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Understand what Ripple is about including its functions, prospects, lawsuits, allegations, and wrap your head around what went wrong.

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Bitcoin and Ethereum are the pioneers of the crypto industry – the cryptocurrencies that occupy first and second place in 

. But there are another 5,100 other coins (

) out there – each tied to a specific project or blockchain. With XRP actively appearing as a headline in major crypto news, it’s only natural you ask, "What is XRP and what’s going on with Ripple"?

XRP refers to a cryptocurrency that was developed by Ripple. Its original use was to serve as a “digital asset built for global payments.” Generally, Ripple is a networking company that released XRP as its native cryptocurrency. Since then, it has grown exponentially to be the third-largest digital currency in terms of market capitalization.

The company’s name behind the XRP crypto – Ripple – is often used to describe the digital currency XRP. The digital asset underpins the open payment network on which it is transferred and the Ripple project’s holding company.

 is the company behind the project. It focuses on real-time payment settlements and currency exchange services for financial institutions such as banks and payment processors. 

Since its launch in 2012, over 100 companies worldwide have implemented Ripple’s software for faster, frictionless transactions.

Unlike Bitcoin or Ethereum, Ripple does not refer to a blockchain network with a native cryptocurrency. There is an XRP Ledger, a blockchain-like network that facilitates payments in XRP, the digital currency issued by Ripple. The XRP crypto fits into its business model by serving as the fuel that powers its cross-border payments technology.

Hence, XRP value is derived directly from its digital payment network and protocol. The cryptocurrency XRP ties into the digital asset’s use and the platform behind it as a payment settlement, asset exchange, and remittance system that works similarly to the SWIFT system. It serves as a service for international money and security transfers that is global, centralized.

Unlike other cryptocurrencies, Ripple is secured by a network of validating servers overseen by a private company. That is what makes it centralized, as it is the servers’ internal ledger that guarantees transactions based on consensus. XRP runs on the XRP Ledger Consensus Protocol, where Ripple Labs controls the dispersion of new coins, and there are no mining rewards. All 

 are pre-mined, with over 45 billion XRP coins currently in circulation. Though, more coins will be released by Ripple Labs as needed to control the supply and demands.

The interesting part about the Ripple platform is that transactions are not limited to XRP. The protocol also supports fiat currencies like Dollars, Euro, Pound, and Yen and cryptocurrencies like Bitcoin.

Ripple is primarily a payment processor and currency exchange where the XRP currency supplements Ripple’s mission. But Ripple thrives on something else. It mainly derives its value from it and competes with traditional payment validation and remittance systems like Swift, ACH, and Payoneer. 

However, the XRP’s centralized model makes the network is less secure than Bitcoin. But, on the other hand, it’s capable of processing transactions more quickly than Bitcoin. That is mainly because the UNL of validators is centralized; hence, they can agree on consensus and share data quicker. 

Ripple comprises a real-time gross settlement system (RTGS), currency exchange, and remittance network. The platform functions based on a blockchain-based distributed payment protocol for facilitating instantaneous and low-cost transactions between traditional banks, payment processors, and financial institutions. It achieves this by leveraging two core elements: 

, on the other hand, is a distinct global network of banks and financial institutions that send and receive payments through Ripple’s distributed platform. RippleNet was designed to offer real-time and low-cost payments. It serves as a unified decentralized global network of banks and financial institutions, delivering a frictionless global payments experience. 

What Is The Ripple Protocol Consensus Algorithm (RPCA)?

The Ripple Transaction Protocol (RTXTP) is a blockchain protocol similar to the protocols used by Bitcoin and Ethereum. Its difference aims for affordable and efficient transfer of funds globally. The protocol achieves this efficiency in terms of speed thanks to the Ripple Protocol Consensus Algorithm. 

The RPCA is applied every couple of seconds by all participating nodes to maintain the network’s correctness and agreement. Upon reaching a consensus, the current ledger is considered “closed” and becomes the last-closed ledger.

XRP has come a long way since its introduction in 2012. XRP charts showed a massive community rallying behind the platform and the XRP crypto asset over the years. In 2017, the token’s market cap went from under 

 in 3 weeks – something no other cryptocurrency could achieve.

The association with the highly successful Ripple payment network has always been the primary driver behind XRP’s growth in value. Additionally, the release of additional products proved to be a prudent move for the company behind Ripple.

The rollout of xCurrent, xVia, and xRapid increased the Ripple platform’s functionality by creating new use cases. 

Ripple origins can be traced to 2005 when Ryan Fugger launched RipplePay.com as a precursor to blockchain currencies. RipplePay provided secure online payment options for communities. In 2011, Fugger was approached by Jared McCaleb and Chris Larsen to replace RipplePay with a digital currency system with community consensus verified transactions rather than miners like on the Bitcoin network.

The Ripple Transaction Protocol was then developed in 2012, which created a new value token known as XRP.

In 2014, several banks and payment processors signed on to utilize Ripple in a testing capacity. As of 2020, over 

, including Standard Chartered and Santander to facilitate international payments.

Ripple draws its value from the Ripple Transaction Protocol, which connects payment agents to facilitate payment across borders. 

 discovers a trusted path for transactions in a centralized node network (UNL list). It is easy to integrate with any traditional payment provider’s existing infrastructure, banks, or other institution where a third agent needs to act as a middleman between intermediaries. On Ripple, the agents are called “gateways,” and they’re usually banks or other places that accept deposits to transfer money.

Ultimately, XRP’s centralization makes it less censorship-resistant than open-source blockchains like Bitcoin and Ethereum. 

XRP is thus used to facilitate faster transactions because there is no mining involved in the transaction process. The validators who verify transactions without a promise of reward are vetted and trusted by Ripple, and this trust is necessary to XRP’s design to prevent double-spending.

One of the main differences between Bitcoin and Ripple is in the consensus protocol they use. Bitcoin uses the 

 (PoW) algorithm. On the contrary, Ripple uses the XRP Ledger Consensus Protocol where validators, not miners, maintain the transaction ledger and keep a record of the transaction.

Bitcoin also runs on a permissionless node network, whereas 

. While Bitcoin is entirely decentralized, Ripple is overseen by a private company. 

XRP transactions better than many other currencies trading in the open market, although certain limitations are binding the investors from betting on it. 

When studying XPR charts, we see that XRP hit an all-time high in early 2018 – reaching $3.84 on 4 Jan.

Since then, the XRP value has tailed-off. The SEC’s latest legal action against XRP and US-based platform 

 from the marketplace contributed to the drastic declines in XR’s price trading only at 

But, what are the reasons behind these lawsuits? Theoretically, the reason for this slump is mainly due to Ripple’s malpractice. The complaint explains XRP violates the provisions set in which a security token (investment contracts) must fulfill specific requirements upon disclosure.

 and failure to properly label the $1.3 billion XRP as a security rather than a utility token during the capital raise. Besides, the SEC later unveils the alleged Ripple’s co-founder and the company CEO discretely 

 by selling their unregistered XRP stash during the price rally during the investigation. 

Since then, the price of XRP has recovered somewhat. At the time of writing (late March 2021), its price was hovering around the $0.55 mark.

Ripple drew considerable criticisms because of its capital raise, which many experts saw as a Security Offering rather than an Initial Coin Offering (ICO). 

What’s even more, investors have been pressured by the dumping of XRP coins by Ripple Labs and/or the company’s managers in a move that has affected the market price of the crypto.

Many in the crypto community see a direct correlation between Ripple “dumping” its monthly escrow released XRP and the stagnant XRP price. The oversupply of XRP on exchanges was first thought to contribute to poor price performance throughout that period. However, the truth action says otherwise. 

Ripple has been accused of violating laws in the US, and some major crypto exchanges like Coinbase is halting XRP trading. Still, banks continue to adopt the technology that underpins Ripple. That could potentially create more real-world applications for Ripple and its platform. 

Here are some of the the highlighted responses from the lawsuits:

Many investors still ask, ‘What is XRP worth’ and how will XRP change in five years? It’s challenging to know the answers to these questions – and XRP’s value is tied to how the crypto industry is performing as a whole. There is no consensus on whether XRP will surpass thrive again nor to gain confidence from the public again.

What Are The Upcoming Projects for Ripple? 

Ripple’s main focus is on resolving the brewing lawsuit with the US Securities and Exchange Commission that has successfully taken crypto projects to court. Usually, dramatic declines in a token’s valuation will follow. With Coinbase suspending all XRP trading and others having followed in removing XRP trading pairs, it’s only the future that can tell what’s next for Ripple.

XRP is one of the most popular cryptos in the market. You can buy it on virtually any crypto exchange you prefer, including Bybit. 

However, do note that on Bybit you’ll need to first purchase BTC/USDT before you can trade XRP on spot/derivatives.

Note that the payment method for XRP may differ from site to site. However, if you choose to buy it from a major crypto exchange, you can easily use your credit/debit card, PayPal, Skrill, or direct bank transfers to make your purchase. 

In an age where new cryptocurrencies are popping up almost daily, very few cryptos have managed to solidify themselves by providing real solutions to real-life challenges. Of the cryptos that have gained hype, none has succeeded better than Ripple, which has carved out a niche in the market and dominated it. As the world continues to embrace cryptocurrencies and increasingly adopt them, XRP has positioned itself right at the center of the global financial system. 

Although the long-term success of XRP remains unclear, one thing’s for sure: its future is partially dependent on whether banks and financial institutions want to use Ripple's products, or trade on their own. Either way, Ripple already has an important competitive advantage as a "first mover,” and the products from Ripple Labs have already been extensively tested in practice. Therefore, you can use them with peace of mind.

In the first eight months of 2021 alone, XRP grew by close to 450%, as indicated in the chart below.

Ripple (XRP)’s growth percentage in 2021 | 

Ripple is clearly focusing on the banking sector and wants to replace the existing system with its blockchain solution. Those behind Ripple see two possible scenarios for how the banking world may develop in the future. In both cases, Ripple could play an important role, and thus shouldn’t be underestimated as it helps to pave the way forward.

 Ultimately, it’s only fair to see how the game plays out in the crypto ecosystem and to make a judgment for yourself. 

A Beginner’s Guide: What Is XRP (Ripple) All About?

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