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What is Ripple? All you need to know about XRP

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What is Ripple? All you need to know about XRP

Although known most as a cryptocurrency, the XRP, Ripple offers much more than just that. It is a digital payment processing system, along with being a cryptocurrency that is XRP.

This means that unlike Bitcoin or other cryptos, Ripple is both a payment platform and a currency. The Ripple platform itself is an open source protocol that is designed to make fast and cheap direct transactions of all kinds. Ripple does not rely on the conventional consensus protocols like the proof of work implemented in Bitcoin. It is based on a shared database that makes consensus between validating servers and ensures transparency and correctness of transactions. These validating servers, called nodes, are other individuals or banks present in the network.


Ripple’s blockchain system is RippleNet, which is basically a network of institutional payment providers and banks. It makes up a platform whereby people from all over the world are able to exchange currencies, goods and other items direct and instantly. This platform allows consumers to make payments in any currency, fiat or crypto and charges close to nothing on transactions. The RippleNet platform is the actual use case and value proposition of the Ripple Network. Banks are able to use it to shift currencies and has more than 100 banks worldwide on the platform.

The XRP token

The XRP cryptocurrency was launched in 2016 by the Ripple Labs as cryptocurrencies began to skyrocket in that period. However, since then, Ripple has since then only played second fiddle to Bitcoin in terms of the cryptocurrency price market. It is placed as the second biggest cryptocurrency, but reads a meager $0.36 on coinmarketcap in terms of its price. There are a 100 billion XRP tokens issues by Ripple Labs, of which, 60% is owned by the company itself. However, they remain intent that this will be the total number of XRPs issued, ever.

How XRP is different

Unlike mainstream cryptocurrencies, Ripple is not based on blockchain. Then it may sound strange to call it a cryptocurrency because all others are formed on the blockchain and verify transactions over it through an implemented consensus protocol. But it is a digital token and it does verify and does everything that a cryptocurrency does. To take effect, Ripple has implemented the Ripple Protocol Consensus Algorithm (RPCA). Another difference to XRP is that it is not mined. Rather, it can be bought or exchanged via a cryptocurrency exchange. It carries additional advantage that it does not require computational power required for mining and is hence cheaper than mined coins.

Another notable way that XRP creates demands for itself is because of its transaction speeds. It has been long documented how Bitcoin transaction speeds are not optimized to the fullest and can take long. Ripple Labs claim a 4-second long transaction time which makes it a very handy solution. This transaction speed, however, comes at a cost. As XRP is not on a blockchain, it is based on a partly centralized model. It provides services to banks and payment solutions and hence, the ‘decentralized’ aspect of cryptocurrencies and blockchain is missing from it.

How to buy and store XRP

Like with conventional cryptocurrencies, XRP is stored on digital wallets. These are available on smartphones of both kinds, iOS and Android. There are also hardware wallets to store currencies offline, such as the ripple-supporting Ledger Nano S. XRP wallets usually require a minimum of 20 XRP for initial deposit.

Buying XRP is a little different to buying Bitcoin. BTC is listed at all major exchanges and can be traded or mined. XRP, however is listed on a few of the major crypto exchanges like Bitstamp, Coinbase and Binance. They too sell XRP in the form of exchange. This means that in order to acquire Ripple, one requires a verified account on the exchange and a Ripple wallet to where the exchanged XRP will be sent.


  • Ripple is an officially recognized asset to many banks, which gives it a notified status in the current finance system and does not become subjected to legislation issues and regulation checks. The major banks that support Ripple all over the world include Santander, Axis, Westpac, Union Credit, NBAD and UBS.
  • It is hoped that cryptocurrencies will become officially recognized in the future. To that respect, being already a part of the finance system and being in use with banks, the predicted situation would serve as a fortune for Ripple’s investors as it now will be traded as a unified currency instead of a processing platform.
  • All of XRP tokens have been issued, so there is no aspect of inflation involved or expected with it.


  • The most apparent drawback of the XRP token is its notion against the one thing cryptocurrencies stand for; decentralization. XRP tokens are already mined and Ripple Labs developers have jurisdiction over more than 60% of them and they release or take back at will. This emulates a rather centralized model, which is similar to mainstream banking.
  • The Ripple platform is an open source protocol and is susceptible to hacking. Although they have put a minimal transaction fee that is only applicable once a verified transaction takes place, the apparent delicacy to hacks cannot be counted off.
  • Not something that makes Ripple creators lose sleep, but every transaction is subjected to $0.00001 that disappears from the platform and cannot be replaced. This makes the universe $0.00001 poorer every time an XRP transaction takes place.


In conclusion, the real use case of Ripple is as the platform, not the token. While this hits its status as a cryptocurrency, it is still the second biggest cryptocurrency by market cap. If its price moves up to the $6 mark, it would overtake the BTC market cap. Its biggest achievement of 2018 was overtaking Ethereum as the second biggest token. Some experts predict bigger heights to come for XRP, while others suggest that is will drown with the expected recession of the coming years due to its rather natural closeness with the fiat. Its current price of near $0.4 and the declined year that 2018 has been for cryptos, it certainly does not read good for XRP.

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