Ripple – XRP


XRP is the native token of Ripple, a real-time gross settlement system, currency exchange and remittance network that is open to financial institutions worldwide. Ripple is built upon a distributed open source protocol, and supports a wide range of tokens, including tokens representing fiat currencies, cryptocurrencies, commodities, mobile minutes, and many other units of value.

Ripple was created by the U.S.-based tech company Ripple Labs Inc., and both the network and the cryptocurrency XRP were launched in 2012. In 2014, the February 2014 edition of MIT Technology Review named Ripple Labs as one of the year´s 50 Smartest Companies. It lauded the creation and development of the Ripple Protocol (RTXP) and the Ripple payment/exchange network.

According to Ripple Lab, their aim is to enable secure, instant,s and almost free global financial transactions of any size with no chargebacks.


Short facts about XRP

Original authors: Arthur Britto, David Schwartz, and Ryan Fugger

Developer: Ripple Labs Inc.

Written in: C++

Release: 2012


License: ISC license

Notable Features of Ripple and XRP

  • Ripple stands out from many other blochchain endevours due to its comitment to work with banks and other large financial institutions. To that end, XRP can act as a bridge currency, facilitating transactions between different fiat currencies.
  • XRP can process transactions within 3-5 seconds, making it one of the fastest cryptocurrencies.
  • XRP has minimal transaction fees compared to both traditional banking systems and to other cryptocurrencies.
  • The maximum supply of XRP is 100 billion coins, which were all created at once when the network was established.
  • Ripple validates accounts and balances instantly. As mentioned above, transactions are not reversable and there are no chargebacks.
  • The ledger for Ripple is a distributed database where information about all Ripple accounts is stored. It is managed by a network of independent servers, and those serves can in theory belong to anyone – including banks and market makers.

How Does XRP Work?

XRP, as a digital asset, is used on the RippleNet payment and exchange network. Traditional banking systems use SWIFT for international money transfers, which can be slow and costly. RippleNet provides an alternative by offering immediate, low-fee international transactions.

The process begins when a bank or financial institution decides to transfer a sum to another institution. The sending institution buys an equivalent amount of XRP with its currency. The XRP is then sent to the receiving institution, where it’s converted back into the receiver’s currency. This entire process happens within seconds, providing a more efficient solution for international transfers.

A scientific study made by researchers from Stanford University and Stockholm University has stated that running a server on Ripple is, in energy terms, comparable to running an email server.

History of Ripple

Creation and launch

Ripple was concieved by Jed McCaleb, and the first version was built by Arthur Britto and David Schwartz. The team then onboarded Ryan Fugger, and Fugger´s existing OpenCoin system would come to have a big impact on the development of Ripple.

In 2012, Ripple Labs Inc. launched the Ripple network and its native token XRP.

Working with banks and other big financial institutions

Ripple Labs have always been open with their intent to revolutionize the banking industry by working with banks rather than aim to replace them, and by 2018 over one hundred banks had signed up to work with Ripple. At that point, however, most of them were only using Ripple´s Xcurrent messagng technology, and was staying clear of the cryptocurrency XRP.

Ripple competes for market shares against the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which is still the dominating solution for international interbank transactions.

Examples of Legal Issues

In 2018, a class action suit was filed against Ripple Labs, alleging that they were selling unregistered tokens/securities.

In 2020, the U.S. Securities and Exchange Commission (SEC) initiated legal proceedings against Ripple Labs, its CEO and the co-founder Chris Larsen, alleging that they were selling unregistered securities.

In response to the actions of SEC, the cryptocurrency exchange Coinbase delisted XRP on December 28, 2020. On December 30, a class action suit was filed against Coinbase, alleging that Coinbase had sold XRP understanding that they were unregistered securities.

In July 2023, judge Analisa Torres issued a decision on motions for summary judgement, stating that the XRP token itself is not a security, although the manner in which it was sold could constitute the sale of a security. The ruling found that the institutional sales of XRP tokens constituted the unregistered offer and sale of investment contracts, while programmatic sales and other sales did not.

The Future of Ripple and XRP

In a world increasingly embracing digital financial solutions, Ripple offers an exciting proposition. With its unique features, such as faster transactions and lower fees, Ripple could revolutionize the financial industry. As the landscape continues to evolve, so too will the role and impact of this network.

While the future of any cryptocurrency is inherently unpredictable, the cryptocurrency XRP shows promising potential. Its affiliation with Ripple, the company’s mission to replace obsolete banking systems, and its growing acceptance among financial institutions worldwide all suggest a bright future.

One of the potential growth areas for XRP is Central Bank Digital Currencies (CBDCs). Ripple has expressed interest in using XRP Ledger for issuing CBDCs, which could offer a significant growth opportunity.