What Is Ripple (XRP)?

What Is Ripple (XRP)?

Digital currencies have been trending. They are being watched as closely as stocks of top-rated companies, and they have an increasingly significant impact on the economy. Everyone has heard about Bitcoin, which has become a symbol of the cryptocurrency phenomenon because of its incredible growth in the last few years. However, there are others as well.

You have probably heard about Ripple. Most people know it as a crypto token - Ripple (XRP), but it is also a mutual system for global payments that has a great mission behind it. And to make it clear and help you understand Ripple better, it is worth answering one simple question first - what is Ripple?

What is Ripple?

Ripple is a global system for intercurrent and gross payments created in 2012 by Ripple Labs. The main advantage of the network is that it allows mutual transfers anywhere in the world in just a moment.

This makes Ripple a very attractive choice for banks that rely on a real-time settlement system. In late 2017, it was announced that American financial giant American Express and Spanish-British group Santander gave their preference to the Ripple protocol for transatlantic transfers. More than 75 payment systems and 90 banks worldwide, including UniCredit and Standard Chartered, are also using this protocol.

Ripple was created as an alternative solution for the banking system. And it is a wrong assumption that it was intended to replace fiat money. To be more specific, the mission behind Ripple is to create a more innovative system that is going to replace SWIFT.

Therefore, Ripple's primary customers are banks that use the xCurrent software solution to make cross-border payments with real-time transfer tracking. Regular users can also use Ripple's digital currency for mutual payments. And it is the right moment to answer one more question - what is XRP?

So, what is XRP?

The definition of XRP refers to a proprietary Ripple network token developed and issued by Ripple Labs Inc. It is used to conduct transactions on the Ripple platform using different currencies. It is one of the products that Ripple Labs offers for use in the open-source XRP distributed ledger, with no additional permissions. As a decentralized platform, XRP does not need any intermediary to perform transactions.

The maximum issuance of coins is 100 billion. This number will never be changed. It is important to note that XRP was created before the creation of Ripple Labs Inc. The creators of XRP kept only 20% of the coins for themselves. They donated the remaining 80% of XRP to the Ripple platform.

Moreover, it is very easy for banks to influence the exchange rate. Large associations can influence XRP under the Pump and Dump scheme and by depreciating the currency thanks to exchanges, sharply "injecting" large amounts there.

The seventh place in terms of trading volume, with the third place in terms of capitalization, is a clear sign of currency control by a narrow range of companies. All this completely crosses out the thesis about XRP decentralization.

How does Ripple work?

Multiple selected computers, often called nodes, validate XRP transactions. The various nodes are listed in the "Unique Node List," and Ripple manages this list.

The various nodes determine which transactions are correct based on the number of "votes" the nodes give. It is an alternative solution to the standard consensus algorithms to verify transactions.

The system is based on trust. XRP states it is a cryptocurrency, but the Financial Services Agency of the USA believes XRP is a security.

How to mine XRP?

There is no such thing or definition as Ripple mining. Ripple originally had a fixed number of coins (XRP) and no built-in expansion under the rules of the Ripple protocol. Therefore, no new coins need to be mined. The total number of XRPs created is 100 billion, but Ripple controls the flow of XRPs.

This has drawn criticism from bitcoin supporters, who praise it for its centralized control over the creation or distribution of BTC. In response, Ripple announced its intention to freeze 88% of its XRP assets and sell one billion XRP each month.

Both the freeze and the steady stream will allow traders and investors to expect a certain level of predictability regarding the supply of this cryptocurrency.

Advantages and disadvantages of Ripple (XRP)

Before considering Ripple (XRP) to invest in, it is highly recommended to consider all the positive and negative aspects of dealing with it. So, we have prepared a table with the common advantages and disadvantages of this crypto.

Advantages of Ripple (XRP):

  • High speed of transaction. While a regular transfer takes up to four days, with Ripple, an international transaction takes no more than 4-5 minutes, and simple transactions take up to 3-5 seconds.
  • Low commissions. Transactions in the Ripple blockchain explorer network are the lowest (depending on the current rate of the cryptocurrency) and equal to $0.0002 (on average).
  • Ability to convert between currencies or other assets (e.g., precious metals, securities) with a single fee.
  • No risk of inflation. All coins are issued immediately after the launch of the project, so there are no new coins. Moreover, the combustion of the commission after the transaction leads to a decrease in the number of coins in circulation. This means that crypto is not afraid of inflation processes.

Disadvantages of Ripple (XRP):

  • Excessive level of centralization. The decision on the number of coins to be transferred for sale is made by the organization's management.
  • Pre-mining protocol. Ripple releases a certain number of coins each month (1 billion). Some investors are afraid that in one time the company will release more and it will cause the dilution of the value of the crypto.
  • High volatility. The cryptocurrency is extremely volatile: its value can skyrocket or suddenly go down.

How can you use Ripple and XRP?

Ripple is a global system of mutual payments that allows you to transfer almost any currency anywhere in the world in seconds. Compared to Ripple, traditional money transfer methods, like SWIFT or Western Union, seem outdated. Right now, Ripple is fully focused on working with banks, offering them a more efficient and cost-effective way to make real-time money transfers worldwide.

Ripple's native token XRP can be used as a digital currency. For instance, you need to exchange your euros and get US dollars. In this case, you can convert the euros into XRP and convert XRP into dollars. For the first time, the procedure seemed complicated. However, Ripple charges a small fee compared to banks. You can also use this cryptocurrency to send from one wallet to another. And this process is way faster than the traditional approaches.

Is XRP a good investment?

Although XRP has been affected by Ripple's legal strike, XRP is an independent token that can and does operate somewhat outside of Ripple's business model. Falling prices and tainted fundamental prospects may not paint a bright picture of XRP as an investment for some. It remains to be seen if XRP will recover and continue to grow with the rest of the cryptocurrency herd, but as investors look for value in undervalued assets, it does not hurt to do more research and form an informed conclusion.

What are the risks of Ripple (XRP)?

When deciding to invest in any cryptocurrency, it is essential to remember that no investment options are 100% guaranteed to make a profit. In the case of XRP, the main risk factors to consider when investing include the following:

  • The recent SEC lawsuit. Some companies have been forced to stop doing business with Ripple, and cryptocurrency exchanges have suspended support for XRP. Capitalization declined. Ripple's future fate is still unknown;
  • Most of the issued coins are owned by Ripple Labs. Unlike other cryptocurrencies, it is not wholly decentralized (which is the key characteristic of cryptocurrencies).

It is worth also remembering that investing always involves risk, and one of the golden rules of investors is - to invest as much as you do not care to lose.

How can you buy XRP?

It is always interesting to know how to buy Ripple (XRP). However, there is nothing complicated to doing this, and this process takes around a few minutes of your time. So, to purchase this crypto, it is necessary to follow the instructions mentioned below.

First and foremost, the only way to buy XRP is to find an exchange service to purchase this crypto. As a good example, you can use the services of Utorg, where the process of buying any crypto is straightforward and quick.

Secondly, on the website, you need to indicate the sum you want to invest (or want to have in XPR), your XRP Ripple wallet address, and Memo/Tag. Click on the button Buy XRP Ripple.

When you enter all the data mentioned above, you will be asked to verify your identity (if it is your first time). The verification process at Utorg takes a moment because the AI-based algorithm is in charge and processes all the data automatically. The procedure takes around three minutes.

Some services hide a fee that you need to pay. However, the situation at Utorg is slightly different because the total sum is displayed clearly, and you will not be charged additional fees.

Then, the service requires you to choose a payment method you would like to pay. Among them, there are over ten solutions available (Visa/Mastercard, GooglePay, ApplePay, etc.).

After completing this financial operation (in case of success), your balance will be credited to the deposited sum. Remember that XRP will come to your balance not instantly, and it is necessary to wait around 10-15 minutes.

And that is all that you need to go through. In general, purchasing crypto (including the verification process) does not take more than 5 minutes.


Ripple XRP is a global digital payment system that sacrifices decentralization for performance. The network and technology are owned and at least partially managed by Ripple, a private company that controls the underlying infrastructure, issuance, and some of the limited network validators. While Ripple deviates from the traditional decentralization model adopted by the leading cryptocurrencies, like Bitcoin and Ethereum, it conforms to some extent to its purpose-built infrastructure.