XRP is a digital resource designed for quick, low-cost international obligations and serves as the local bitcoin of the XRP Ledger, a fragmented, open-source bitcoin created by Jed McCaleb, Arthur Britto, and David Schwartz. As of January 2025, XRP is the second largest crypto by business liquidity, after Bitcoin and Ethereum, according to CoinGecko.
What is XRP?
Launched in 2012 alongside the Ripple Network, XRP has a maximum offer of 100 million cash and reached its final all-time large of$ 3.40 on January 7, 2018.
Unlike Cryptocurrency, which acts as a fragmented store of value or online gold, XRP was developed specifically to promote effective cross-border transactions, especially for financial institutions and payment providers.
The XRP Ledger operates independently as a decentralized semi-permissionless network of servers, even though Ripple (originally Ripple Labs ) uses XRP in some of its payment solutions and plays a crucial role in its ecosystem.
What is the operation of the XRP blockchain?
While blockchains like Bitcoin and Ethereum use proof-of-work and proof-of-stake consensus algorithms, respectively, the XRP Ledger utilizes a unique consensus protocol called the Ripple Consensus Algorithm to validate transactions where independent validators agree on transactions.
Without requiring any staking or proof of work, the Ripple Consensus Algorithm ensures network agreement. Each node uses a Unique Node List ( UNL ) of reliable validators to confirm transactions. In rounds of consensus, nodes propose transaction sets, adjust them based on their UNL’s votes, and finalize those with at least 80 % agreement. This prevents fraud while maintaining efficiency.
RPCA achieves Byzantine fault tolerance—resilience against faulty or malicious nodes attempting to disrupt consensus—while maintaining minimal latency, making it ideal for payments. By ensuring that all trustworthy nodes reach the same ledger state, it prevents forks. With rapid consensus rounds and strict participation rules, XRP delivers a fast, secure, and cost-effective transaction system.
Did you know?
On Crypto Twitter, Ripple and XRP have been used interchangeably for many years, much to the chagrin of the XRP community.
A quick rundown of XRP
- 2004- Ripplepay is a secure payment service that Ryan Fugger creates.
- 2011– Jed McCaleb, Arthur Britto and David Schwartz began work 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 its name to Ripple Labs.
- 2014 – The first bank starts using it to transfer money.
- 2015 – Ripple Labs rebrands to Ripple.
- 2016– Brad Garlinghouse becomes CEO of Ripple.
- 2017 – In December, XRP briefly becomes the world’s second largest cryptocurrency, with a value of$ 73 billion.
- 2020 – The XRPL Foundation is launched.
- 2020 – SEC vs Ripple: The U. S. Securities and Exchange Commission charges Ripple with selling unregulated securities valued at$ 1.3 billion via XRP sales.
- 2023 – A federal judge rules that the XRP token is not a security, except in the case of sales to raise funds from institutions.
- 2025 – The SEC appeals the July 2023 ruling regarding XRP sales to retail investors.
The SEC vs Ripple
The U.S. Securities and Exchange Commission sued Ripple Labs and two of its executives on December 22, alleging that they sold XRP to raise more than$ 1.3 billion as a result of an unregistered securities offering.
A federal judge decided in July 2023 that selling XRP to institutional investors was regarded as an unregistered securities transaction even though it was not a security when it was sold to the general public on digital-asset exchanges.
” The SEC has not established that Ripple’s failure to register the institutional sales caused substantial losses ( or the risk thereof ) to investors”, U. S. District Judge Analisa Torres wrote at the time.
In August 2024, Ripple was ordered to pay a$ 125 million fine for breaking investor protection laws, which is significantly less than the$ 2 billion the SEC had initially requested.
According to Ripple CEO Brad Garlinghouse,” This is a victory for Ripple, the industry, and the rule of law.” ” The SEC’s headwinds against the entire XRP community are gone,” Said the SEC.
In a cross-appeal filed in the United States Court of Appeals for the Second Circuit in October 2024, Ripple filed a lawsuit against several aspects of the decision in its dispute with the SEC.
Despite the partial ruling in Ripple’s favor, in January 2025, the SEC formally moved forward with its appeal, contesting the 2023 ruling that had dismissed key claims against Ripple.
What makes XRP unique?
- Ripple, a service for banks, assists financial institutions in moving money as XRP quickly and affordably through its Ripple Payments network.
- � � Bridges traditional banking and crypto – XRP acts as a bridge currency, facilitating the exchange between fiat currencies ( e. g., USD, GBP ) and cryptocurrencies.
- � � Fast 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 Ethereum’s 30 TPS.
- � � Low transaction costs – XRP transactions are much cheaper than traditional cross-border payment systems, making it an attractive option for financial institutions.
- ⚡ Energy efficient – Unlike Bitcoin, XRP does not rely on mining. Its consensus mechanism uses less energy, making it a more sustainable choice.
- � � Decentralized and peer-to-peer – While Ripple Labs plays a role in XRP’s development, transactions occur on an independent, decentralized network.
- � � Pre-mined – Unlike Bitcoin, which is mined over time, XRP was pre-mined at launch in 2012, with 100 billion XRP tokens created. In order to maintain liquidity and fund operations, Ripple Labs occasionally releases XRP from escrow.
How can I obtain XRP?
To acquire and store XRP, there are several options, including hardware, software, and cryptocurrency exchanges.
For customers in the United States, cryptocurrency exchanges, including Coinbase, Binance. US, and Crypto.com, also offer buy, sell, and trade options for XRP respectively.
Hardware wallets like Ledger and Trezor and software wallets, including Trust Wallet,  , Exodus,  , Edge, and Atomic Wallet, support XRP along with a range of other cryptocurrencies.
What is XRP capable of?
While it’s not generally seen as a tool to buy goods and services like Bitcoin, and the number of companies that accept cryptocurrency fluctuates, there are merchants that accept XRP as a form of payment, including crypto-friendly travel website Travala, and VPN services NordVPN, and SurfShark.
Did you know?
The smallest unit of XRP is known as a drop, while some once referred to it as the” Jed” after Jed McCaleb.
The future of XRP
Asset managers have been pursuing a new crypto investment product since the SEC approved the first Bitcoin ETFs in early 2024, with XRP emerging as a front-runner in the push for regulated exchange-traded funds.
The first spot XRP ETF, which would give investors direct exposure to the XRP token, was launched by Bitwise Asset Management in October 2024. Following Bitwise’s lead, 21Shares submitted an S-1 form to the SEC on November 1, 2024, proposing the 21Shares Core XRP Trust to track XRP’s price. Later that month, on November 25, 2024, asset manager WisdomTree filed for an XRP ETF in Delaware. The SEC approved the conversion of Grayscale’s XRP trust into an ETF in January 2025 by NYSE Arca.
Ripple President Monica Long told that she anticipates an XRP ETF to be” coming soon” in the days leading up to Donald Trump’s inauguration, which is widely regarded as a major turning point for cryptocurrency in the United States. Adding fuel to this speculation were images of Garlinghouse meeting with Trump in Washington, D. C., in January 2025.
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