XRP is a digital asset that serves as the native token of the XRP Ledger, an open source distributed ledger. The ledger and its token target frictionless settlement of cross border payments and multi-currency exchange. Traders also treat XRP as a store of value and as a vehicle for speculative profit.
Ripple, a San-Francisco-based software company, incorporates XRP and the XRP Ledger into RippleNet, a network that routes payments among banks, payment providers along with corporates.
XRP launched in 2012 after David Schwartz, Jed McCaleb in addition to Arthur Britto released the XRP Ledger. The protocol generated one hundred billion units of XRP at inception. No additional issuance occurs – all tokens were pre mined. Each ledger close confirms transactions in three to five seconds. The network consumes less electricity than Bitcoin because it replaces proof-of-work with a consensus protocol that relies on a list of trusted validators.
Ripple owns large quantities of XRP but does not control the token or the ledger. The codebase remains open source under the permissive ISC license.
Important
In 2011 McCaleb, Schwartz next to Britto began coding the XRP Ledger to overcome Bitcoin’s throughput limits, probabilistic finality, and energy demands. The ledger went live on 2 June 2012. Chris Larsen joined the team weeks later and incorporated OpenCoin to steward protocol development and business adoption. The project kept the name Ripple, yet the ledger and the token operated independently of any single company.
The design goal mirrored Bitcoin’s original intent – move value across borders without counter party risk, delay, or excessive cost. The project, however, courted regulated financial institutions from day one. Retail users retain open access, yet the protocol’s feature set – payment channels, issued currencies, decentralized exchange – caters to treasury desks and remittance operators.
The 2012 release comprised four tightly coupled components – the XRP token, the Ripple Consensus Ledger, the Ripple Transaction Protocol, and the Ripple peer-to-peer network. Over time the branding narrowed to âXRP Ledgerâ for the network and âXRPâ for the asset.
OpenCoin rebranded to Ripple Labs in 2013 and to Ripple in 2015. The company continued to contribute code, run validators, publish reference implementations. The protocol itself stayed open-source and censorship-resistant.
In September 2020 the XRP Ledger Foundation launched in Singapore. Coil along with Gatehub provided initial funding. The foundation coordinates grant programs, maintains documentation, and operates a validator cluster.
Token Distribution
The genesis ledger created one hundred billion XRP. The allocation followed a three part scheme.
Eighty billion XRP transferred to Ripple. Fifty-five billion of those tokens moved to a cryptographically escrowed schedule that releases one billion XRP each month. Unused portions return to the tail of the queue. The remaining twenty billion XRP split among the founders.
No mining rewards exist. Transaction fees do not enrich validators – instead, each transaction destroys a small quantity of XRP. The burn rate ranges from ten drops (0.00001 XRP) for simple payments to several hundred drops for complex multi signature or escrow operations. The mechanism imposes a long term deflationary pressure on supply.
Fast Fact
RippleNet’s On-Demand Liquidity service uses XRP as a bridge currency to eliminate pre funded nostro accounts. Exchanges list XRP in spot, futures, options in addition to swap contracts. Custodial and non-custodial venues both support the token.
Fast Fact
The ledger labels XRP as deflationary because each transaction permanently removes a fraction of the token from circulation. The metric refers to on chain supply mechanics, not to purchasing power relative to fiat currencies.
Consensus Mechanism
The XRP Ledger employs the Federated Consensus protocol. Each server operator selects a Unique Node List (UNL) of trusted validators. A new ledger version becomes final when more than eighty percent of the chosen validators publish matching transaction sets. The process repeats every three to five seconds. In contrast, relies on proof-of-work. Miners compete to solve SHA-256 puzzles – the first to find a valid hash adds the next block. Confirmation latency averages ten minutes and scales with hash rate competition.
Cost, Speed next to Energy Use
A standard XRP payment incurs a fee of 0.00001 to 0.0001 XRP and settles irreversibly in three to five seconds. The network consumes roughly 0.0079 TWh per year, equivalent to the output of a small wind farm. Bitcoin’s proof-of-work consumes around 150 TWh per year, and median confirmation times exceed ten minutes. Transaction fees on Bitcoin fluctuate between one and fifty USD depending on mempool congestion.
Scalability
The ledger processes 1,500 on chain transactions per second under continuous load. Payment Channels push the ceiling higher. Two parties lock XRP into a channel, transact off-chain, settle net balances on chain when the channel closes. The technique permits tens of thousands of transfers per second without burdening the consensus layer.
