What is Ripple (XRP)?
Ripple and XRP are often confused, but they are not the same thing. Ripple is a company that creates global payment solutions, and XRP is a digital currency that anyone can use for various purposes, such as sending money abroad or making cross-border payments.
XRP is a cryptocurrency that runs on the XRP Ledger, a blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz. McCaleb and Britto would go on to found Ripple and use XRP to facilitate cross-border payments on their network, RippleNet. XRP was created in 2012 and premined at a total supply of 100 billion tokens.
XRP has many advantages, such as being fast, cheap, scalable, stable, green and decentralized. It is also one of the biggest cryptocurrencies in terms of market value.
However, XRP is an open-source and independent digital asset that can be used by anyone for various purposes, such as remittances, trading, or micropayments.
Ripple XRP – Real-time price
Here you can see the price of a XRP in real time today. This is how much a Ripple XRP is worth right now:
What is RipplePay?
Ripplepay was the original name of a money transfer platform launched by Ryan Fugger in 2004. It was a centralized system that allowed users to create their own money systems and issue their own currency. Ripplepay was later acquired by a company called OpenCoin, which was co-founded by Chris Larsen and Jed McCaleb in 2012. OpenCoin rebranded as Ripple and developed the XRP Ledger and XRP as a decentralized alternative to Ripplepay. Ripple is now a fintech company that provides crypto solutions for cross-border payments, liquidity management, and central bank digital currencies.
How does XRP work?
XRP works by running on the XRP Ledger, a distributed ledger system that uses a network of independently validating servers that compare transaction records. These servers can belong to anyone, including banks and payment providers. XRP transactions are secured by a consensus mechanism that does not require mining, unlike Bitcoin and other proof-of-work blockchains.
XRP can be used to transfer any type of currency, whether fiat or crypto, on the Ripple Network. It can also act as a bridge currency between different currencies or networks, enabling faster and cheaper cross-border payments. XRP is designed to be a digital asset for global payments, and it is issued by Ripple, the company behind the Ripple Network.
How XRP reaches consensus without mining
XRP reaches consensus without mining by using a consensus protocol based on the Federated Byzantine Agreement (FBA) model. Unlike other blockchains, the XRP Ledger uses a consensus protocol, in which designated servers called validators come to an agreement on the order and outcome of XRP transactions every 3-5 seconds. XRPL’s diverse list of validators helps ensure its long-term health and consensus among different market participants to secure the XRPL.
Validators of the XRP ledger
The validators of the XRP Ledger are servers that run the rippled program and participate in the consensus process. Validators can be run by anyone who wants to contribute to the network, but some validators are more trusted than others. The XRP Ledger has a system of Unique Node Lists (UNLs) that define which validators a given participant trusts to validate transactions. The default UNL is maintained by Ripple, the company behind XRP, and consists of 35 validators as of May 12, 2023. However, participants can choose their own UNL or modify the default one according to their preferences¹. You can see a list of validators and their UNL status on xrpscan.com or xrpl.org.
Advantages of using XRP over other cryptocurrencies
Some of the advantages of using XRP over other cryptocurrencies are:
- Speed: XRP transactions are confirmed in 3-5 seconds, while Bitcoin transactions may take hours or days.
- Cost: XRP transaction fees are $0.0002 per transaction on average, while Bitcoin transaction fees are much higher and variable.
- Scalability: The XRP Ledger can handle 1,500 transactions per second, while Bitcoin can handle only 7 transactions per second.
- Sustainability: The XRP Ledger is 61,000 times more energy-efficient than proof-of-work blockchains like Bitcoin, and it is carbon-neutral.
- Utility: XRP is used by many financial institutions and payment providers for cross-border payments, remittances, asset exchange, and settlement. It can also serve as a bridge currency between different currencies or networks.
Disadvantages of Ripple XRP
Ripple XRP is a cryptocurrency that has some advantages, such as fast and cheap cross-border payments, but also some disadvantages, such as:
- Centralization: XRP is not as decentralized as other cryptocurrencies, because it is controlled by Ripple, the company behind the Ripple Network. Ripple holds about 60% of the total supply of XRP and can release more coins into circulation at its discretion. This may affect the value and security of XRP, as well as its compliance with regulations.
- Regulation: XRP is facing legal challenges from the US Securities and Exchange Commission (SEC), which accuses Ripple of selling unregistered securities in the form of XRP tokens. This has caused some exchanges to delist or suspend XRP trading, and some investors to lose confidence in the cryptocurrency. The outcome of the lawsuit is uncertain and may have a significant impact on XRP’s future.
- Competition: XRP is not the only cryptocurrency that aims to facilitate global payments and remittances. There are other projects, such as Stellar, that offer similar or better solutions for cross-border transactions. XRP may face difficulties in gaining market share and adoption among users and institutions, especially if it fails to resolve its legal issues.
Where can I buy or sell XRP?
You can buy or sell XRP on various crypto exchanges that support the cryptocurrency. Some of the popular exchanges that offer XRP trading pairs are Bitstamp, Kraken, Binance, and KuCoin. Depending on the exchange, you can buy or sell XRP with fiat currencies (such as USD or EUR), stablecoins (such as USDT or USDC), or other cryptocurrencies (such as BTC or ETH). To buy or sell XRP, you need to create an account on the exchange of your choice, verify your identity, deposit funds, and place an order on the trading platform. You can also use a service like BestChange to buy BTC first and then exchange it for XRP on another platform. Alternatively, you can use a crypto wallet that supports XRP and allows you to buy or sell it directly from the app.