Ripple’s XRP were distributed at the time of Ripple’s launch and are more comparable to company shares than a true cryptocurrency. XRP coins do not compete with fiat money.
Unlike Bitcoin and other true cryptocurrencies such as Bitcoin Cash, Ripple’s network is more well-known than its cryptocurrency XRP.
Ripple was created to reduce money transfer times of 3-5 days to instantaneous and to significantly reduce the estimated $1.6tn in annual costs associated with global money transfers.
Ripple was co-founded by Jed McCaleb and Chris Larsen and released in 2012.
There is a finite number of XRP coins in existence, the total number being 100 billion, with all of the XRP coins pre-mined, in other words, released at the time of launch.
Ripple’s team owns the largest proportion of the coins, 61.3bn, with the vast number held in escrow to avoid excess market liquidity. 38.7bn XRP coins were distributed, with Ripple’s co-founders and senior management holding sizeable interests in Ripple.
Ripple is a peer-to-peer decentralized, open source public ledger created to facilitate the electronic transfer of money, whether fiat or crypto.
As Ripple’s XRP coins are pre-mined, there is no proof-of-work concept or mining, with Ripple transactions being validated on a consensus protocol.
The consensus protocol is where each individual node on the Ripple network votes on which transaction was made first to remove the possibility of double spending, the majority vote deciding the correct transaction to be recorded on the network. There are no coins rewarded in the verification process.
The electronic transfer takes place using a concept known as Gateway. Gateway removes the need for intermediaries such as financial institutions that charge sizeable fees for cross-border money transfers, by acting as a credit intermediary.
Gateway essentially both receives and remits funds between addresses over Ripple’s network.
All payments, both remittances, and receipts are recorded on Ripple’s network.
Some distinct characteristics of Ripple’s XRP coins and Ripple include:
- There are no physical Ripple XRP coins, only virtual.
- Unlike fiat currencies, where governments and central banks are able to print more money, there are a finite number of Ripple’s XRP coins.
- Ripple’s XRP coins are more comparable to company stock.
- The very nature of Ripple’s decentralized network means that the payment system runs 24-hours a day, with no downtime and has no restrictions on where and to whom funds can be remitted or received.
- Average transaction times are at around 4 seconds and transaction fees are equivalent to $0.004.
- Ripple is reported to handle over 1,500 transactions per second, 24/7.
- Ripple is not a blockchain.