● Beginner Coin Highlight

Coin Highlight: Ripple (XRP)

5 minutes 2 years ago


Operating as both a cryptocurrency and a digital payment network, Ripple was formed in 2012 by co-founders Chris Larsen and Jed McCaleb. Originally known as “OpenCoin”, changing to Ripple in 2013, the company’s aim is to operate as an intermediary payment settlement and remittance service. Operating much like the SWIFT financial system commonly used by banks when sending funds internationally. Ripple uses its native token XRP and their decentralised network to serve as an intermediate process between two currencies or networks.


While traditional financial intermediaries like the Society for Worldwide Interbank Financial Telecommunication (SWIFT) have dominated the global financial market, payments via this method can take up to 1-4 days to complete. Powered by blockchain technology, Ripple is able to settle XRP transactions in 3-5 seconds. Furthermore, payments systems like SWIFT are only able to settle fiat currencies, Ripple does not discriminate between fiat or crypto currencies. Whether sending Yen or Dollars, or Bitcon to Cardano, XRP is able to function as a bridge token between any two currencies.


Unlike Bitcoin’s blockchain, which uses a proof-of-work (PoW) algorithm, and Ethereum’s uses proof-of-stake (PoS). The XRP Ledger (XRPL) utilises a Consensus Protocol to validate account balances and perform transactions. Allowing for far more efficient confirmations. ‘Consensus’ refers to the fact that all of the nodes are in agreement with each other. If you would like to know more about Consensus algorithms you can read our article on the topic here. The XRP ledger is supported and validated by independent members. Every ledger contains information and data tying it to the block that preceded it in the chain.

Under the hood:

Ripple’s protocol consensus algorithm recommends users with a list of trusted participants to authorise and validate transactions, also known as the Unique Node List (UNL). Each server contains a set of trusted nodes that are voted on by other members of the UNL, ensuring that each node is trusted not to conduct fraudulent activity.

Most blockchain-based cryptocurrencies will distribute coins by the process of mining. However, XRP tokens are “pre-mined”. Upon launch, 100 billion XRP were released by the company with 60% of the total coins still held in escrow. They are able to release up to 1 billion tokens per month, however the released amount is usually much less than the limit. This allows the supply to steadily increase without hyperinflating the market and crashing prices.


In their bid to provide a solution to global payments the Ripple ecosystem offers a number of products, with the two most popular being xCurrent and xRapid. xCurrent is used by banks to enable operations between different ledgers and networks. While xRapid is a liquidity solution for banks, where XRP is used as a bridge between two different currencies. The Ripple ecosystem is currently being used by over 300 financial institutions, including American Express and Santander.

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