XRP is a digital currency designed to revolutionize cross-border transactions by shifting financial operations from closed, institution-controlled databases to a more open and efficient infrastructure. Unlike traditional banking systems, XRP enables fast, low-cost, and trustless transactions—making it especially appealing for international payments. Launched in 2012, XRP stands out in the cryptocurrency landscape with one of the most ambitious goals: transforming global finance through scalable blockchain technology.
At the core of XRP’s functionality is the XRP Ledger, an open-source, decentralized blockchain that supports rapid transaction settlement. Unlike Bitcoin’s proof-of-work model, which relies on energy-intensive mining, the XRP Ledger uses a unique consensus mechanism known as the Federated Byzantine Agreement (FBA). This allows for near-instant confirmations—typically within 3 to 5 seconds—and extremely low transaction fees, averaging just $0.0013927 per transaction.
Validators on the XRP Ledger are part of a trusted network called the Unique Node List (UNL), which currently includes over 150 participants. These validators work together to confirm transactions and maintain network integrity. While this design enhances speed and efficiency, it has sparked ongoing discussions about decentralization compared to more permissionless blockchains like Bitcoin or Ethereum.
👉 Discover how XRP is reshaping global payments—click to learn more
Who Created XRP?
The origins of XRP are not tied to a single pseudonymous figure like Bitcoin’s Satoshi Nakamoto. Instead, it was developed through collaborative efforts by several key individuals in the fintech and blockchain space.
Jed McCaleb, Arthur Britto, and Chris Larsen are widely credited as the co-founders behind XRP and the underlying technology. McCaleb, also known for founding Mt. Gox and later launching Stellar (XLM), played a pivotal role in early development. Britto contributed significantly to the design of the XRP Ledger, while Larsen—a serial fintech entrepreneur—helped shape its long-term vision.
Additional contributors include David Schwartz, who co-authored Ripple’s original whitepaper and now serves as Chief Technology Officer at Ripple, and Stefan Thomas, a former CTO of Ripple who advanced early protocol development.
Ripple vs. XRP: Understanding the Difference
A common misconception is that Ripple and XRP are the same. In reality, they represent two distinct but interconnected entities:
- XRP is the digital asset—a cryptocurrency used for value transfer on the XRP Ledger.
- Ripple is a for-profit company that develops financial technology solutions, promotes the adoption of XRP, and actively contributes to the XRP Ledger’s evolution.
Ripple was originally founded in 2012 as OpenCoin, later rebranded to Ripple Labs in 2013, and finally simplified to Ripple in 2015. The XRP Ledger itself evolved from what was initially called the Ripple Open Payment System to the Ripple Consensus Ledger before becoming the XRP Ledger.
Although Ripple holds a significant amount of XRP and plays a central role in its ecosystem, the company emphasizes that XRP operates independently. According to Ripple’s official stance:
“Ripple focuses on building technology to help unlock new utility for XRP and transform global payments. Third parties are also exploring other use cases for XRP.”
Initially, XRP tokens were referred to as “ripples” or “Ripple credits,” but these terms were phased out to avoid confusion and reinforce XRP’s identity as a standalone digital asset.
👉 See how institutions are adopting blockchain-powered payments today
What Is XRP Used For?
XRP’s primary utility lies in facilitating fast, low-cost cross-border payments. Ripple has developed several enterprise-grade solutions centered around XRP, most notably RippleNet—a global payments network connecting hundreds of financial institutions through a single API.
One of RippleNet’s flagship services is On-Demand Liquidity (ODL), which uses XRP as a bridge currency to eliminate the need for pre-funded nostro accounts. This dramatically improves capital efficiency for banks and remittance providers.
Major financial players such as Santander, American Express, Bank of America, SBI Remit, and Banco Rendimento have utilized RippleNet to streamline international transfers. Even MoneyGram adopted ODL before ending their partnership in 2020.
Beyond payments, Ripple supports broader innovation through:
- Interledger Protocol (ILP): An open-source framework enabling interoperability between different ledgers and cryptocurrencies. While ILP doesn’t require XRP, it integrates seamlessly with the XRP Ledger.
- RippleX: A developer platform offering tools and APIs for building decentralized applications (dApps) on the XRP Ledger.
These initiatives expand XRP’s potential beyond remittances into areas like decentralized finance (DeFi), tokenization, and smart contracts.
How Does the XRP Ledger Achieve High Efficiency?
The XRP Ledger achieves remarkable performance through its consensus mechanism and network architecture. Unlike Bitcoin or Ethereum, which rely on energy-intensive mining processes, the XRP Ledger uses a permissioned validation model based on trusted nodes.
Here’s how it works:
- Validators on the network maintain a Unique Node List (UNL).
- When a transaction is submitted, at least 80% of validators must agree on its validity based on predefined rules.
- Once consensus is reached, the transaction is confirmed within seconds.
This model allows the network to process up to 1,500 transactions per second (TPS)—far exceeding Bitcoin’s ~7 TPS and Ethereum’s ~30 TPS (pre-upgrades). Additionally, because there’s no mining involved, the environmental impact is minimal.
Each ledger version—updated every 3–5 seconds—contains a full snapshot of all account balances, allowing new nodes to sync quickly. This contrasts with traditional blockchains where syncing can take hours or even days.
How to Use XRP
Using XRP is straightforward:
- Buy XRP on major cryptocurrency exchanges such as OKX, Binance, Kraken, or Coinbase.
- Store it securely using a software wallet that supports XRP (e.g., Xumm, Toast Wallet).
- Send or receive payments via your wallet address.
One important detail: To activate a new XRP wallet address on the ledger, you must reserve 20 XRP as an account reserve. This prevents spam and network abuse. Many users avoid this cost by keeping their holdings on exchanges—though this comes with counterparty risks if the exchange is hacked or freezes assets.
For maximum security, experts recommend using non-custodial wallets where you control your private keys.
Understanding XRP’s Value and Supply Model
XRP has a fixed supply of 100 billion tokens, all of which were pre-mined at launch. No new tokens will ever be created. Of this total:
- Approximately 45 billion entered circulation.
- Ripple placed 55 billion into a cryptographic escrow system to ensure predictable supply releases.
Each month, a portion of escrowed XRP is released—some used for business operations, some sold into the market. Any unused tokens are returned to escrow, reducing inflationary pressure over time.
Additionally, every transaction on the XRP Ledger "burns" a tiny amount of XRP (typically 0.00001–0.0001 XRP), making it mildly deflationary. At current rates, it would take tens of thousands of years to destroy all supply—ensuring long-term sustainability.
Market dynamics are influenced by institutional adoption via RippleNet and large-scale sales from early stakeholders like Jed McCaleb, who received 9 billion XRP and sells portions gradually. However, he has also donated millions to charitable causes like GiveDirectly and Literacy Bridge.
Frequently Asked Questions (FAQ)
Q: Is XRP the same as Ripple?
A: No. XRP is the cryptocurrency; Ripple is the company that develops payment solutions using XRP and supports the XRP Ledger.
Q: Can I mine XRP?
A: No. All 100 billion XRP tokens were pre-mined at launch. New tokens cannot be mined.
Q: Why does an XRP wallet require 20 tokens?
A: The 20 XRP reserve prevents spam and ensures network stability when creating new accounts.
Q: Is XRP decentralized?
A: It operates on a decentralized ledger but relies on a curated list of validators (UNL), leading to debates about its level of decentralization.
Q: What happened with the SEC lawsuit against Ripple?
A: In 2020, the U.S. SEC sued Ripple for allegedly selling unregistered securities via XRP sales. The case is ongoing and has impacted exchange listings.
Q: Where can I buy XRP?
A: You can purchase XRP on major exchanges like OKX, Binance, Kraken, and others—availability varies by region due to regulatory factors.