What is Ripple (XRP)

22. Apr 2021

What is Ripple?

Ripple is a real-time payment processing and gross settlement platform that allows its users to perform transactions globally using XRP.  This international payment network was founded back in 2021, and it's one of the biggest networks in the realm of cryptocurrency. Over time more and more companies have adopted it. Moreover, currency speculators have also started taking an interest in Ripple (XRP).


How is Ripple Different from Other Cryptocurrencies?

Ripple to Others

Unlike all the other major cryptocurrencies and networks, Ripple doesn’t use blockchain technology. Instead, it uses the Ripple Protocol consensus algorithm, which is its own and specialized proprietary technology. There are also some technical differences that make the transaction process easier, faster, and more secure. Technically speaking, the Ripple platform is made up of a hash tree instead of a traditional blockchain.

Blockchain is basically a type of database that gathers information in the form of different linked groups, which are called blocks. Each new piece of information is linked back to the last block, and that's how all the blocks make up a chain. The technology of Ripple works pretty similarly to that because it also uses multiple nodes to process a single transaction.

The open-source product that Ripple created is known as the XRP ledger. It’s basically a native currency of the platform that banks can use in order to source liquidity in real-time. Moreover, XRP can also be used by the payment providers to reach new markets, offer lower foreign exchange rates and faster payment settlements.

The Ripple platform essentially aims to take a stand against the “walled gardens” of the traditional financial networks such as credit cards, banks, etcetera. On such platforms, the flow of money is restricted because of processing delays, currency exchange charges, and other fees.


How Does Ripple Work?

As mentioned, the working mechanism of the Ripple protocol consensus algorithm is similar to blockchain because each node must verify every new transaction to make sure that it's correct. The total supply of Ripple XRP cryptocurrency is about 100 billion XRP, and Ripple holds about 60 billion of them already. The team behind Ripple has done it to keep it from runaway inflation. Moreover, the XRP is also locked up in the network's escrow, and the team only releases a certain supply at regular intervals in the market to make sure the value of the currency remains independent of usual price fluctuations.

Ripple XRP essentially works as a bridge for different banks. For example, if you want to send money to your loved ones out of the country, then you'll need to take it to your respective bank. Typically, it'll take about three to five days at least for the money to reach its destination. The bank will also charge you a significant amount of exorbitant fee for the transfer service. On the other hand, if you send the money with Ripple, then it will be converted to XRP. Not only will your loved ones receive the same amount of money, but the transaction will take place almost instantly. The vision behind Ripple is to provide end-users with a platform where transactions occur at the speed of text messages.


Is Ripple Centralized?

Ripple Network

In a way, it’s completely safe to say that Ripple is kind of centralized. That’s because it holds more than 50 percent of the total XRP supply. However, the founder and CEO of Ripple, Brad Garlinghouse, explains it a little differently. He bluntly says that the Ripple network is not centralized because if it disappears from the landscape, the XRP will still continue to work, and that's the most important factor to measure if something is centralized or not.


Decentralization Strategy of Ripple!

Back in early 2017, the Ripple community was showing its concern that the network is centralized. Therefore, Ripple in Mat 2017 launched its decentralization strategy. The company announced that it'd introduce some measures in order to diversify the XRP ledger validators. Then in July 2017, Ripple increased its validator nodes to 55.

The development team behind the network also shared its future plans to bring additional validator nodes that will be controlled by third-party. The plan also explained that two third-party-operated validating nodes would be added by removing one validating node that Ripple operates to ensure that no singular authority controls the majority of the platform’s trusted nodes. It's also important to keep in mind that being centralized is not a bad thing, but it still fails to satisfy many decentralized ideologists.


History of Ripple XRP

After the inception, Ripple XRP started gaining fame slowly, and by 2018 over 100 banks had registered to use Ripple. But the fact of the matter is that most of those banks signed up for using the messaging capabilities of the infrastructure instead of using XRP cryptocurrency.

Just like all the other major cryptocurrencies, XRP experienced a record-breaking increase in its value, and at that time, one XRP was equal to 3.65 US dollars. However, in 2020 the price of the XRP cryptocurrency dropped, and it lost about 95 percent of its value (from 3.65 to .19 US dollars).

Later in 2020, the SEC (Securities and Exchange Commission), as a part of its legal proceedings, classified Ripple XRP as a security rather than considering it a commodity.


Advantages of Ripple XRP


Ripple is considered one of the most valuable digital currencies in the crypto world. Currently, its estimated market capitalization is well over 10 billion US dollars, according to the 2021 stats. It’s also one of the fastest-growing cryptocurrencies, and the value of its total tokens in circulation is about 27 billion US dollars. It's also important to note that Ripple entered the crypto market later than major cryptocurrencies, but it has managed to capture the attention of leading industry giants. That's why it continues to make huge and significant reaps in its value.

Just like all the other cryptocurrencies Ripple also entered the market to serve the community and to solve existing problems. The platform brings some unique benefits to the crypto world and to the end-users, which have made it one of the preferred ways to trade compared to the rest of the players of the same league. Here are some of the reasons why it’s the favorite network for countless crypto users and why its community is becoming stronger continuously.


Ripple Offers Widespread Usage

The legitimacy and adaptation of any new method of the transaction depend upon its current uptake in the market. Ripple offers enough coins to its users to perform as many transactions as they want, with more than 45 billion tokens in circulation across the globe. Currently, there are more than 5000 different digital currencies available in the crypto market, but Ripple has managed to partner up with well over 100 companies. Not only does Ripple offer these companies an impressive and efficient messaging infrastructure, but it also allows them to transport money from one place to another. These partnerships are part of the platform’s initial goal that was to help banks and different financial companies to transfer money. Moreover, the adoption of Ripple by world-famous financial institutes is only adding up to the platform’s legitimacy and helping it directly to increase its value.



The faster speed of transactions improves the confidence of sellers, and buyers and customers lose faith if transactions are being delayed. But in order to achieve better speed, it’s important not to compromise the quality of services. Ripple XRP manages the best of both worlds impressively as it allows the users to complete any transaction in only three seconds without any errors. This speed is beyond comparison because the traditional bank transaction can take up to five days to complete a single transaction. Ripple is undoubtedly a safe, fast, and certain channel to transfer money from one place to another around the world.



The strength and viability of any platform are measured by its capability to serve as many people as possible. Ripple XRP has the ability to serve over 1,500 unique and flawless transactions in a single minute with impressive consistency and accuracy. The platform is also scalable to offer and perfectly manage exactly the same output as some of the most commonly used financial networks such as VISA. The second fastest altcoin can only manage 15 unique transactions in a single second, and the distant third can't offer more than 6 per second. this incredible speed of Ripple provides you with greater confidence in partnerships and transactions.


Almost Decentralized Payment System

As mentioned, Ripple is developed on open-source technology. It comes with the distribution of customization and the capability to meet the requirements of all types of users. In order to provide users with access to different platforms and markets, the Ripple network is increasing its number of validating nodes. Because of the distribution, you can also transfer money in the form of digital currencies, commodities, and fiat currencies. This feature is one of the biggest and most significant reasons behind its widespread usage and faster adoption.



One of the reasons why many people are not entering the crypto world is the involved level of risk or instability. But the fact of the matter is that Ripple XRP, as compared to the other prominent cryptocurrencies, is in a different league. From the very beginning, Ripple has been delivering excellent value to the investors because of its stable and consistent growth. It’s the stability why enterprises and big financial institutions prefer Ripple XRP over other altcoins.


Disadvantages of Ripple XRP

Along with its numerous advantages, there are also some downsides of using Ripple XRP that you must keep in mind.


Exclusively Targeting Banks

Ripple, after its creation, started targeting banks exclusively. It was a major turn-off for the people who joined blockchain technology in the early days. In fact, some of the big names, such as Jed McCaleb, who were serving Ripple back in the day, left the platform because of exclusively targeting banks strategy.


It Seems Centralized

Although Ripple has taken multiple steps to ensure decentralization, the company still owns more than 60 percent of the XRP coins. It means that the team behind the Ripple platform has the magical 51 percent advantage, which enables it to control the whole network.


Distribution of Nodes is Not Id to Get Ripple XRP?eal

For common nodes, there are no (or very little) incentives on the Ripple platform because all the XRP coins are pre-mined. This functionality only leaves the corporates such as banks and other financial institutions to offer the validating nodes. Moreover, the network is not well distributed because it only needs a small number of nodes to operate properly.



Ripple XRP doesn’t follow the traditional POW (Proof of Work) mechanism that many digital currencies such as Bitcoin use. That’s why it’s not possible to mine XRP to generate new coins. So, the only viable option to get XRP is to buy them from an exchange. Additionally, you’ll need to make sure that you hold your XRP coins in a safe and secure place.

Important Note: Bear in mind that buying XRP doesn't mean you own a portion of Ripple or its stock. Ripple is a separate company that is not publicly traded, and XRP is its native currency.


Where to Hold XRP?

The best way to ensure the safety of your XRP coins is to store them in a Ripple XRP wallet. You can use paper wallets, hardware wallets, web wallets, desktop wallets, mobile wallets, etcetera.


Mobile Wallets

If you want to hold your XRP in a mobile wallet because of better accessibility, consider using the following wallets

The best thing about these mobile wallets is that all three of them are completely free.


Web or Desktop Wallets

These wallets come in the form of software or applications that you can download on your computer or directly access them using a browser. The best examples of these software wallets are as followed:


Hardware Wallets

If you want to store your XRP coins offline, then the following are the best available options.

You can also make your own paper wallet. It’s basically a piece of paper on which you write the private as well as public keys of your XRP coins and store them somewhere safe. Here it’s important to note that you’ll need to fund your wallet with 20 XRP coins as a reserve. It’ll help you to keep your money from the low-level span attacks.

Once you have selected the desired wallet for your XRP, you'll need to create the XRP address, which will be used later on. The address for your XRP is basically a string of 25 to 35 characters which looks similar to the following:

  • rTquiHN6dTs6RhDRD8fYU672F46RolRf9I

It’s important to note that the address string of XRP is case sensitive and always starts with a small "r." After that, it's time to find an exchange that allows you to buy XRP. You can find multiple available options where you can either spend your other cryptocurrencies such as Bitcoin, or you can also use your Fiat currency such as USD, EUR, etcetera. However, the best and most trusted available option to buy XRP is Coinbase. In order to buy XRP, you'll need to create and verify your account on Coinbase and connect it with your wallet.


Buy Ripple XRP from Coinbase!

Coinbase, as mentioned, is the most trusted and biggest cryptocurrency exchange that offers a secure and safe buying process. Other than accepting cryptocurrency, it also supports PayPal, credit or debit cards, and direct bank transfer. You can choose the option that suits you the best, and the service fee will depend on that.

Previously, users first had to buy famous cryptocurrencies such as Bitcoin to purchase XRP from Coinbase. But because of the dramatic growth of Ripple, the platform now allows you to buy it directly. You can also use Coinbase to monitor the value of XRP whenever you want.


What Can You Buy with Ripple?

Not even a decade ago, it was impossible to spend your digital currency to buy anything online. Now the tables have turned, and there are tons of platforms available with cryptocurrency as their acceptable payment method. Moreover, you can actually make a living on crypto if you choose the right platform. Yes, you heard it right; Coinsbee is one of the best examples that supports more than 50 different types of cryptocurrencies, including Bitcoin (BTC), Litecoin (LTC), Ethereum (Eth), and of course Ripple (XRP).

It allows you to buy giftcards with Ripple and mobile phone Topup with XRP. The best thing about this platform is that it offers Giftcards for more than 500 different national and international brands. If you're a gamer, then you can buy PlayStation, Xbox Live, and Steam Giftcards with XRP. You can also buy gift cards for famous eCommerce stores such as eBay, Amazon, etcetera. Other than that, the platform allows you to buy gift cards with Ripple for Netflix, Hulu, Walmart, iTunes, Spotify, Nike, Adidas, and much more.


Potential of Ripple

Ripple Invest

If you’re an investor dealing with the cryptocurrency world, then you'll automatically imagine the dollar sign after learning that Ripple is strongly associated with multiple financial institutions and banks. After all these organizations have much money that you can play with. The value of Ripple XRP is improving because of its increasing popularity. However, it certainly doesn’t qualify Ripple as a great investment option. You need to make sure that you fully understand the network and risks involved before investing. Here are some of the important points that can make it a good investment.

  • Banks and financial institutes are already using both XRP and Ripple protocol.
  • A small amount of XRP burns on each transaction which means that the number of coins is shrinking. Depending upon the XRP demand, the value of the coin can be increased.
  • Ripple makes the whole process of the transaction (especially international) very easy and fast. It has the potential to become the global economy’s backbone.

The following points will allow you to understand the risk associated with Ripple when it comes to investing.

  • It’s overwhelming to determine how many CRP coins are in use.
  • The ultimate power is still in the company's hand, and if the team behind the network plans to release the coins, the entire market can suddenly drop.
  • The platform allows the balances to freeze by making it government-approved, which means that its nature is not permission-less like other cryptocurrencies.


Final Word

Ripple XRP undoubtedly is one of the biggest platforms in the whole crypto world. Not only does it allow you to transfer value in XRP, but it also offers a complete working payment protocol that you can use to perform inter-bank transfers where you don’t need to use XRP. If you’re interested in investing in Ripple XRP, then it’s imperative that you fully understand its working mechanism as well as its potential. Other than that, if you already own XRP, then you can spend it to purchase almost anything you want if you choose the right platform, such as Coinsbee.

Another important thing that you need to keep in mind is that cryptocurrencies are relatively new. There's always a chance that a better system will come out, or some failure breaks the existing protocol entirely and permanently. With that said, it's our comprehensive Ripple XRP guide. We hope that you’ll learn in detail about a misunderstood altcoin available in the market.

























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