What Is Ripple?

Formerly known as OpenCoin, Ripple is a privately held company that is building a payment and exchange network (RippleNet) on top of a distributed ledger database (XRP Ledger). The main goal of Ripple is to connect banks, payment providers and digital asset exchanges, enabling faster and cost-efficient global payments. (https://academy.binance.com/en/articles/what-is-ripple)

Who is Jed McCaleb?

Jed McCaleb
Founder of Ripple,Stellar

Jed McCaleb is an American programmer, entrepreneur and philanthropist. He is a co-founder and the CTO of Stellar. Prior to co-founding Stellar, McCaleb founded and served as the CTO of the company Ripple until 2013. McCaleb is also known for creating Mt. Gox, and the peer-to-peer eDonkey and Overnet networks as well as the eDonkey2000 application.

In January 2018, it was reported that McCaleb’s Ripple token ownership was worth $20 billion, which would put him at 40th place in Forbes‘ list of world’s richest people.

What is Ripple Net?

RippleNet offers connections to hundreds of financial institutions around the world via a single API and makes moving money faster, cheaper and more reliable for you and your customers. It also helps you reduce, even eliminate, the need to pre-fund accounts with On-Demand Liquidity (ODL)—a service that uses the digital asset XRP to source liquidity during cross-border transactions, as an alternative to traditional systems.

Bank of America, American Express, Santander use Ripple Net


What is XRP ?

XRP is a cryptocurrency designed as an alternative to Bitcoin, with a focus on facilitating trustless, instant and cheap cross-border payments. Like Bitcoin, XRP relies on a public ledger, called XRP Ledger, for storing transaction details.

However, the payment network built on the ledger does not utilize mining to validate and record new transactions. Instead, the XRP Ledger requires trusted validator nodes to reach consensus in record time and maintain the transaction ledger — roughly every 3 to 5 seconds. These trusted nodes are collectively called the Unique Node List or UNL.

Therefore, unlike Bitcoin and its proof-of-work consensus protocol, the XRP Ledger utilizes a consensus mechanism based on the Federated Byzantine Agreement (FBA) model.

Since the XRP ledger does not require mining, its native token, XRP, was premined at a very early stage of its development. A total of 100 billion XRPs were premined and launched in 2013. Today, over 46 billion of the total XRP supply is in circulation. Note that in addition to XRP it is possible to transact with other currencies in the Ripple ecosystem.

Before we dive into the history of this digital asset, it is important to know the difference between XRP, Ripple and RippleNet. As discussed earlier, XRP is the ecosystem’s native token. RippleNet, on the other hand, is the digital payment network that runs on the public distributed ledger, called XRP Ledger. Ripple is a for-profit company that controls the development and marketing of RippleNet. 


What is Ripple? (XRP, IOUs, Gateway and Validators Explained) 99 Bitcoins, December 2018


Founded in 2012

To realize the vision for the Internet of Value

SBI Ripple Asia Formed

To accelerate the commercial use of blockchain in Japan and Korea

Interledger Protocol (ILP) Launches

To ensure interoperability among all blockchain and legacy technology

RippleNet Committee Formed

To create and maintain a rulebook that ensures operational consistency and legal clarity for every transaction

100+ on RippleNet

More than 100 financial institutions join RippleNet

On-Demand Liquidity (ODL) Commercially Available

Customers on RippleNet use XRP to source liquidity on-demand

200+ on RippleNet

More than 200 financial institutions join RippleNet

RippleX Established

To build infrastructure and help innovative blockchain projects grow

UBRI Established

To support and accelerate academic research, technical development and innovation in blockchain, cryptocurrency and digital payments

MoneyGram Uses ODL

To power their RippleNet transactions between the U.S. and Mexico

300+ on RippleNet

More than 300 financial institutions join RippleNet

Azimo Uses ODL

For faster international payments into the Philippines

Source: https://ripple.com/company

The idea behind Ripple and its native token predates the crypto industry and Bitcoin itself. In 2004, John Fugger launched a peer-to-peer (P2P) financial network called RipplePay. The goal was to capitalize on the financial relations between network participants to eliminate the need for banks. In essence, if participant A trusts participant B, then B can act as a third-party whenever A wants to transact with another participant trusted by B. 

This concept would later serve as the cornerstone of the crypto model that Jed McCaleb — an early Bitcoin pioneer and founder of Mt. Gox exchange — proposed as an alternative to Bitcoin back in 2011. McCaleb concluded that Bitcoin mining was an excessively resource-hungry and expensive system that would eventually undermine the usefulness of Bitcoin. And so he approached Fugger with a plan to evolve RipplePay into a crypto network. In 2012, Fugger officially handed over RipplePay to McCaleb and Chris Larsen — a serial entrepreneur and today, Ripple’s executive chairman. 

Shortly after the handover, the team started building the first iteration of Ripple, called OpenCoin. Subsequently, the company’s name changed twice between 2012 and 2015. Notably, the project also underwent a series of cultural and systemic changes. The most significant was the switch to the Ripple Gateway system.

Recall that Ripple had initially opted for a peer-to-peer architecture. In the course of evolving their ideas, the team came to believe that reputable businesses, of a sufficient size, would be needed to ensure users’ trust. These businesses are what Ripple calls Ripple Gateways. This change in architecture marked a sharp shift towards a hybrid system that combines traditional banking structures with a peer-to-peer network. 

This combination would later prove to be pivotal to the project’s popularity in the traditional financial sector, as established financial institutions viewed it as a less unfamiliar route into engaging with the crypto and blockchain industry. 

Ripple, the for-profit company headed by Chris Larsen, soon began to secure high-profile partnerships and the number of financial institutions using RippleNet to facilitate cross-border payments began to steadily increase. 


Building Revolutionary Solutions with XRPL

The characteristics of the XRP Ledger and its native digital asset XRP include superior speed, low cost, scalability and sustainability. These allow developers and entrepreneurs to seamlessly transform existing applications and unlock entirely new user experiences across payments, identity, foreign exchange, digital media and many other industries.

Benefits of XRP Ledger:

Fast: 3-5 seconds to settle

Low Cost: $0,0002/transaction

Scalable: 1500 transactions per second

Sustainable: Environmentally sustainable (negligible energy consumption)

Source: https://ripple.com/ripplex

How Does XRP Work?

XRP was created by Ripple to be a speedy, less costly and more scalable alternative to both other digital assets and existing monetary payment platforms like SWIFT.

RippleNet’s ledger is maintained by the global XRP Community, with Ripple the company as an active member. The XRP Ledger processes transactions roughly every 3-5 seconds, or whenever independent validator nodes come to a consensus on both the order and validity of XRP transactions — as opposed to proof-of-work mining like Bitcoin (BTC). Anyone can be a Ripple validator, and the list is currently made up of Ripple along with universities, financial institutions and others.(https://coinmarketcap.com/currencies/xrp/)

What is Ripple? XRP Explained for beginners , Binance Academy video
The Power of Ripple Net


In short, xRapid is an on-demand liquidity solution that uses XRP as a global bridge currency between multiple fiat currencies. Both XRP and xRapid rely on the XRP Ledger, which enables faster confirmation times and much lower fees when compared to conventional methods.

Let’s take a simple example. Bob from Australia wants to send $100 to Alice who is based in India. Bob transfers the money via a financial institution called FIN. In order to perform the transaction, FIN uses the xRapid solution to create a connection with asset exchanges in both the originating and destination country. This way, the company is able to convert Bob’s $100 to XRP, which provides the necessary liquidity for the final payment. In a matter of seconds, the XRP is converted to Indian Rupees and Alice is able to withdraw the money from the asset exchange located in India.


xCurrent is a solution designed to provide instant settlement and tracking of cross-border payments between RippleNet members. Unlike xRapid, the xCurrent solution is not based on the XRP Ledger and does not use the XRP cryptocurrency by default. The xCurrent is built around the Interledger Protocol (ILP), which was designed by Ripple as a protocol for connecting different ledgers or payment networks. 


SEC(The Securities and Exchange Commission) vs RIPPLE


XRP which is a cryptocurrency , SEC claims that it is a security and Ripple sells it illegally to investers. They claims that XRP has not been registerd.

SEC Charges Ripple and Two Executives with Conducting $1.3 Billion Unregistered Securities Offering;


Nine years ago a startup that would eventually be called Ripple Labs came onto the fintech scene with a promising plan to provide financial institutions with fast, low-cost clearance of trans-border money transfers. To make it happen, the company set up a network on which transactions sped across the globe in the form of a cryptocurrency called XRP, which was specially created for the task.

As the case drags on with no clear resolution yet in sight, Ripple’s legal woes have become emblematic of the murky regulation enveloping digital currency, reflecting the mismatch between laws largely developed during the Great Depression and today’s burgeoning fintech ecosystem. While opinions differ on whether the SEC has a strong case against Ripple, almost everyone agrees that the underlying problem is a lack of clarity over how cryptocurrency can be regulated in ways that don’t sabotage the industry or unfairly target companies and investors who may have had little way of knowing they were running afoul of regulators. “It’s now been more than a decade since this new asset class has been around, and we’ve yet to start focusing on creating regulations targeted to it,” said Carol Goforth, a professor at the University of Arkansas School of Law who studies cryptocurrency. Here’s why crypto investors are watching this case so closely and what it could mean for the rest of the industry.


July 29, 2021 www.fortune.com

In the link below there is an interview between Robert Hackett and Ripple CEO Brad Garlinghouse. The CEO explains the details of the case.

Interview with Ripple CEO Brad Garlinghouse by Jeff John Roberts


There is another article written by Jeff John Roberts in decrypt.co website. which is a very comphrensive and detailed article.


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