$XRP is a cryptocurrency created by Ripple Labs Inc. It was designed to facilitate international financial transactions by providing a faster and cheaper alternative to traditional payment systems, such as SWIFT. Here are some key things to know about XRP:
### 1. **How it works**
- XRP runs on a distributed ledger called **XRP Ledger**, which is a decentralized blockchain.
- Unlike Bitcoin, XRP does not rely on mining. All XRP tokens (100 billion) were pre-mined when it was created in 2012.
- Transactions on the XRP network are validated in seconds, with very low fees (a fraction of a cent).
### 2. **Use**
- XRP is primarily used by financial institutions for cross-border transfers. It serves as a bridge between different currencies, reducing costs and processing time.
- Ripple also offers software solutions (such as **RippleNet** and **On-Demand Liquidity**) that use XRP to provide instant liquidity.
### 3. **Pros**
- **Speed**: Transactions are confirmed in 3-5 seconds.
- **Low Cost**: Transaction fees are extremely low.
- **Scalability**: The XRP network can handle up to 1,500 transactions per second, much more than Bitcoin or Ethereum.
### 4. **Controversies**
- **Centralization**: Ripple Labs holds a large portion of the XRP in circulation, raising questions about decentralization.
- **Legal Issues**: In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, claiming that XRP was an unregistered security. This case had a significant impact on XRP's price and reputation.
