XRP is the currency used by Ripple, which is a cross-border payments company looking to compete with Visa and Western Union by using blockchain technology to overhaul international payments. The purpose of this guide is to explain how XRP works, how Ripple uses XRP, and how you can buy, trade, and store XRP coins.
Founded in 2011, Ripple Labs developed the Ripple Protocol, an open-source protocol which includes the XRP ledger, a payment solution for institutions (banks, non-financial institutions, and digital currency exchanges).
Originally known as OpenCoin, Ripple changed its name to Ripple in 2015.
Ripple Labs is a private company based in San Francisco, California, founded in 2012. Shares of Ripple Labs cannot be purchased.
Investing in XRP does not mean that you are investing in Ripple Labs, but rather a product that they have created.
With over 500 employees, nine offices worldwide, and (on average) 300% growth in customers, Ripple Labs is currently the world's largest software company.
RippleX is a software suite that developers and businesses can use to build on XRP. Besides interacting with the XRP Ledger, the platform includes tools for interacting with PayID and Interledger, two protocols developed separately from XRP.
Ripple and XRP are often used interchangeably, creating additional confusion.
Ripple Labs is a US-based company that has developed, issued, and partially managed the XRP cryptocurrency. As one of the many products in Ripple Labs' bundle, XRP was created with the idea of improving the efficiency of cross-border payments, particularly in the banking industry.
Digital currency native to the XRP Ledger, a permissionless, open-source distributed ledger that can settle transactions in as little as 3 to 5 seconds.
The instantaneous exchange of XRP makes it convenient for bridging two currencies quickly and efficiently without the need for an intermediary. As a currency exchange mediator, XRP is the main purpose of XRP
Ripple's technology: How it works
Currently, money can only be sent internationally via outdated or slow methods. A series of internal book transfers between financial institutions is the basis of today’s global payments infrastructure. As a result of these cross-system transfers with a low level of coordination, funds settlement is slow (often taking 3-5 days, trapping liquidity), error-prone (12.7% error rate), and costly ($1.6 trillion in system-wide costs for global cross-border transactions).”
Despite the fact that the global remittances industry is enormous, there is no well-organized, streamlined system for cross-border payments. Ripple seeks to address this problem. Instead of competing with Goliaths currently in this sector, Ripple plans to launch blockchain-based partnerships with major financial institutions around the world.
The Ripple global network promises to facilitate instant, secure, and cost-effective payments for financial institutions at any location around the world.