What is Ripple (XRP) – The Ultimate 2019 Guide

What is Ripple (XRP) - The Ultimate 2019 Guide

Ripple (XRP) has always been rated as one of the foremost cryptocurrencies. At the time of writing, Ripple is even occupying the spot as the world’s second-largest cryptocurrency, trailing Bitcoin.

However, Ripple has historically fallen in the shadow of both Bitcoin and Ethereum, escaping some of the buzz and publicity surrounding those cryptocurrencies. This article aims to remedy that, by giving a comprehensive and straightforward breakdown of Ripple.

What is Ripple?

Ripple is not a new cryptocurrency. Rather, it has been around since 2012, and its precursor – Ripplepay – began construction as early as 2005. Ripple is also sometimes referred to as the ”Ripple protocol” or the Ripple Transaction Protocol (RTXP)

Ripple itself is an openly-traded cryptocurrency, and exists in and relies on the XRP Ledger – an open-sourced blockchain. Developed and released by the American technology firm Ripple Labs, Ripple nevertheless spans far beyond merely being a cryptocurrency token.

Rather, Ripple is intended to function as a real-time gross settlement system, exchange system, and remittance network. Although this might seem overwhelming to those unfamiliar with cryptocurrencies or traditional settlement systems, it is actually quite straightforward.

What is the goal of Ripple?

Ripple is, therefore, targeting traditional banks – with Ripple being what the company itself brands as the ”future of banking”. Although this might sound pretentious, such a notion is not entirely without merit.

The existing technological infrastructure for settlements, remittances, and financial exchange has a number of substantial shortcomings. Perhaps most importantly, it is extremely costly – with the US Federal Reserve, the World Trade Organization, and the Institute of International Finance gauging it to cost approximately $1.6 trillion.

Nevertheless, there are also other problems systemic to traditional, bank-related settlement systems. They are above all extremely slow, especially viewed against the backdrop of a modern, global ”24/7” economy. As such, traditional settlements oftentimes take between three and five days to process.

Moreover, the existing settlement systems are also riddled with comparatively high failure rates. This can equate to costly delays and significant annoyances for customers. Ripple’s ambition is commonly summarized as ”doing for money what the internet has done for information.”

Considering all of this, it is clear that there is some demand for the sort of revamped settlement system Ripple is developing.

Understanding RippleNet

Ripple’s answer to tying all of this together, then, is that of ”RippleNet”. RippleNet is described by Ripple as being ”a new global payments infrastructure” that will connect banks, businesses, payment providers and digital asset exchanges – as well as others.

RippleNet leverages blockchain technology in order to offer a viable alternative to the traditional ”outdated, irregular and fragmented” payments systems. Put simply, this means that RippleNet presents users with significant advantages compared to established settlement systems.

This translates to that payments can be routed more efficiently, so that they take seconds – rather than days – to process and transact. Moreover, the total payment costs can be substantially lowered, through minimizing capital requirements and reducing the costs associated with processing the settlements.

RippleNet also uses a standardized and decentralized technology framework, allowing RippleNet customers a single access point into a global network. This standardization stems from the so-called ”RippleNet Rulebook” which dictates rules for network participants.

Finally, RippleNet also boosts the certainty of settlements, through offering end-to-end visibility of fees, delivery time and status. This is intended to ensure that all money sent using RippleNet will reach its final and intended destination.

Furthermore, RippleNet is the technology underpinning that of the Ripple cryptocurrency. This means that understanding RippleNet is integral to comprehending the overarching vision of Ripple.

The Ripple token (XRP)

Nevertheless, another core component of the vision behind Ripple is that of the token itself. The Ripple cryptocurrency is designed to tie into the settlement-centric perspective previously touched upon.

Ripple (XRP) is RippleNet’s native currency and used for all transactions in the system. More specifically, Ripple was designed in order to be used by businesses to source liquidity in cross-national payments.

The cryptocurrency was also developed in order to comply with the previous goals of RippleNet – meaning that it is both fast and cost-efficient. Although Ripple is – understandably – very fast compared to traditional settlement systems, it is also highly competitive compared to other cryptocurrencies.

In fact, Ripple transactions are processed in approximately four seconds – making it a lightning-fast procedure. This is noticeably faster than Ethereum transactions, which are processed in around two minutes, or Bitcoin transactions which can take an hour.

In addition, Ripple is also designed to be highly scalable, as to support the high volumes required by a real-time settlement system. As is, Ripple can handle approximately 1,500 transactions every second.

However, it has previously been noted that Ripple can theoretically be scaled to handle the same amount of throughput as that of the well-known financial services firm Visa. This would entail supporting truly a massive capacity of 50,000 transactions per second.

However, it has previously been noted that Ripple can theoretically be scaled to handle the same amount of throughput as that of the well-known financial services firm Visa. This would entail supporting truly a massive capacity of 50,000 transactions per second.

However, it should be noted that Ripple was not started in order to compete with cryptocurrencies such as Bitcoin or Ethereum. Rather, the RippleNet was designed to be a viable successor to bank settlement systems – such as SWIFT or Euroclear.

As such, Ripple (XRP) was developed in order to act as a liquidity bridge between traditional fiat currencies. Nevertheless, the underlying fundamentals of Ripple have not stopped investors from becoming interested in the tokens.

Despite not being designed to be a token for usage, rather being a ”bridge token” of sort between fiat currencies, this has not stopped investors from embracing Ripple. To highlight this Ripple’s total market capitalization is – at the moment of writing – sitting at a massive $14.16 billion.

Ripple, the company & Ripple, the token

It should be noted that there is a difference between Ripple (the company) and Ripple (the cryptocurrency). Although the two are frequently used interchangeably – so too in this guide – the company Ripple encompasses more areas than the XRP ”Ripple” token.

The company Ripple primarily develops payment software for banks and various actors. Although the company Ripple owns the vast majority of the total supply of the token Ripple, the two are not entirely synonymous.

For example, Ripple the company primarily deals in software solutions. The main three transaction solutions built on RippleNet include xCurrent, xRapid, and xVia.

  • xCurrent

xCurrent is the most advanced payment processing software to be built using RippleNet. This system is primarily intended to be used with financial institutions such as various banks. xCurrent is widely heralded as prospectively having the potential to replace legacy settlement systems such as SWIFT. However, xCurrent is not natively built using XRP Ledger. Rather, xCurrent is mainly intended to provide interoperability between different currencies.

  • xRapid

Another of Ripple’s offerings. This system is created in order to be the source of XRP liquidity. xRapid is a Ripple initiative aimed at lowering the liquidity cost of cross-border payments. In late 2018, Ripple revealed that xRapid had gained several commercial customers. Moreover, xCurrent gained xRapid integration through the xCurrent 4.0 update.

  • xVia

This is a financial product mainly aimed at business-to-business (B2B) companies that wish to send payments. xVia is without a doubt Ripple’s least-developed solution so-far, however, this does not mean that it is without potential. xVia is intended to simplify the use of RippleNet applications. Furthermore, xVia is primarily intended to be used by high-volume customers.

How to buy Ripple (XRP)

The best way to purchase Ripple tokens is through one of the major cryptocurrency exchanges online. However, this is most easily done through first purchasing Bitcoin or Ethereum, and then swapping this cryptocurrency for Ripple.

The best way to purchase Ripple tokens is through one of the major cryptocurrency exchanges online. However, this is most easily done through first purchasing Bitcoin or Ethereum, and then swapping this cryptocurrency for Ripple.

As always, Coinbase is an alternative that can be easily understood by most. However, it is naturally possible to swap Ethereum or Bitcoin for XRP tokens on many other cryptocurrency exchange platforms as well.

Ripple trivia

The maximum supply of Ripple was intentionally pegged to 100 billion at the cryptocurrency’s inception. Consequently, Ripple was designed to be a scarce asset. However, it should be noted that each Ripple transaction destroys a small amount of Ripple tokens, as a safety-means against attack and spam.

This means that although the maximum supply of Ripple is 100 billion, the total supply is slightly lower – at around 99.9933 billion. The current circulating supply, on the other hand, is currently around 38 billion.

The remaining ~60% of Ripple is currently put in escrow. The plan is to let the remaining amount of Ripple trickle into the market gradually, with around 1 billion Ripple released to the public each month.

This mechanism is designed not to flood the market and investors with tokens. It also allow the Ripple system to continue developing at a healthy pace. If not for this gradual release, the price of Ripple could very well plummet as available supply skyrockets.  

Moreover, most watching the cryptocurrency markets will know that 2017 was a highly relevant year for cryptocurrencies, characterized by a massive price rally towards the end of the year.

However, although most people primarily associate this price increase with Bitcoin, Ripple actually performed even better. In fact, the price of Ripple increased by a massive 35,000% during 2017.

Is Ripple centralized or decentralized?

On another note, cryptocurrency observers oftentimes classify different cryptocurrencies as being ”truly” decentralized or not. It should be ceded that as Ripple currently controls a majority (~60%) of the potentially available tokens, the system cannot accurately be called decentralized.

However, Ripple is specifically designed to combine elements of centralization and decentralization. Some decentralization purists might argue with this reasoning, but it is not entirely misplaced.

Ripple’s CEO has noted that part of the reason why the system can be called decentralized is due to the fact that the XRP tokens will continue to function even without Ripple. This is due to the previously mentioned difference between the company Ripple (Ripple Labs) and the token Ripple (XRP).

Moreover, back in 2017 Ripple’s CTO also unveiled a so-called ”decentralization strategy”. This outlined how Ripple would continue to strive towards greater decentralization. In fact, the blog post claimed that Ripple could potentially become more decentralized than Bitcoin.

The state of Ripple

All of this seems to paint a promising picture for Ripple. However, things are already going well. The company Ripple already boasts numerous offices around the world, with presences in San Francisco, New York, London, Sydney, India, Singapore and Luxembourg.

Moreover, Ripple has also more than 200 current customers around the world. Moreover, these range from universities to banks. To just mention a few of the notable partnerships that Ripple have already announced, Bank of America, Santander, UBS, RBC, and Cambridge University immediately come to mind.

Ripple has also received an outpouring of interest from other well-known firms that have gone so far as to invest in Ripple. These investors similarly range from a wide variety of industries.

Some of these investors include Google Ventures, Andreessen Horowitz, CME Group, Accenture, Core Innovation Capital, Seagate, Santander InnoVentures – as well as several more.  


Many cryptocurrencies are created with the sole purpose of being a digital, decentralized asset. Although there is nothing inherently wrong with such cryptocurrencies, it should be noted that Ripple is quite different from them.

As always, it remains to be seen whether Ripple can successfully supersede the place of the fragmented, traditional payment systems. It is clear that Ripple has a real use-case and can, therefore, be exceedingly suitable for banks and financial institutions.

Moreover, the existing practical use of products such as xCurrent means that the company Ripple is bankrolled by its ongoing business. This bodes well for continued development of the Ripple system and Ripple token.

However, there are some hurdles that need to be cleared first. Financial institutions have mainly relied on RippleNet for testing, meaning that this functionality needs to be expanded if Ripple truly intends it to replace legacy settlement systems. No matter what, it is easy to see why many are intrigued by the potential of Ripple.

Image Source: “Flickr, Pexels, Pixabay”

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