$XRP XRP is the currency created and backed by the company Ripple Labs. Its goal is to integrate with the traditional banking system and not replace or displace it, which implies a different technological development from that of other cryptocurrencies. For this reason, many people consider this project as a "Trojan horse" used by banks to enter this ecosystem. Whatever the position, it is undeniable that it is a different and novel idea, so we invite you to learn more about it in depth.

Origin of Ripple

XRP is a cryptocurrency that was created and launched in 2013 by a company called OpenLabs, now known as Ripple. The company is based in San Francisco, United States.

The origin of Ripple dates back to 2004, 4 years before Satoshi Nakamoto published the Bitcoin white paper. At that time, Ryan Fugger sought to create a system that would allow people to create their own money in a decentralized way, putting the power in their hands. That is why he created the first version of the system, called RipplePay.com. In 2011, Jed McCaleb was developing a system to verify transactions different from Bitcoin’s, in which the consensus of all network members was used instead of mining. In 2012, Jed joined Chris Larsen and presented this project to Fugger, who granted them the mandate and they founded OpenCoin that same year.

A year later, in 2013, they created XRP. In 2015, they changed their name from Ripple Labs Inc. to Ripple, a name they have kept to this day.

Characteristics of the digital currency Ripple

It does not operate on a blockchain: the validation of transactions is managed by Ripple under its own consensus protocol.

Validation is very fast: operations are processed and validated in about 4 seconds.

It is very scalable: processes 1500 transactions per second.

What is XRP for?

The XRP currency serves primarily to make transactions with very low fees, to the point of being considered as an alternative to the dollar. It is for this reason that it is largely used to make international transfers, as processing payments takes no more than 4 seconds.

A distinctive feature of XRP is that it has become a payment ecosystem that offers its services to banking entities so that they can issue their own tokens and interact with different payment networks.

How does Ripple work?

Ripple is a system that operates on independent computers around the world. Their function is to monitor transactions made and maintain a record. It is considered decentralized for this same reason: this record is not in a central location.

What differentiates XRP is its use by banks, which can make transactions to other registered financial institutions in a novel and much more agile way. Additionally, the novelty lies in the fact that they can do so to banks around the world, which is not always possible because banks are often not connected to each other. This system avoids the money passing through a network of banks with their associated fees.

Advantages and disadvantages of the XRP cryptocurrency

This new way of transmitting value has many benefits for users and institutions. It is a very interesting idea and undoubtedly different from the rest of the cryptocurrencies. Let’s review its advantages and disadvantages.

Advantages of Ripple

The speed of transactions is the main advantage of this cryptocurrency. It can confirm transactions in less than 4 seconds, far surpassing many options in the market. It can process around 1500 transactions per second, a huge difference compared to the 8 that the Bitcoin network can process.

The fees are also a great advantage of the network. They allow sending and receiving at a very low cost, as well as exchanging XRP for any currency in the world and even different assets like gold. Moreover, it allows users and institutions to create their own cryptocurrencies on the platform.

Disadvantages of Ripple

The main disadvantage and also the main criticism of XRP is its high centralization. Beyond the fact that the processing of transactions does not occur in a single place, which allows us to say that it is decentralized in that aspect, it is the same company that can decide how many coins are launched to the market and when, since all tokens have been “mined” from the beginning.

As mentioned, while validations occur in a decentralized environment, it is the same company that performs these validations and sets the rules of the network. These reasons are what lead many detractors to call it the “Trojan horse” that banks use to enter the cryptocurrency ecosystem.

What will be the future of Ripple?

As we mentioned earlier, this cryptocurrency has certain particularities that make it different from the others, so the analysis of its future will depend on other factors.

Since 2015, Ripple has faced various issues with U.S. justice. The first problem arose that year when the Financial Crimes Enforcement Network (FinCEN) fined the company for operating as a money services business without being registered. After other "minor" legal encounters, on December 22, 2020, a lawsuit was filed by the U.S. Securities and Exchange Commission accusing Ripple and its executives of violating investor protection laws. For this reason, experts believe that the future of XRP and Ripple will depend on the ruling of this body in this case. According to these experts, if Ripple manages to come out favorably from this situation, it could be further revalued and even go public.

Beyond legal matters, XRP is one of the currencies that has gained the most value in 2021, starting the year at a value of $0.22 and reaching a value of $1.83 per token. While it is a huge evolution, we must consider that its all-time high is $3.37. The future projection can be positive if we take into account this growth in 2021, but this value could increase even more if the ruling of the U.S. Securities and Exchange Commission is positive for the company.

Ripple - Frequently Asked Questions

How much could XRP rise?

If the ruling of the U.S. Securities and Exchange Commission is favorable for Ripple, its value could increase even more. We must consider that its increase in 2021 was very large, approximately 730%.

How many XRP are there?

There are 100,000,000,000 XRP that have already been created. Let's remember that the issuance is controlled by Ripple, so there are currently around 48,140,000,000 on the market, representing almost 50% of the total.

Who is behind Ripple?

The company that controls and issues the cryptocurrency known as XRP is called Ripple. The founders of the company are Chris Larsen and Jed McCaleb, and its current CEO is Brad Garlinghouse.

How much did XRP cost when it launched?

In 2012, XRP was listed on the various exchanges around the world at a price of $0.1 per token. That price dropped in the following years until its resurgence in 2014.

When was Ripple created?

The central idea of the company was conceived in 2004, although the company itself was created in September 2012 under the name OpenCoin.