What is XRP? A cryptocurrency created for the financial sector

XRP is a digitally active designed for fast, cheap global payments and acts as the original cryptocurrency of XRP LedgerA decentralized, open source blockchain created by Jed McCaleb, Arthur Britto and David Schwartz. From January 2025, XRP is the third largest cryptocurrency at market value after Bitcoin and Ethereum, according to CoingeCKO.

What is XRP?

The XRP was launched in 2012 with the Ripple network and has a maximum supply of 100 million coins and reached its last height of $ 3.40 on January 7, 2018.

Unlike Bitcointhat acts as a decentralized store with value or digital gold, XRP was developed specifically to facilitate effective cross -border transactions, especially for financial institutions and payment providers.

While Ripple (Originally Ripple Labs) utilizes XRP in some of its payment solutions and plays a key role in its ecosystem, XRP Ledger works independently as a decentralized Semi permit free network of servers.

How does the XRP blockchain work?

While blockchains like Bitcoin and Ethereum use proof-of-work and proof-of-stake consensus algorithms, XRP Ledger uses a unique consensus protocol called Ripple consensusal algorithm to validate transactions where independent validators agree on transactions.

The Ripple consensus algorithm Ensures network agreement without proof-of-work or stacking. Each node confirms transactions using a unique node list (UNL) of trusted validators. In rounds of consensus, nodes suggest transaction kits, adjust them based on their UNL’s votes and complete them with at least 80% appointment. This prevents fraud while the efficiency maintains.

RPCA achieves Byzantine fault tolerance – resolution against defective or malicious nodes trying to interfere with consensus – while maintaining minimal latency, making it ideal for payments. It prevents forks by ensuring that all honest nodes reach the same headbox mode. With fast consensus rounds and strict participation rules, XRP delivers a quick, safe and cost -effective transaction system.

A short story about XRP

• 2004 – Ryan Fugger develops Secure Payment Service RipplePay in 2004.
• 2011 – Jed McCaleb, Arthur Britto and David Schwartz began working on a new currency system inspired by Bitcoin.
• 2012 – Jed McCaleb, Chris Larsen merged their idea with Fugger leading to the creation of Opencoin.
• 2013 – McCaleb leaves Opencoin and the company changes the name to Ripple Labs.
• 2014 – The first bank starts using it to transfer money.
• 2015 – Ripple Labs redirects to Ripple.
• 2016 – Brad Garlinghouse becomes CEO of Ripple.
• 2017 – In December, the XRP short becomes the world’s second largest cryptocurrency with a value of $ 73 billion.
• 2020 – The XRPL Foundation is launched.
• 2020 – SEC vs Ripple: US Securities and Exchange Commission Fees Ripple with selling unregulated securities valued at $ 1.3 billion via XRP sales.
• 2023 – A federal judge decides that the XRP token is not a security except in the event of sale to raise funds from institutions.
• 2025 – SEC appeals the decision in July 2023 regarding XRP sales to retail investors.

Sec vs Ripple

On December 22, 2020, the US Securities and Exchange Commission filed a lawsuit against Ripple Labs and two of its leaders, claiming they had raised over $ 1.3 billion through an unregistered securities by selling XRP.

In July 2023, a federal judge gave up that XRP was not a security when he was sold to the public on exchanges of digital assets, although sales to institutional investors were considered unregistered securities transactions.

“SEC has not found that Ripple’s failure to register the institutional sales caused significant losses (or the risk thereof) for investors,” wrote the US District Judge Analisa Torres at the time.

After this, in August 2024, Ripple was ordered to pay a $ 125 million fine for violation of investor protection legislation, a significantly lower amount than the almost $ 2 billion that was originally sought by SEC.

“This is a victory for Ripple, the industry and the rule of law,” Ripple CEO Brad Garlinghouse tweeted At that time. “SEC’s headwinds against the entire XRP community is gone.”

In October 2024, Ripple filed a cross to appeal in the US appeal court for the second orbit, which contested several elements of the decision in his match with SEC.

Despite the partial decision in Ripple’s advantage, in January 2025, SEC formally went on with its appeal and contested the 2023 decision that had rejected key claims against Ripple.

What makes XRP unique?

• A service for banks -Ripple helps financial institutions move money quickly and cost -effectively as XRP through its Ripple Payments Network.
• Bridges traditional bank and crypto – XRP acts as a bridge balance and facilitates the exchange between Fiat currency (eg USD, GBP) and cryptocurrencies.
• Quick transactions -XRP transactions settle in 3-5 seconds, significantly faster than Bitcoin’s ~ 10 minutes. The network can process 1,500 transactions per Second (TPS) compared to Bitcoin’s 7 TPS and ETHEREUMS 30 TPS.
• Make transaction costs -XRP transactions are much cheaper than traditional cross-border payment systems, making it an attractive opportunity for financial institutions.
• Energy efficient – Unlike Bitcoin, XRP is not dependent on mining. Its consensus mechanism consumes far less energy, making it a more sustainable option.
• Decentralized and peer-to-peer – While Ripple Labs plays a role in XRP’s development, transactions occur on an independent, decentralized network.
• The front shin -Is contrast to Bitcoin extracted over time, the XRP was pre-induced at the launch of 2012, with 100 billion XRP tokens created. Ripple Labs regularly releases XRP from Escrow to finance operations and maintain liquidity.

How do you get hold of XRP?

To acquire and save XRP, there are several options including hardware, software and cryptocurrency exchanges.

For customers in the US, cryptocurrency exchanges, including CoinbaseAt Binance.usand Crypto.comAlso offers buying, selling and trading opportunities for XRP respectively.

Hardware -cartoons like Ledger and Trezor and software wallets, including Trust WalletAt ExodusAt Edgeand Atomic WalletSupport XRP along with a number of other cryptocurrencies.

What can you do with XRP?

Although it is generally not seen as a tool for buying goods and services like Bitcoin, and the number of companies accepting cryptocurrency swings, there are merchants that accept XRP as a form of payment, including crypto-friendly travel page Travalaand VPN services Nordvpn and Surfshark.

The future of XRP

Since SEC approved the first Bitcoin ETFs in early 2024, asset managers have run to expand cryptoin -investing products, where XRP emerges as a challenger in the pressure for regulated stock exchange -traded funds.

In October 2024, Bitwise Asset Management filed a registration declaration for SEC to launch the first place XRP ETF with the aim of giving investors direct exposure to the XRP tokenet. After Bitwise’s lead, 21Shares submitted an S-1 form to SEC on November 1, 2024, which suggested 21Shares Core XRP Trust to track XRP’s award. Later that month, on November 25, 2024, Asset Manager Wisdomtree filed an XRP Etf in Delaware. In January 2025, NYSE ARCA filed an application to SEC to convert Grayscales XRP Trust to a ETF.

In the driveway to Donald Trump’s inauguration in January 2025, which is seen by many as a major turning point for cryptocurrency in the United States, said Ripple President Monica Long Bloomberg That she expects an XRP Etf to be “coming soon.” Adding fuel to this speculation were pictures of the Garlinghouse meeting with Trump in Washington, DC, in January 2025.

This article was first published in 2019 and was updated in January 2025.