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What is XRP?
XRP is the native token of the XRP Ledger, a blockchain designed to move value across borders quickly and with predictable final settlement.
Category | Payment network and enterprise solutions token |
|---|---|
Launch year | 2013 |
Date added | 2013-08-04 |
Consensus mechanism | Federated consensus with trusted validators reaching agreement |
Max supply | 100,000,000,000 |
Circulating supply | 61,569,680,267 |
Main use case | Cross border settlement and network activity on the XRP Ledger |
Platform | BNB (BNB) |
Website | https://xrpl.org/ |
Crypto data and labels can change as networks evolve and markets move. If you are making important decisions, double check key facts and dates in the latest sources.
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What is XRP (XRP)?
XRP is one of the largest cryptocurrencies by market capitalization and also known by its coin name Ripple. Ripple released in 2012 and has since gained popularity among both cryptocurrency enthusiasts and experts. It has been described as highly innovative, even compared to other projects. Companies and institutions such as Google and American Express have actively partnered with Ripple.
How can I use XRP?
One of the main functions of XRP is that of a bridge currency. It is often used when two, often rare currencies cannot be directly exchanged at that given moment. Because of its bridge function, XRP valuation can be influenced by fluctuations in the value of the USD, BTC, JPY, and EUR, among others. Although extensively used by large corporations and banks for various goals, Ripple can also simply be used to pay for products and services, much like Bitcoin. An increasing number of companies worldwide accept payments made with XRP.
Who founded XRP?
Ripple was invented by Ripple Labs Inc., an American technology company. The early version of the coin was invented by Ryan Fugger in 2004, before Ripple Labs developed Ripple into its current form in 2012. Ripple Labs still owns a large portion of all coins available, although an increasing percentage is becoming available to the public. Through various rounds, Ripple Labs has received over 100 million USD from investors, including Google, Accenture, Standard Chartered, and CME Group.
XRP vs. other cryptocurrencies
Although in principle Ripple has many similarities to Bitcoin and Ethereum, the technology Ripple relies on is vastly different. For instance, Ripple is not created by mining, which is the case with most cryptocurrencies. Instead, the coins are built directly into the Ripple protocol and released over time. Another difference is Ripple‘s extremely fast confirmation time for transactions. Whereas it takes about 10 minutes for a Bitcoin transaction to be confirmed, this happens in just a few seconds with Ripple. Furthermore, the transaction fee paid with Ripple is not collected by anyone, but is destroyed instead. This means Ripple will become increasingly rare. This aspect of Ripple is also being used by many large companies and banks as a countermeasure to spam transactions, where malignant traders create countless transactions to flood a network. Lastly, Ripple is relatively centralized compared to most cryptocurrencies, with Ripple Labs influencing the coin‘s ecosystem. However, Ripple is designed to keep existing even if Ripple Labs dissolves.
What does the future hold for XRP?
Many industry-leading companies certainly think so, and so do we. Ripple has often been named as one of the main rivals to take the leading position in the cryptocurrency market from Bitcoin. Because of Ripple‘s fast transaction times, highly innovative underlying technology and extensive backing from various Fortune 500 companies, Ripple seems to be set to greatly impact the financial industry. That being said, the value of XRP fluctuates, as is the case with all cryptocurrencies. There are no certainties for Ripple‘s future & it‘s impossible to predict the future value.
Can I earn money with XRP?
Yes, you can make money with Ripple. Compared to early 2017, the value of XRP has increased more than a hundredfold. However, Ripple has shown to be volatile. Large profits can be followed by large losses. Trading any cryptocurrency always carries a degree of risk, just like trading with bonds or shares does. Trade, buy, sell and stake XRP at Coinmerce.
Consensus in plain language
On a blockchain, computers need a shared way to agree on which transactions are valid. That agreement process is called consensus. For XRP Ledger, the consensus model described here uses a federated approach. It relies on a Unique Node List of trusted validators, and those validators must reach an eighty percent agreement threshold to permanently record transactions. This is different from proof of work, where miners compete to solve puzzles, and different from proof of stake, where validators are selected based on staked tokens. The practical takeaway is that XRP Ledger is designed for fast confirmation by using a fixed set of validators to reach agreement.
Finality and why it matters
Finality is about what happens after a transaction is confirmed. With probabilistic systems, a transaction may be considered safer after more confirmations. With deterministic finality, the network is designed so that once the agreement threshold is reached, the transaction is treated as permanently recorded. That can be helpful in payments scenarios where you want settlement to be reliable. Keep in mind that finality is about the ledger state, not about the market price of XRP. Price can still move up or down after a transaction is confirmed.
Fees, burning, and spam resistance
Networks need a way to discourage spam and abuse. XRP Ledger is described as burning a small amount of XRP during every transaction. In plain terms, burning means the token is removed from circulation rather than paid to a party. That can make it more expensive to flood the network with low value transactions. This does not guarantee price increases. It is a network design choice that aims to keep the ledger usable under load.
XRP and the built in decentralized exchange
XRP Ledger is described as including a built in decentralized exchange. A decentralized exchange is a system where trades can happen without a traditional broker acting as the middleman. For a beginner, the key idea is that tokenized assets can be exchanged by using smart contract like logic or ledger based mechanisms, depending on how the ecosystem implements assets. If you hold XRP, this matters because the token is native to the ledger where these trading features operate. It also means XRP Ledger usage can be influenced by how active tokenized asset markets become.
Future of XRP, what to watch
The future of XRP depends on multiple moving parts. Adoption is one factor, meaning whether institutions and developers keep using XRP Ledger for payments and tokenized asset exchange. Regulation is another factor. Crypto assets can be treated differently across jurisdictions, and legal clarity can affect access for investors and institutions. Network development and ecosystem activity also matter. If the ledger keeps improving and the decentralized exchange features remain useful, demand for the token can be supported by real usage.
Understand XRP step by step
What is XRP?
If you want to learn about XRP, read all about it in the What is overview.
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