What is Ripple XRP Crypto?

Ripple XRP is the native cryptocurrency token of the Ripple network. It is designed to rapidly transfer money between merchants and buyers who use different currencies. In this article, we delve into this popular altcoin and how it functions:

TL;DR

• Ripple XRP is the native cryptocurrency of the Ripple network, created for rapid, low-cost international money transfers between buyers and merchants using different currencies.
• The Ripple network was launched in 2013.
• Ripple operates on a decentralised ledger system, where independent computers validate transactions and maintain transparency.
• It helps financial institutions bypass traditional bank networks, reducing time and fees.
• Ripple Labs provides RippleX and an open-source version of its software to developers who want to integrate XRP payments into their programs and applications.

Who Created Ripple?

Ripple was created in 2013 by the company OpenLabs, though its origins date back even further. While Bitcoin, launched in 2009, is often credited as the first cryptocurrency, Ripple's roots can be traced to 2004.

• 2004: During this year, Ryan Fugger developed the first version of Ripple, called RipplePay.com, to enable people to create their own decentralised money.
• 2011: Jeb McCaleb developed a new cryptocurrency with a unique transaction verification process, which set it apart from Bitcoin. Unlike Bitcoin, which relies on mining, McCaleb's system uses a consensus mechanism involving all network participants.
• 2012: McCaleb and Chris Larsen took their project further by pitching it to Fugger, who gave them approval to proceed. This led to the creation of OpenCoin, which later became Ripple Labs.
• 2013: The Ripple network officially launched with its native cryptocurrency, XRP.
• 2015: Ripple Labs Inc. officially changed its name to Ripple, marking the full realisation of its vision.

How Does Ripple Work?

Ripple relies on independent computers around the world to monitor the history of each coin by maintaining a ledger of transactions. This is similar to how other major cryptocurrencies, such as Bitcoin and Ethereum, work.

Since it is not kept in a central location, this ledger style is called a decentralised ledger system. This decentralised system allows for increased transparency that banks rely on to send XRP to other registered financial institutions around the world. Now, banks can enjoy the benefit of a larger financial network, which they may not have had in the past.

For example, if a merchant in the US wants to sell a good or service priced in the United States Dollar (USD) to someone who uses the New Zealand Dollar (NZD), there may not be banks in these countries that have a direct relationship with each other. The traditional way of transferring money would have been to pass funds through a network of banks, which would have taken up time and collected fees along the way.

Ripple allows a bank or 'gateway' to streamline the process by changing the payer's local currency into XRP, Ripple's digital currency. It can then be changed back to the merchant's local currency just seconds later when it arrives at the receiver's gateway or kept as XRP.

How Much of Ripple Is Open Source?

Ripple Net is Ripple's main engine to connect global banks and financial institutions. They can use this platform to easily move money around the globe quickly and efficiently using Ripple's currency, XRP.

Protocols are determined by Ripple Labs, which also manages the network. This benefits financial institutions by reducing processing times, ensuring protocol transparency, and Ripple's active flagging of suspicious activity such as money laundering. While validators operate independently, Ripple Net's operations are centralised and not open to developers.

Ripple Labs offers an open-source version of their software to developers who wish to integrate XRP payments into their programs and applications. This service is RippleX and has open-source aspects.

Differing from other cryptocurrencies, Ripple's main services are focused on rapid international currency transfers. This means that while their networks rely on a decentralised ledger and active validators, they still retain control of how the network is used to ensure trust in their platform.

Ripple XRP Glossary

Familiarising oneself with the cryptocurrency terminology related to Ripple can help understand how it works. Here are some of the main terms to get acquainted with:

• RTXP - Ripple's Transaction Protocol.
• Centralised - A central governing body, such as Ripple Labs, which creates rules for the network.
• Consensus - When over 80% of validators agree to a transaction. This is a large differentiator from other blockchain technologies.
• Decentralised - A system that runs without an individual body controlling stakeholders or operators.
• Drop - The smallest unit of XRP. These are 6 decimal points and were defined as stopping potential spam or ill-intentioned transactions on the network.
• Gateway - A place to transfer local currency to XRP or to convert XRP into the local currency. This can be but is not limited to, banks and financial institutions.
• Mining - The act of validating transactions in exchange for a cryptocurrency coin. This is not available on the Ripple network.
• Node - A recognised validator on the Ripple network.
• Open Source - Part or all of a computer program whose code is made available to developers with the ability to change sections of the code as needed.
• Ripple Net - A software made for banking and finance institutions wishing to access the Ripple network.
• RippleX - An open-source platform which allows developers to add Ripple's payment system into their applications.
• Unique Node List (UNL) - A list of recommended validators on the Ripple network provided by Ripple Labs.
• Validators - Independent computers who manage the Ripple ledger and confirm transactions.
• XRP - Currency issued by Ripple Labs.
• XRP Ledger - A ledger that keeps records of each coin's transaction history.

Conclusion

Ripple XRP is a cryptocurrency with a clear focus on solving practical financial challenges. By connecting global financial institutions, it enables faster, cheaper cross-border transactions than traditional methods. Ripple's use of a decentralised ledger ensures transparency but with a unique twist, as Ripple Labs maintains control over the system's core operations. This centralised model ensures protocol consistency, security, and a reliable environment for financial institutions.

Although Ripple is not fully open-source in every aspect, its open-source platform, RippleX, empowers developers to integrate XRP payment features. With its unique consensus mechanism and bridge currency model, Ripple aims to revolutionise the way the world transfers money across borders.