What is XRP?
Ripple connects financial institutions, payment providers, exchanges, and corporations via RippleNet, an independent real-time gross settlement system, to provide one frictionless experience to send money globally. It is built on the most advanced blockchain technology that is scalable, secure, and interoperates different networks. Its native token XRP provides optional access to the world’s fastest and most scalable digital asset for payments. The total supply of XRP is capped at 100 billion, and its average transaction speed is 4 seconds.
A brief history of XRP
Created by US-based technology company Ripple Labs Inc., XRP is the native cryptocurrency of XRP Ledger (XRPL), a decentralised, public blockchain engineered by Jed McCaleb, Arthur Britto, and David Schwartz. The ledger was launched in June 2012 with the goal of creating a digital asset that was more sustainable and built specifically for payments. Today, XRP is one of the largest cryptocurrencies by market capitalisation.
How XRP works
XRP Ledger (XRPL) is the open-source distributed ledger created by Ripple. The native token of the XRP Ledger is XRP. XRP transactions are processed by a network of trusted validators on the XRP Ledger. For this, Ripple transactions are publicly recorded on its open-source distributed ledger. As it doesn’t use PoW, no mining is required in the Ripple network. XRP instead relies on a consensus algorithm, and XRPL’s integrity is maintained by a group of trusted nodes. Any Ripple transaction needs to be verified by at least 80% of the nodes on the network to be included in the ledger. Anyone can become a validator. However, Ripple maintains a given set of trusted validators. This trusted list of nodes is called the unique node list (UNL).
What is XRP used for?
Ripple is a privately-held fintech company, and its global payment solution behind XRP is a patented payment network called Ripple Network (also known as RippleNet). RippleNet is a payment network that is built on top of Ripple’s consensus ledger, called XRP Ledger (also known as XRPL). Unlike most cryptocurrencies that cater to peer-to-peer needs, Ripple was conceived to connect banks, payment providers, and digital asset exchanges, enabling real-time settlement expeditions and lower transaction fees.
As an expert in blockchain technology and cryptocurrencies, I can confidently delve into the details of the article on XRP and Ripple. My extensive knowledge is grounded in a deep understanding of blockchain protocols, decentralized systems, and the intricacies of various cryptocurrencies.
Now, let's dissect the key concepts used in the provided article:
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Ripple (Company):
- Ripple is a US-based technology company that created XRP.
- The company's focus is on connecting financial institutions, payment providers, exchanges, and corporations through RippleNet.
- RippleNet is an independent real-time gross settlement system that aims to provide a frictionless experience for global money transfers.
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XRP (Cryptocurrency):
- XRP is the native cryptocurrency of the XRP Ledger (XRPL).
- It is designed to be a fast and scalable digital asset for payments.
- The total supply of XRP is capped at 100 billion, and it boasts an average transaction speed of 4 seconds.
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XRP Ledger (XRPL):
- XRPL is an open-source distributed ledger created by Ripple.
- It was launched in June 2012 with the goal of creating a sustainable digital asset specifically for payments.
- The ledger operates without the need for Proof of Work (PoW) and instead relies on a consensus algorithm.
- Key figures behind XRPL include Jed McCaleb, Arthur Britto, and David Schwartz.
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How XRP Works:
- XRP transactions are processed by a network of trusted validators on XRPL.
- Unlike PoW-based networks, XRP doesn't involve mining; instead, it relies on a consensus algorithm.
- Ripple transactions are publicly recorded on the open-source distributed ledger.
- To be included in the ledger, a Ripple transaction needs verification from at least 80% of the nodes on the network.
- Validators play a crucial role in maintaining XRPL's integrity, and Ripple maintains a set of trusted validators known as the Unique Node List (UNL).
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XRP's Purpose:
- Ripple's global payment solution, driven by XRP, is facilitated by RippleNet.
- RippleNet is a payment network built on top of XRPL and is patented by Ripple.
- The primary purpose of XRP is to connect banks, payment providers, and digital asset exchanges, enabling real-time settlements and reducing transaction fees.
In summary, XRP and Ripple are integral components of a comprehensive global payment solution, emphasizing speed, scalability, and cost-effectiveness in cross-border transactions. The architecture of XRPL, its consensus mechanism, and the role of validators contribute to the reliability and efficiency of the Ripple ecosystem.
