Ripple (XRP) is a peer-to-peer powered cryptocurrency designed to work seamlessly with the Internet to allow a fast, direct and secure way to send payments on the web.

Ripple (XRP) is a system of the real time gross settlements (RTGS), exchange and money transfer system. Another name is Ripple transaction protocol (RTXP), or Ripple protocol. It is built upon a distributed open Internet protocol, consensus ledger and its own currency called XRP.



Ripple coin was first implemented in 2004 by Ryan Fugger, a Web developer in Vancouver, B.C., Canada. In 2005, Fugger began to build Ripplepay as a financial service to provide secure payment options to members of an online community via a global network. On the basis of this protocol, a new digital currency system appeared in May 2011, for which its own cryptocurrency XRP was issued.

This led to the development of a new Ripple system in 2011 by Jed McCaleb. It was designed to eliminate Bitcoin’s reliance on centralized exchanges, use less electricity than Bitcoin, and perform transactions much more quickly than Bitcoin.

Ripple cryptocurrency protocol was launched in 2012, its main goal is to ensure “secure, instant and almost free global money operations of any size without any chargebacks”. The protocol supports payment with fiat currency, cryptocurrency, goods or any other units like passenger bonus miles or mobile minutes.

As the transactions in this system are confirmed by the consensus of network participants instead of mining like in the Bitcoin network, it causes more trust of banks and payment networks. For example, the Ripple protocol is used by the Earthport service payment system, which is working in 65 countries, including the Bank of America and the HSBC bank.

Today, XRP is amongst the largest crypto currencies in the capitalization.


In Ripple, users make payments between themselves by using cryptographically signed transactions denominated in arbitrary real-world assets (dollars, gold, air miles, etc). To this end, Ripple keeps a ledger which records debts between users that trust each other. In this way, all assets are represented as debt. When a payment is made between two users that trust each other, the balance of the mutual credit line is adjusted, subject to limits set by each user. In order to send assets between users that have not directly established a trust relationship, the system tries to find a path between the two users such that each link of the path is between two users that do have a trust relationship. All balances along the path are then adjusted simultaneously and atomically.

Technological characteristics

ripplr technology

The Ripple protocol is based on an open shared database or ledger using the consensus process, which allows making payments, exchange or transfers of money in a distributed process.

In Ripple digital currency, users conduct transactions through cryptographically signed deals, nominated in hard currency or XRP. In the latter case, Ripple may use an internal ledger, while for payments in other assets, the Ripple ledger only keeps records – puts down the amounts owed according to the debt obligations.

To let a deal happen, two participants are needed: a regulated financial institution, where the clients’ money is kept, and hedge foundations or currency trading desks that provide liquidity that they want to trade in. To confirm a transaction, Ripple users have to specify other users whom they trust, and the amount. If there are no direct trust-based relations between users, the system searches for additional elements.

Ripple Cryptocurrency Mining

ripple mining

The Ripple digital currency system confirms transactions not with mining, but with a consensus of the network participants. Such an approach eliminates the dependence on centralized exchanges that are used in Bitcoin. Ripple also uses less electric power than Bitcoin while deals are carried out much faster.

XRP cryptocurrency

The XRP cryptocurrency exists only in the Ripple system. One XRP consists of a million of units called drops. At the beginning of the work of Ripple, 100 billion XRP were issued and the protocol rules prohibit new emissions.

At that, the users of the Ripple network don’t have to keep funds in XRP specifically; they can choose any other currency (that will be considered a debt instrument within the network). XRP is also used as a transitional currency for deals where a direct exchange between two other currencies is not available.

Today, XRP is on the 5th place in the capitalization of cryptocurrencies, yielding to Bitcoin, Ether, Bitcoin cash and IOTA. One XRP as of the beginning of October 2017 costs about $0.23.

Key advantages

  • Ripple coin is powered by mathematical algorithms and XRP obeys fixed rules that can never be changed. That’s what makes it secure and reliable. Because no person or organization controls XRP, it cannot be created, falsified, or duplicated. XRP payments are direct and peer-to-peer. XRP can be used without any third-parties, intermediaries, or other institutions.
  • Ripple XRP plays an important security service within the Ripple network. Every Ripple transaction destroys a tiny amount of XRP as a transaction commission. This XRP security cost is insignificant to any normal Ripple user – even extremely high-volume users will lose, at most, the equivalent of a few pennies. However abusive users who attempt to spam the network with excessive transactions will soon run out of XRP and be forced to stop.
  • Another security measure is the XRP reserve system. The XRP reserve is a minimum amount of XRP needed for actions that require network resources. These XRP reserves are negligible for any normal user, the equivalent of less than a dollar. However, attempts to overload the network with excessive actions become more costly.

The Account Reserve is a minimum amount of XRP needed to activate a ‘Ripple account. It prevents the creation of excessive accounts that could overload the network. The Action Reserve is a minimum amount of XRP needed for each action that requires network resources. For example, each open trust line or open order in the distributed currency exchange requires the action reserve

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