What is Ripple and Ripple Labs? What is XRP?

Photo Credits : DepositPhotos

Notice: This article is for informational and educational purposes only, and you should not take it as financial advice.

Ripple Labs is a privately held software company created by the Ripple Protocol, an open-source protocol that includes the XRP book and RippleNet, a package of payment products for institutional use (banks, other institutions and digital currency exchanges).

The company we know today was originally called OpenCoin, but in 2015 it was renamed Ripple. Founded in 2012 and headquartered in San Francisco, California, Ripple Labs is a privately held company – meaning you can’t buy a stake in its business anywhere.

It is important to note that investing in XRP does not mean investing in Ripple Labs, but in the product they created.
Current work Ripple Labs currently employs more than 500 people, has 9 offices worldwide and records (on average) 300% annual customer growth.

Ripple also offers a software package designed for developers and companies to build on XRP, called RippleX. The platform includes tools for interacting with the XRP ledger, as well as PayID and Interledger, two protocols developed separately from XRP. People often use Ripple and XRP alternately, which creates additional confusion around the project.

What is XRP?

XRP is a cryptocurrency developed, issued and partially managed by the American company Ripple Labs. XRP is one of many products in the Ripple Labs package, and was created with the idea of ​​improving the efficiency of cross-border payments, especially in the banking sector.

It is the original digital currency on the XRP account book – an open sourcebook, without permission, a distributed account book that has the ability to settle transactions in 3 to 5 seconds.

XRP can be sent directly without the need for an intermediary, making it a convenient instrument in quickly and efficiently bridging two currencies. The main purpose of XRP is to be an intermediary for exchange offices.

How does XRP work?

XRP Account Book uses distributed ledger technology (instead of blockchain technology) to support the transfer of tokens that represent a command currency, cryptocurrency, or any other unit of value. Because the protocol was completely open, anyone could access it without the prior approval of Ripple Labs. This allows banking and non-banking actors to integrate the Ripple protocol into their own systems.

XRP transaction confirmation

The ledger is kept by various independent participants in the global “XRP community”. Each XRP transaction requires an agreement from independent nodes to validate. This agreement is called consensus and serves as a final and irreversible settlement.

The account book reaches consensus on all transactions every 3 to 5 seconds (on average just under 4 seconds), after which a new book is issued. Anyone can become a validator, and active validators on the book today include universities, stock exchanges, and even financial institutions. There are currently 36 validators, and Ripple Labs runs 6 nodes (which makes up 16% of the network).

Who are the founders of Ripple?

The first iteration of the protocol was created back in 2004. At this stage, (long before the beginning of Bitcoin), the project did not have much in common with cryptocurrencies as we know them today.

The true history of Ripple begins in 2013, when Jed McCaleb, creator of the eDonkey network, invited numerous world-class investors to invest in the creation of Ripple Labs.

Chris Larsen and Jed McCaleb are the founders. Larsen – CEO and privacy activist is one of the richest people in cryptocurrencies. On the other hand, McCaleb is an entrepreneur and well-known developer who co-founded several major crypto projects, including Ripple, Stellar, eDonkey, as well as (at the time) the world’s largest cryptocurrency exchange, Mt. Gox.

What makes XRP unique?

XRP was originally designed for much faster and cheaper transactions than other cryptocurrencies, making it more convenient for everyday payments. However, it is rarely used in this way, as its developers are shifting the focus to the institutional use of XRP. Its ability to be exchanged in any currency or value (such as gold) with a consolidated minimum commission is a great advantage that XRP offers.

What gives XRP value?

XRP derives its value from a variety of factors, but most of all from Ripple’s ability to work with institutions and from its ability to quickly and economically exchange for any currency or asset.

How many XRP coins are in circulation?

XRP currently has 45,404 billion tokens in circulation, while its total offer is 100 billion XRP tokens. Although, Ripple Labs initially owned 55 billion XRP tokens, with the ability to sell billions a month.

How is the Ripple network secured?

The supply of bitcoin is issued through a mining process at a rate predetermined by a mathematical algorithm. Transactions are processed in decentralized mining industry, and XRP supplies are issued by the company at a rate predetermined by its executives, while transactions are processed by a board of previously approved stakeholders. This makes it a perfect option for those who know what is wrong with traditional banking mechanisms, but are not exactly in full decentralization.

How to use XRP?

Although the main purpose of XRP is exchange and international bank transfer, currently quite underdeveloped, digital currency is accepted by at least 4,500 merchants worldwide.

How to choose an XRP wallet?

There are many wallets that can store XRP. Choose a nightstand according to the functionality that suits you and safety.

Frequently asked questions about Ripple and XRP


Is XRP decentralized?

No, XRP is decentralized in terms of the way its validators work. However, the fact that these validators must be approved by one entity reduces the overall decentralization of the network.


Is XRP a blockchain?

XRP is not a blockchain.

Does buying XRP mean buying Ripple?

Buying XRP doesn’t mean you’re buying Ripple stocks. Ripple is not a publicly-traded company, so their shares cannot be bought at any exchange office.

How to buy XRP?

Buying XRP is as simple as visiting Cryptomat, buying a Ripple page and choosing a payment method.

How to sell XRP?

If you already own XRP and keep it on Cryptocurrency Exchange Wallet, you can easily sell it by navigating the interface and selecting your preferred payment option.

Discover

Sponsor

spot_imgspot_img

Latest