What is Ripple and what is XRP? (Update 2024)

About Ripple

Ripple, also known as Ripple Labs, is the company behind the development of the XRP Ledger. It focuses on providing banking solutions for traditional financial institutions.

Origin of Ripple

Ripple started with Ryan Fugger’s idea in 2004, named RipplePay. Later, Jed McCaleb, Arthur Britto, and David Schwartz took it over in 2012, transforming it into a network for digital currencies. Chris Larsen also played a key role in the development of XRPL.

Funding of Ripple

Ripple has raised more than $300 million since its inception, with various funding rounds, including a Series C in 2021 led by Mouro Capital.

Key People

• Jed McCaleb: Co-founder, was CTO at Ripple, later co-founder of Stellar.
• Chris Larsen: Co-founder and former CEO, now executive chairman.
• David Schwartz: CTO and Chief Cryptographer, one of the original architects of XRPL.
• Arthur Britto: Had an advisory role at Ripple.

What is the XRP Ledger?

The XRP Ledger, or XRPL, is a payment-focused platform that enables financial institutions and payment providers to offer innovative financial services, such as escrow services, digital crypto wallets, and other decentralized applications (DApps). The native cryptocurrency on this network is XRP. This means that the coin is used to perform actions on the network.

Features of the XRP Ledger

• Low transaction costs: XRPL offers low costs for transactions.
• High performance: It can process thousands of transactions per second.
• Native token XRP: This is a payment cryptocurrency that serves as a means for paying transaction fees on XRPL.

How does the XRP Ledger work?

• Consensus algorithm: XRPL uses a unique consensus mechanism, the “XRP Ledger Consensus Protocol”, which differs from Proof of Work or Proof of Stake. This provides a fast, energy-efficient way to validate transactions.
• Nodes and validators: The network backbone of XRPL consists of nodes (computers or servers that keep a copy of the blockchain) and validators (who play a more active role in validating transactions).
• Transaction agreement process: This consists of four steps:
  1. Proposal phase: Transactions are proposed to the network.
  2. Validation: Validators check the validity of transactions.
  3. Consensus: Validators agree on which transactions are valid.
  4. Finalization: Approved transactions are added to the ledger.

Innovations of XRPL

• Streamlined development: A developer-friendly environment for financial applications.
• Sustainability: Thanks to the energy-efficient consensus mechanism.
• Speed and costs: Low costs and high transaction speeds.

Problem Solving of XRPL

XRPL offers an alternative to the slow, expensive, and centralized financial system, allowing payments to be processed in seconds at low costs, both locally and internationally.

Why is XRP important?

• Use of XRPL’s DApps: XRP can be used in various financial DApps.
• Medium of exchange: As a peer-to-peer cryptocurrency.
• Transaction fee: To pay transaction fees on XRPL.
• Bridge currency: For faster and cheaper international payments.

Tokenomics of XRP

• Maximum Supply: 100 billion XRP, all premined in 2013.
• Distribution: 20% to the founding team, 80% to Ripple Labs.
• Escrow system: In 2017, Ripple placed 55 billion XRP in escrow to prevent market manipulation, with monthly release.

Where to buy XRP?

XRP can be purchased on a large number of exchanges, including Kraken, Bitvavo and Finst. Register directly on one of these exchanges to own the coin!