and can rise or fall in a short time, you should not expect to make money fast. The investment implies a long-term approach. Therefore, it makes sense to buy coins with a view for at least 1-2 years ahead.


Active trading requires more than knowledge. Patience and discipline are essential. It is possible to make money through trading, but the key to success is developing a strategy and, most importantly, strict adherence to established rules. Emotions should not influence the decision to buy or sell. Knowledge of technical analysis techniques will facilitate trade. This will help you make decisions not on a whim, but relying on signals as a result of assessing the mood of other traders.

Liquidity pool

The high exchange rate and the liquidity rate contribute to the reputation of the trading platform. These parameters are influenced by the amount of resources available to the platform that it receives from users’ portfolios. The owner of virtual money has the right to use his savings to replenish the liquid pool and collect a commission for it. In this way, participants enable other traders to carry out operations and the exchange to gain popularity.

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Where to buy Ripple

The asset is widely distributed in trading platforms and exchangers. For example, crypto exchanges such as Binance, Huobi, Kraken and Bithumb offer the purchase and conversion of coins.

Most of Ripple’s sales volume is done at Binance.

What affects the cryptocurrency rate

To increase the value of the coins, a small amount is destroyed with each transaction. This means that over time, the number of coins available is steadily declining. Reducing supply aims to balance or increase demand, which potentially increases demand for cryptocurrencies. When the project started, 100 billion coins were created. Of these, 46 billion became available for purchase, and 20 billion were divided among the founders. A small amount is burned in each transaction, which makes the cryptocurrency even more limited.

There are many ways to use the coin. Examples: international money transfers, in-app purchases, etc. The presence of built-in uses and ease of acceptance make digital currency potentially more interesting to a wide audience.

crypto rate 

It is important that the number of applications continues to grow. For example, if Ripple is accepted by enough institutions, then many will feel the need to hold these coins.

The news background is very important. As soon as the SEC case was published, the price dropped sharply. When articles are written about a possible positive outcome of the case, people regain optimism and the value of the currency grows.

Where to store XRP cryptocurrency

Holding coins is allowed in the same way as other digital money. The owner can store them on the crypto exchange or transfer them to special wallets. The option to keep coins in the trading platform’s account is considered dangerous. Many exchanges have been hacked and there have been cases where consumer coins have been stolen. For long-term storage of digital assets it is better to choose special services (Ledger, Trezor, Trust Wallet, Metamask) or hardware wallets. The latter option is the most preferred, as the coins are stored on a separate medium without a network connection. Attackers do not gain access to virtual assets.

virtual ripple 

The best wallets for XRP

The beste wallets for XRP are MetaMask, CoinPayments, ZenGo, Coinbase and Matbea.

The future and prospects of Ripple

Ripple has a chance to become popular not only among banks and individuals, but also at the state level.

Following the SEC dispute, 100% of customers are outside the United States. Most are now in Southeast Asia, as regulators in Singapore and Thailand have classified the coin as a digital asset. Businesses are also thriving in the Middle East and North Africa, Saudi Arabia and India. According to Ripple, cross-border payments are billions of dollars in transactions every day.

There are many ways to use NFT when it comes to digital collectibles. The company works to ensure that its platform can support irreplaceable tokens. This can significantly expand the scope and cause an increase in the price of coins.

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China, Cambodia, the Bahamas and other countries have recently announced that the issue of creating digital currencies is being studied by their central banks. The Federal Reserve is partnering with the Massachusetts Institute of Technology to issue its own cryptocurrency. This will increase interest in independent projects, as the need for liquidity and settlements between other countries will remain.

Due to a dispute with the SEC, the company lost a partner in the payment platform MoneyGram. The company recently acquired a 40% stake in Malaysian financial services company Tranglo, which is still awaiting approval from government regulators.

Analyzes and forecasts

Global payment solutions are helping to change the way the financial activities of vulnerable people, small businesses and remittances are done. As the system is faster and cheaper than competitors in the decentralized world, the outlook looks good.

ripple virtual currency 

Analysts and forecasters have differing opinions about the value of this cryptocurrency in the future.

Ripple Coin News claims that in 10 years the price will rise to $ 30. Smartereum is more optimistic, predicting that the coin could reach the $ 250- $ 300 range by then.

Digitalcoin is conservative when it comes to price forecasting. They believe that the coin will grow to $ 1.93 only by 2028.

Forecasting the price of digital currencies is difficult due to their high volatility and the incompletely defined position of global central banks against them. If the SEC case is successfully resolved, it can be assumed that the price will return or exceed the April 2021 high of $ 1.96. In 2022, the coin could break its 2018 record of $ 3.24.

Should you buy XRP in 2022?

ripple coins 

Ripple domestic currency is an interesting and sought-after product with good prospects.

An important role is played by the complete lack of competition with other crypto projects.

The widespread use of the XRP coin has made it popular in various walks of life, from financial corporations to ordinary private consumers. Therefore, acquiring a virtual currency seems like a promising idea. You should monitor the change of exchange rate and try to buy the next download.

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What is the difference between XRP, XRP Ledger and Ripple?

The first is a digital asset born of XRP Ledger, which is an open source registry. The latter is a private company.

How many financial institutions have adopted cryptocurrency?

As of May 2018, MoneyGram, Western Union and 8 other major providers are paying for the public announcement of pilot experiments for coins in xRapid payment flows to provide liquidity for cross-border transfers. There is a growing number of financial institutions that are also interested in the number of coins.

Where to buy Ripple at a good price?

The best price as of May 12, 2022 on the Currency.com exchange.

How Safe is Ripple?

XRP Ledger is where transactions are performed and recorded. The book’s software is open source and runs continuously on a distributed network of servers managed by different organizations. This is a code base that actively develops and maintains the registry. The system is resilient and immune to a single point of damage due to decentralization, which makes it very secure.

Can the project freeze transactions?

No one has the right to freeze transactions, including currency.

Can transactions be viewed or tracked?

All transactions in XRP Ledger are available for public viewing.

Can Ripple create more coins?

Before the company was founded, 100 billion coins were issued. Coins are not mined and there will never be more of them.

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