Ripple and XRP – What they are and what you need to know

Here’s everything you need to know about Ripple/XRP, the bankers’ crypto.

Ripple is the company behind ‘XRP’ which is the crypto token that is used to run transactions on the digital payment platform called ‘RippleNet’.

RippleNet is a real-time gross settlement (RTGS) system that aims to enable instant monetary transactions around the world.

The XRP Ledger is open-source and is not based on blockchain, but rather it is a distributed ledger database.

Besides XRP, RippleNet is also a payment settlement system for international transfers and remittances, similar to more established systems such as SWIFT.

The back story

Ripple’s original brand name was Ripplepay and was founded by Ryan Fugger, a software developer in Vancouver, Canada. Later in 2012, Ripple was sold to Jed McCaleb, Arthur Britto, and David Schwartz and was rebrand as OpenCoin.

Following some dramatic turnaround events in 2013 the company was again renamed as Ripple Labs Inc, and later in 2015, its name was shortened to just Ripple.

How does it work?

RippleNet platform works by converting the currency of a sender into XRP and then sending it to the recipient who can then convert the XRP into a different fiat currency.

The system is already used by major banks and institutions to process international payments.

How does it differ from other cryptos?

The key difference between the Ripple and other cryptocurrencies is that while other digital currencies are based on the blockchain technology platform, Ripple uses a distributed consensus ledger using a network of validating servers and crypto tokens called XRP (sometimes referred to as Ripples).

Another major difference is that Ripple is still owned and operated by a private company, a direct contrast to the other cryptocurrency frameworks which are more public in ownership and are not controlled by a single entity. 

Where does it sit in the pecking order?

With a current market cap of US$28.29 billion, it is the sixth most valuable cryptocurrency in the world.

Currently, 46 billion XRP coins are in circulation while a majority of the 100 billion XRP is controlled by its promoting company.

How’s it performed recently?

XRP’s value has been witnessing a volatile movement this year, it rose sharply, more than eight folds, in the first fourth months of 2021 to hit a multi-year high of US$1.84 and then fell sharply.

In early May, it again witnessed a sharp movement, rising and falling in quick successions. Currently, it is trading at US$0.61.

What’s the future for the currency?

Industry experts are very bullish on XRP as more and more banks are showing interest in the RippleNet platform and XRP token that will allow them to save money on transactions.

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