Step-by-Step Guide to Ripple

Ripple Guide

Contents

What Is XRP?

XRP is cryptocurrency that runs on the XRP Ledger, a blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz. McCaleb and Britto would go on to found Ripple and use XRP to facilitate transactions on the network. You can buy XRP as an investment, as a coin to exchange for other cryptocurrencies or as a way to finance transactions on the Ripple network.

Notably, XRP’s blockchain operates a little differently than most other cryptos. Other cryptocurrencies open their transaction ledgers and verification processes to anyone who can solve complex equations quickly, but transactions are secure as the majority of ledger holders must agree with the verification for them to be added.

Instead, the XRP’s Ripple network somewhat centralises the process: While anyone can download its validation software, it maintains what it calls unique node lists that users can select to verify their transactions based on which participants they think are least likely to defraud them. Its default list currently contains 35 trusted validators. Ripple decides which validators to approve for this list and also makes up six of these validation nodes. However, users can opt out of this default list and hypothetically remove Ripple-backed validators from their transactions entirely, instead constructing their own lists of trusted validators. This would allow the network to continue to approve transactions even without Ripple the company remaining involved or even continuing to exist.

As new transactions come in, the validators update their ledgers every three to five seconds and make sure they match the other ledgers. If there’s a mismatch, they stop to figure out what went wrong. This allows Ripple to securely and efficiently validate transactions, which gives it an edge over other cryptocurrencies, like Bitcoin.

“Bitcoin transaction confirmations may take many minutes or hours and are typically associated with high transaction costs,” says Lee. “XRP transactions are confirmed around four to five seconds, at much lower cost.”

Ripple (XRP) history

Most cryptocurrencies have one specific individual or entity who can be credited with creating the cryptocurrency. Bitcoin (BTC), for example, was created by the pseudonymous Satoshi Nakamoto. XRP’s history is complex, as several individuals were involved in creating both the technology behind it and the business entities that helped it grow.

OpenCoin’s co-founders Jed McCaleb (who also founded Mt. Gox), Arthur Britto (who helped develop the XRP Ledger) and Chris Larsen (who founded several fintech firms) are often credited for the creation of XRP. Still, while they were notable individuals in the space, other people were involved.

These include David Schwartz, who co-authored the original Ripple whitepaper and to this day serves as Ripple’s chief technology officer, and Stefan Thomas, a former Ripple chief technology officer.

How Does XRP Work?

The XRP ledger uses distributed ledger technology (rather than blockchain technology) to support the transfer of tokens that represent fiat currency, cryptocurrency or any other unit of value. Since the protocol is completely open, anyone could access it without prior approval from Ripple Labs. This allows bank and non-bank actors to incorporate the Ripple protocol into their own systems.

Is It Worth Buying Ripple (XRP)?

In a bear stock market, investors sentiments might change, and the crypto market is no different. Investors have less to lose, and dollars can go farther in every crypto investment than they did when the market was at its peak. That makes it less risky to toss a few hundred dollars at a coin they like or a company they believe in — but there is still a risk of loss if the chosen investment doesn’t increase in value.

XRP has gained the trust of both financial institutions and investors, which could make it a more reliable, stable investment than some other alt-coins.

Additionally, Ripple has a finite number of coins, unlike some other cryptocurrencies, where tokens are constantly being created and mined. Ripple distributes all the XRP tokens on a timed, pre-determined schedule. That said, the cap is a staggering 100 billion, and only half are currently in circulation.

Ripple’s growth potential, capabilities as a cross-platform payment method and low entry point could make it enticing for investors looking to shop the bear market “sales,” so to speak. Comparing bitcoin to Ripple XRP, Fool.ca wrote, “Ripple might be a slightly better buy [than bitcoin].”

How is The Ripple Network Secured?

The difference between XRP and Bitcoin could be summed up as the difference between a company and an economy. Bitcoin’s supply is issued through the mining process at a rate predetermined by a mathematical algorithm. The transactions are processed in the decentralized mining industry, and XRP’s supply is issued by a company at a rate predetermined by its executives, while its transactions are processed by a committee of pre-approved stakeholders.

This makes it a perfect option for those who know what’s wrong with the traditional banking mechanisms, but aren’t quite into the complete decentralization.

How to Use XRP?

While XRP’s main purpose as an exchange and international bank transfer is quite underdeveloped at the moment, the digital currency is accepted by at least 4,500 merchants across the globe.

How to Choose an XRP Wallet?

There are many wallets that can store XRP. Depending on their need for security and functionality, users can choose the wallet that suits them. Kriptomat exchange is a great place to store your XRP, as it offers a large range of functional options (buying, selling, exchanging for other cryptocurrencies) without ever compromising on security.

What is the difference between Ripple and XRP?

Ripple is a technology company and XRP is an open-source digital asset independent of Ripple. Ripple uses XRP in its solutions because it’s fast, efficient, reliable and carbon-neutral—and because it seamlessly supports our customers’ compliance efforts.

FAQs

Is XRP owned by Ripple?

XRP and Ripple are terms often used interchangeably, but they are two distinct entities. XRP is form of cryptocurrency that runs on the XRP Ledger; a blockchain in other words. Ripple is a money transfer network and for-profit company that helps develop XRP, the XRP ledger, and other projects.

What is the Ripple XRP lawsuit?

In 2020, the US Securities and Exchange Commission filed a law suit against Ripple Labs Inc. and two of its executives for allegedly raising more than $1.3 billion through an “unregistered, ongoing digital asset securities offering”. Essentially SEC contends that as Ripple raised funds, beginning in 2013, through the sale of XRP it should have registered it as a security. Most recently the U.S. Securities and Exchange Commission and Ripple Labs have requested a summary judgment from the judge in an effort to conclude the lawsuit before it proceeds to a trial.

Can I still buy Ripple XRP?

Yes, however, you may have to do your research to find it as many US exchanges, such as Coinbase, have stopped listing XRP due to the lawsuit with the US Securities and Exchange Commission. Others, such as eToro, are still listing it.

Does XRP have an unlimited supply?

No. XRP currently has 45,404 billion tokens in circulation, and there is a limit of 100 billion XRP coins. Bitcoin, on the other hand, has a supply limit of 21 million.

What will XRP be worth by 2030?

It’s very hard to say. If Ripple emerges triumphant from its SEC lawsuit, and a mooted IPO goes as planned, it has the potential to do well by 2030. Many XRP backers point to the coin’s cross-platform and cross-blockchain payment technology as proof that XRP has a bright future ahead of it. But, it’s anyone’s guess. It’s hard to foresee what is happening next week in the crypto markets, let alone by 2030.

Can you mine Ripple (XRP)?

Interestingly, no you can’t mine XRP. The reason is that the full 100 billion XRP have already been “pre-mined”, to be periodically released over time.