XRP is a cryptocurrency that was developed by the company Ripple Labs, Inc. It is a digital asset that is used for transactions on the Ripple network, a global payment network that allows for fast, secure, and low-cost cross-border payments. XRP is often referred to as the “native asset” of the Ripple network, as it is used to facilitate transactions and provide liquidity to the network.
Ripple Labs was founded in 2012 by Chris Larson, Jed McCaleb, and Arthur Britto with the goal of revolutionizing the global payment industry by creating a more efficient and cost-effective way to send money across borders. The company initially focused on developing a payment protocol called Ripple Protocol Consensus Algorithm (RPCA), which was designed to allow banks to send money to each other in real-time, without the need for intermediaries such as correspondent banks or clearing houses.
In 2013, Ripple Labs introduced XRP as a digital asset that could be used on the Ripple network to facilitate transactions and provide liquidity. XRP was created as a way to solve the problem of liquidity in cross-border payments, as banks often need to hold large amounts of different currencies in order to facilitate international transactions. By using XRP as a bridge currency, banks can reduce their liquidity needs and lower the cost of cross-border payments.
XRP has several key features that make it well-suited for use on the Ripple network. First, it is highly scalable, with the ability to process thousands of transactions per second. This makes it ideal for use in high-volume payment systems, such as those used by banks and other financial institutions.
Second, XRP is decentralized, meaning that it is not controlled by any single entity, such as a government or a bank. Instead, it is managed by a network of nodes that validate transactions and maintain the ledger. This ensures that XRP is secure and resistant to fraud and tampering.
Finally, it is fast, with transaction times typically measured in seconds rather than minutes or hours. This makes it well-suited for use in time-sensitive payment situations, such as when making a payment to a supplier or employee.
In addition to its use on the Ripple network, it is also used as a speculative asset, with many investors and traders buying and selling it on exchanges in the hopes of making a profit. XRP has seen significant price fluctuations over the years, with its value reaching an all-time high of $3.84 in January 2018, before plummeting to around $0.20 in December 2018. As of June 2021, the price of XRP is around $1.50.
While XRP and Ripple are often used interchangeably, it is important to note that they are not the same thing. XRP is a digital asset that is used on the Ripple network, while Ripple is the company that developed the Ripple network and created XRP. In this sense, XRP is similar to how ether is used on the Ethereum network, while Ethereum is the company that developed the Ethereum network and created ether.
Despite this distinction, Ripple Labs does hold a significant amount of XRP, and the success of the company is often closely tied to the price of XRP. In fact, Ripple Labs owns around 60% of the total supply of XRP, which has led to criticism from some quarters that the company has too much control over the asset.
Ripple Labs has also faced criticism for its close ties to the traditional financial industry, as many cryptocurrencies are seen as a way to bypass traditional financial institutions. However, Ripple Labs has argued that its goal is to work with the financial industry to improve the efficiency and speed of cross-border payments, rather than to charge higher fees.
How to Use XRP
Anyone may use Bitcoin, Ethereum, and a variety of other cryptocurrencies by simply establishing a wallet. The same is true for XRP, however new wallet addresses must have 20 tokens in them to be booked. To prevent excessive expenditures, new XRP users should select a single wallet rather than committing to many addresses.
There are various wallets available on the market that are compatible with the XRP network. To avoid the 20 XRP fee, most users keep their tokens on the cryptocurrency exchanges where they purchased them, as the exchanges manage the fee. However, storing funds on a trading platform has downsides because exchanges may freeze or be hacked in some situations.
Investors can use a software XRP wallet to keep XRP outside of a cryptocurrency exchange. For security reasons, wallets that let users to control their own private keys are recommended. Alternative, frequently web-based wallets that handle users’ private keys, charge operational fees as well.
Before transferring your assets to a wallet, you must first get them by purchasing XRP, which is sold on the majority of the leading cryptocurrency exchanges. After the Securities and Exchange Commission (SEC) sued Ripple over the purported sale of $1.3 billion in unregistered securities, relating to the firm’s XRP sales, XRP was delisted from various platforms in 2020.
Ripple has an XRP markets website where you can view where the coin is listed and its trading volume.
Users who purchase XRP on exchanges can transfer the cash to their own wallets or retain them on the trading platform. Selling XRP is similarly simple on exchanges, particularly ones with a high trading volume.