An Introduction To Ripple (XRP)

Ripple is a financial service–focused platform for sending and receiving payments. XRP is Ripple’s network’s native cryptocurrency and is often among the top 10 most significant digital currencies.

What is Ripple?

The firm behind XRP, known as Ripple, is a worldwide trading and settlement system and exchange network. In the words of Bitwave’s CEO Pat White: “Ripple was built from the ground up to effectively be a substitute for SWIFT (a prominent fund transfer system) or to substitute the transaction layer between large financial institutions alternatively.”

Because the network can so rapidly verify that a transaction went completed, it acts as a trusted third party between the parties involved. For illustration, Ripple may convert between different fiat currencies and several different cryptocurrencies, including Bitcoin.

The network takes an insignificant amount of the crypto XRP from each user’s account whenever they execute a transaction. El Lee, a board member of Onchain Custodian, has said, “The usual rate to execute payments on Ripple is pegged at 0.0001 XRP, which is modest compared to the enormous fees imposed by financial organizations for executing cross-border payments.”

History Of Ripple

Ripple was developed long after any other cryptographic systems had been developed. It was previously known under the brand name Ripplepay. Years before Satoshi Nakamoto published the earlier prototype of the Bitcoin system in 2009, software engineer Ryan Fugger built it in Vancouver, Canada, in 2004. Indeed, Ripplepay didn’t use blockchain technology, but its ultimate goal was to equip its customers with the means to safely send and receive payments from anywhere in the world.

As Satoshi Nakamoto said, “Ripple is noteworthy in it is the only comparable system that does anything with trust except consolidating it onto a central server.” In 2012, Ryan Fugger sold the protocol to Arthur Britto, Jed McCaleb and David Schwartz, who planned to utilize it as the basis for their own decentralized digital currency network. OpenCoin is the new company’s moniker.

In 2013, OpenCoin completed two rounds of angel investment to develop its innovative technology based on the Ripplepay’s source code which it used to construct a ledger payment system for financial institutions. The same year, former Mt.Gox CEO and creator Jed McCaleb departed the business to start Stellar and split Ripple into the Stellar Lumens network. He possessed a lot of XRP, the currency of the Ripple network since he helped build the company. McCaleb entered an agreement with Ripple, stating he would sell XRP in increments ovcr the years. His XRP has recently run to 0.

The OpenCoin corporation rebranded as Ripple Labs, Inc. in 2013 and released the Ripple Network’s source code under an open-source license. As of 2015, the firm goes under the shorter moniker “Ripple.” Ripple was legally authorized to do business in cryptocurrencies by the New York State Department of Financial Services in 2016.

Answering the Question, “What Is XRP?”

Simply put, XRP is a cryptocurrency that operates on the XRP System, a blockchain developed by Jed McCaleb, David Schwartz, and Arthur Britto. Ripple was founded by Britto and McCaleb, who created the crypto XRP for use in online financial transactions.

You may purchase XRP for use in Ripple transactions, as an investment, or as a means of exchanging it for other cryptocurrencies. Unlike other cryptocurrencies, XRP’s blockchain has a somewhat distinct function. In contrast, other cryptocurrencies’ transactional ledgers and validation methods are accessible to anybody who can swiftly solve complicated equations. However, the consensus of the ledger’s holders makes the transactions safe.

With its consensus architecture, the Ripple network for XRP tends to concentrate operations. At the same time, anybody may download its verification software. It retains distinct node listings that users can pick to validate their transactions depending on which users they believe are less likely to cheat.

Every three to six seconds, auditors update their transactional data to reflect the latest transactions and validate that they are all in sync with the other validators’ ledger accounts. Then, they will pause to investigate the cause of the discrepancy. It offers a network advantage over Bitcoin and similar cryptocurrencies by ensuring that transactions are validated safely and promptly.

“Bitcoin transaction verification may take hours and is often linked with significant transaction charges,” explains Lee. However, in “around three to five seconds,” XRP transactions are completed at a substantially cheaper rate.

How is XRP Mined?

Most blockchain-based cryptos employ a distributed verification technique called “mining.” It allows users to do business and offers the means through which new crypto is added to a network, often as compensation for the efforts of verifiers in maintaining the network. For instance, as more and more Bitcoin transactions are confirmed, a limited number of tokens (up to 21 million) are gradually distributed.

When XRP was “pre-mined” then on the XRP Ledger, over 100 billion units were regularly generated and distributed to the public. Since Ripple controls some of the circulating supply of XRP, it has a vested interest in seeing the cryptocurrency succeed. Therefore, an additional XRPs is kept in cold storage and sold regularly. Naturally, this has sparked worries that a flood of XRP might flood the market and devalue the currency since relative scarcity is a significant factor in determining the value of any given currency.

Tim Enneking, director of Digital Asset Management, “the firm has sought to lessen the uncertainty by using multiple methods.” This distinction between mine and pre-mining may relate to their dispute with the American Security and Exchange Regulation in 2020. (SEC).

Ripple Advantages

Swift resolution: Transaction confirmations are rapid. In most cases, they take between four and five seconds, far faster than the period it may take a bank to execute payments or the time frame it could take for a Bitcoin transaction to be validated. Swift currently transacts five trillion dollars daily.

Minimal cost to use our service: Currently, the price of an operation on the Ripple platform is just around 0.0001 XRP, or around one-hundredth of one cent.

Adaptable communication system: In addition to handling XRP-based trades, the Ripple network has many other uses. For example, other paper currencies and cryptos may also be used with it.

Made use of by central banks and financial organizations: Both small and large corporations are already deploying Ripple as a payment system. However, while major financial institutions like Santander, IndusInd Bank, including Bank of USA are already using this system, it has more widespread institutional market acceptance than other cryptocurrencies.

Ripple Disadvantages

The quantity of already mined XRP is substantial: So even while a good volume of the Ripple stock that isn’t now in circulation is locked up in escrow, it’s feasible that huge numbers may be released at inconvenient periods, which could affect the monetary value of XRP. This is a stark difference to Bitcoin mining and supply.

Legal action by the SEC against XRP: The SEC complained to Ripple sometime in December 2020, claiming that the firm should have declared XRP security since it can control when XRP is released. The corporation has dismissed the claim, although the court battle continues.

Methods for Implementing Ripple and XRP

Like every other form of digital money, XRP may be spent or invested in the same ways. In addition, the Ripple system can be used to process different transactions, such as currency trading.

Instead of going via banks or money changers to convert your Indian Rupees to Euros, you may utilize the Ripple system to alter your INR to XRP, then use those XRP to purchase Euros. Compared to the significant costs banks and money transmission firms may charge, this option may be quicker and cheaper.

Ripple Top Partners

Institutions of higher financial standing have joined RippleNet to provide instantaneous, fully traceable, and reliable international fund transfers. Ripple claims to work with over 300 financial institutions to offer instant, low-cost international transactions.

Bank of America

Since 2016, rumors have circulated that BOA was conducting secret tests of Ripple’s technology. It was only later that BOA leaders publicly acknowledged the collaboration. BOA worldwide banking chief Julie Harris recently said to the press; It’s all about our ability to interface with your existing systems, whether via custom-built tools or strategic alliances with other companies like Ripple and Swift. Our business relationships with these financial technology companies

American Express & Santander

On November 16th, 2017, American Express and Santander announced plans to facilitate U.S.-UK cross-border payments. At the time, the cryptocurrency boom was only getting started. Nevertheless, it was monumental news for the company’s investors. During trading that day, the price surged by 35%. After that, however, a ‘pump and dump’ occurred since the actual value of XRP still needed to be understood.

SBI Holdings

Formed in 2016, SBI holdings Inc. has been a reliable Ripple partner. To facilitate instantaneous cross-border transactions and remittances, SBI has formed agreements with Ripple and R3. Money Tap is their payment system, using XRP as a middleman.

Forty-seven financial institutions are collaborating on a pioneer”Ripple Solution” to develop a “Ripple Core” (RC) infrastructure. Transactions between financial institutions gets settled using this system. Payment confirmation and settlement for international transactions now take roughly three to five business days.


Due to its exclusive use of the vital XRP liquidity pool, MoneyGram is a key Ripple partner. As a result, MoneyGram’s stock price increased by 160% after the collaboration announcement in June 2019, whereas XRP rose just 10-12% during the following days.


Malaysian financial technology company MoneyMatch facilitates low-cost, same-day payments to international suppliers for SMEs in Malaysia. One of the principal payment and remittance service providers in the nation. In April 2018, it formed a partnership with Ripple and recently announced a 40% decrease in operational costs.

Standard Chartered Bank

The firm has been interested in Proof of Concept (PoC) payments utilizing Ripple’s technology since at least 2015. The company made history by issuing the first-ever invoice for trade financing using a blockchain-based distributed ledger. In addition, they made an essential investment in Ripple in 2016, acquiring a shareholder vote at Ripple.


Banking Division of MUFG Ripple’s collaboration with Bank of Tokyo is crucial to the success of international money transfers. It is also involved with the Global Payments Steering Group (GPSG), tasked with establishing guidelines and benchmarks for transactions using the Ripple network.


In addition to SCB, the DBS Bank of Singapore also uses Ripple for trade financing. A recent report from Ripple claims that the bank is ahead of the curve in incorporating FinTech developments. In India, for instance, DBS offers a nearly fully digital experience through their mobile-only bank, which AI drives.

Ripple Integrations


Using xCurrent, software developed by Ripple, banks may distinguish themselves by providing innovative cross-border payment services at a reduced overall settlement cost. With this solution, banks can be confident that it will function with their current risk, compliance, and data security infrastructures without any modifications. 

The installation of Ripple’s software occurs inside the bank’s infrastructure. It communicates with the bank’s systems through an API interface. It can consume existing payment message formats, reducing the integration time from months to weeks.


xRapid allows banks and other financial organizations to reduce their liquidity expenses while providing better customer service. Liquidity expenses are significant because making payments to developing markets often necessitates having foreign currency accounts pre-funded. xRapid is helpful since it reduces the need for liquid assets. 

xRapid is the first of its kind since it employs a digital asset ( known as XRP) to provide on-demand liquidity, reducing transaction fees and paving the way for instant payments in developing economies. With its business-oriented design, XRP offers financial institutions a dependable, scalable, and efficient liquidity alternative for processing international transactions.


Companies, payment services, and banks may all benefit from xVia since it provides a standardized interface for sending funds across different networks. In addition, with xVia’s straightforward API, users may make international payments with complete visibility into the progress of their payments and the ability to attach rich data, such as invoices, without needing additional software.

Ripple Bearish Case

The latest available data on XRP prices shows that the cryptocurrency has fallen in value in recent hours. After XRP’s 24 hr high of $0.5654, the cryptocurrency ran under stiff selling pressure. With the market falling, XRP’s value fell to $0.3639, a 12654% drop.

The coin’s market value dropped by 10.64% to $19,560,653,821, and the continuing lawsuit has the worldwide XRP online community worried that the Ripple vs. SEC case might go the way of the LBRY Inc. case.

If Ripple loses the lawsuit, the coin may face higher sell pressure. If victorious, the token could become the only cryptocurrency with regulatory clarity – a huge win. Considering Ripples focus on financial institutions, legal clarity is an absolute must.

Regulations On Ripple

In December 2020, SEC filed a complaint against the Ripple Labs, the parent firm behind the XRP cryptocurrency (XRP-USD). They stated that Ripple’s former and current senior executives had been trading XRP, which Ripple founders established in 2012, in an unregistered securities offering for $1.3 billion.

Unlike bitcoin, whose origin is unknown, and other significant cryptocurrencies registered outside America the SEC may sue Ripple Labs. Ripple claims that Ethereum, the second-largest crypto, is not different from XRP in terms of unregistered securities, so why does the SEC let them off the hook? Garry Gensler, SEC chairman, is avoiding this problem. Ripple further claims that the Commission has no authority over XRP tokens since trading occurs on foreign exchanges.

The SEC claims Ripple sold its XRP coin for “money,” meeting the Howey test’s “Investment of Money” requirement. This test defines security. The SEC also claims Ripple management knew XRP transactions and trading violated the Howey Test. As a result, the lawsuit plummeted XRP and made cryptocurrency holders the most significant victims, hurting investors whom the SEC intended to safeguard.

After the lawsuit, Coinbase and some other American exchanges delisted XRP. However, Ripple continued to concentrate on the Middle East and Asia while signing significant contracts and partnerships with over 100 financial companies, banks, and other enterprises globally.

Ripple Consensus Mechanism

Ripple does not use PoW or PoS like Bitcoin or Nxt. Instead, a consensus mechanism verifies account transactions and balances. In addition, the consensus prevents double-spending, improving system integrity.

Ripple users who begin several gateway transactions but transmit a similar $100 to the intermediary systems will likely have all transaction canceled asides the first one. Distributed nodes agree to the initial transaction: instant, five-second confirmations. The decentralized Ripple technology allows anybody to establish a node and authenticate transactions.

What Is The TPS of Ripple?

The number of transactions Ripple can process per second is relatively high compared to other digital currencies. Although Bitcoin can process three to six transactions per second, Ripple can process over 1,500. For any exchange to occur on the XRP Ledger, the XRP currency is required. With every XRP transaction, the currency gets depleted.

Ripple Real-World Use Cases

Micropayments: The XRP Ledger is used by programmers to create cutting-edge currency-centric applications in the video game, multimedia, and online monetization industries.

Cryptocurrency Wallets: The Ledger may be used to create digital wallets that can be used to transfer and receive XRP and other digital assets through interaction with multiple blockchains and the storage of personal and public passwords.

Exchanges: Creats a platform for buying and selling ETFs, stocks, and commodities in addition to cryptocurrency and blockchain-based tokens.

Stablecoins: Stablecoins built on the XRP Ledger may be issued by financial institutions using Issued Currencies. XRPL’s built-in DEX facilitates the smooth trading of digital assets between “issued assets,” such as stablecoins, and digital assets with no central authority or counterparty risk.

NFTs: Tokens that are not exchangible for goods or services are only one possible use of XRPL’s ability to issue IOUS representing any currency (NFTs).

DeFi: In place of conventional financial institutions, XRPL’s decentralized smart contract mechanisms will enable users to access a wide range of digital economic goods and services worldwide.

Cross Border Payments: Cross border payments, specifically between financial institutions, are notably time consuming and costly. When one bank in the US transacts with a bank in Asia, for example, it can take 1-2 weeks for the money to settle and cost 1-3% of the total transaction (often leading to tens of millions of dollars). Money in settlement can leave a hole in an institutions balance sheet, causing even more headache. XRP can do this in under five seconds and for less than 0.001% of the transaction, a MAJOR improvement on current systems.

How Ripple Impacts the Financial Industry

There are over 272 million international migrants, and it is difficult, time-consuming, and costly for them to transfer and receive money across borders. It is shifting thanks to Ripple and XRP. Financial institutions all across the globe have begun using the technology to get access to liquid funds for cross-border deals. They can reduce expenses and enhance services because of their unparalleled efficiency.

As a result, millions of individuals throughout the globe may now send and receive money across borders at lower costs and with more certainty. Ripple and the XRP Ledger upon which it runs are the best medium of exchange because they enable global money transfers to occur instantly, cheaply, and sustainably.


A persistent cloud also hangs over the Ripple ecosystem and its usage of XRP due to the presence of competitors. While the use and network externalities might be significant factors in pricing decisions, this only sometimes leads to increased costs. Each year, trillions of dollars change hands across borders, but it is still not yet determined what market cap XRP would need to serve the sector entirely.

The massive market Ripple is moving in too is the reason for outlandish looking price predictions like $500 or even $5,000 per coin. This is extremely unlikely and these prices are often pushed by influencers looking for a catchy title or caption. It is unclear how the XRP price would be impacted, even if the XRP ledger can replace SWIFT. That being said, with the ongoing court case, XRP may present one of the best asymmetric bets on the market.

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