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XRP is the native token of the XRP Ledger and positions itself as a “fast and green” digital asset that was built “to be the most practical cryptocurrency for applications across the financial services space.” It offers fast transaction settlements, can handle thousands of transactions per second, and relies on hundreds of validators on its network.
The cryptocurrency aims to complement traditional payment methods, and allows regulated entities to follow strict money transmission laws. While more open blockchains like that of Bitcoin (BTC) allow anyone to contribute to the network and validate transactions, the XRP Ledger relies on approved validators.
All 100 billion XRP were distributed when the cryptocurrency was created, with some of the tokens going to its creators, and other being sent out through gifts and giveaways. A large percentage of XRP’s supply is held in escrow.
Who created XRP?
Several individuals were involved in creating the technology behind XRP and the businesses that helped it grow to become one of the largest cryptocurrencies by market capitalization.
Mt. Gox founder Jed McCaleb, Arthur Britto, and Chris Larsen are often credited for creating XRP. These three individuals have notable careers and were also the co-founders of OpenCoin, a fintech firm that rebranded to Ripple.
Other notable individuals involved included Stefan Thomas, a Bitcoin Core contributor and former Ripple CTO, David Schwarz, co-author of the Ripple white paper, along with Arthur Britto.
Ripple is one of the largest XRP Ledger players and is directly associated with the cryptocurrency. It plays a critical role in developing the XRP Ledger and its ecosystem.
What is Ripple’s relation to XRP?
Ripple is a for-profit company founded in 2012 under the name OpenCoin. OpenCoin rebranded to Ripple Labs in 2013, before settling on Ripple in 2015. The company’s involvement with XRP is “focused on building technology to help unleash new utility for XRP and global payments.”
Ripple promotes and uses the XRP token through its RippleNet product, which the company says offers connections to financial institutions worldwide and makes moving money “faster, cheaper and more reliable.”
RippleNet uses XRP to source liquidity for cross-border transactions. Its use eliminates the need to pre-fund accounts and is used by financial giants, including Santander, Bank of America, SBI Remit, Banco Rendimento, and others.
Where can you buy XRP?
The cryptocurrency is currently being traded on most top cryptocurrency exchanges, including Coinbase, Kraken, Bitfinex, Binance, and FTX. You can find out where to buy XRP on the cryptocurrency’s markets page on CryptoCompare.
Math-Based Currency A math-based currency, also referred to as a cryptocurrency, is a digital asset with verifiable mathematical properties, similar to how we can reliably verify gold as a substance made of atoms with 79 protons. Math-based currencies exist as digital assets in their own right and can be transferred directly between users (as fiat cash can be) without relying on a centralized protocol operator. XRP exists as a math-based currency on the Ripple protocol.
Abuse Protection The primary function of XRP is to protect the Ripple protocol against denial-of-service (DoS) spam attacks. Since the Ripple protocol is based around a shared ledger of accounts, a malicious attacker could create large amounts of “ledger spam” (such as fake accounts) and “transaction spam” (such as fake transactions) in an attempt to overload the protocol. This could cause the size of the ledger to become unmanageable and interfere with the protocol’s ability to quickly settle legitimate transactions.
Bridge Currency XRP has great value as a bridge currency. Because each gateway’s balances trade as distinct assets within Ripple, the number of potential currency pairings can become quite large. Instead of quoting every possible currency/gateway combination, XRP can serve as a useful bridge currency to enable these transfers. This is possible because if every currency is liquid to XRP, then every currency is liquid to every other currency:
The Ledger and Consensus The Ripple protocol is, at its core, a shared public database. This database includes a ledger, which serves to track accounts and the balances associated with them. The ledger is a distributed database — a perfect, shared record of accounts, balances, and transactions in the Ripple protocol. It is continually and automatically updated by the Ripple Transaction Protocol (RTXP) so that an identical ledger exists on thousands of servers around the world. At any time, anybody can review the ledger and see a record of all activity on the Ripple protocol. When changes are made to the ledger, computers connected to the Ripple protocol will mutually agree to the changes via a process called consensus. The Ripple protocol reaches consensus globally within seconds of a change being made. The consensus finding process is the engineering breakthrough that allows for fast, secure, and decentralized transaction settlement on the Ripple protocol.
The World’s First Distributed Exchange No one owns or controls the Ripple protocol. It runs on computers around the world, all working together to continually maintain a perfect, shared record of accounts, balances, and transactions. Distributed networks offer many efficiencies over centralized networks. Because the network is “self-clearing”, it eliminates the need for a centralized network operator (and gets rid of the associated layer of fees). Because there is no single point of failure, distributed networks are more reliable. They also tend to be more secure, due to their open source nature.
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