Ripple and its cryptocurrency XRP have been steadily climbing up the cryptocurrency charts. I’m going to break down in today’s post exactly what Ripple is, even touch upon the question “Is Ripple a good investment and how is it different?

Ripple is both a platform and a currency and that is the first thing you need to know. The Ripple platform is designed to allow fast and cheap transactions and is also an open-source protocol.

Ripple is definitely going to rule all the international transactions worldwide, unlike Bitcoin that was never intended to be a simple payment machine. Pretty ambitious, but who knows? Maybe in a few years, currency exchanges will disappear as Blockbuster stores did.

The platform has allowed everybody to use the platform to create their own via RippleNet, even if it has its own currency (XRP).

What Is Ripple and Why Was (XRP) Created?

A form of digital money purpose-built for payment networks and banks is named Ripple. On RippleNet, the cryptocurrency is a native token. RippleNet is built on top of the XRP Ledger, which is decentralized and open-source blockchain technology. RippleNet is a payments system run by Ripple Labs. With an average transaction settlement speed of four seconds, the payments system boasts fast transaction speeds. Comparably, 3,600 seconds is the transaction settlement time on the Bitcoin network. 

When compared with the cryptocurrency ecosystem, the idea behind Ripple is older. In 2004, Ryan Fugger is credited with conceptualizing a decentralized real-time gross settlement (RTGS) system. Jed McCaleb and Chris Larson expanded the idea and created OpenCoin, the precursor to Ripple, later in 2012

what is ripple

A blockchain-based payment system that would target financial institutions as its primary clients were described by McCauley and Larson, in the OpenCoin whitepaper. The founders created a company called Ripple Labs, and hired Brad Garlinghouse as the CEO, to run the payments system, after being renamed, Ripple.

Cross border payments were one of the areas where Ripple had an immediate impact. To streamline transactions, the developers created RippleNet.  Consumers and businesses often suffer losses arising from exchange rate differentials, as well as suffer the inconvenience of having to convert between currencies, When transacting in fiat currency. To streamline the exchange of fiat currency without suffering slippage, RippleNet uses the XRP token as a go-between. 

Moreover, digital currency enables faster settlement of transactions at speeds that is unseen in the traditional payments sectors. Ripple users enjoy micro-fees where the average fee is $0.0003403, Due to the utilization of the peer-to-peer transaction system. In the legacy payments sector, RippleNet’s competitors such as VISA charge thousands of times higher. 

What is XRP

For representing the transfer of value across the Ripple Network, XRP is a token used. To be a mediator for others – both cryptocurrencies and fiat – exchanges is the main purpose of XRP. Joker’ is the best way to which XRP can be described. the card that can be any other card, but Not the creepy Batman enemy. It can be dollar with dollars and euro with euros to minimize the commission if you want to exchange dollars for euros. The transaction cost on Ripple is $0.00001, as highlighted above.

An interesting fact:  the amount of $0.00001 ‘disappears’ from the platform after the transaction and can’t be replenished. So, the world becomes $0.00001 poorer with every transaction. It is formulated that way to avoid spammers attacks.

Who created Ripple (XRP)

Back in 2004, the protocol as a working prototype was created. But the real history starts in 2013 when the creator of the EDonkey network Jed McCaleb invited a bunch of world rank investors to invest in Ripple Labs.

Who created Ripple

How Does Ripple Work?

Before anything else, a digital currency that pulls its strength from blockchain technology is Ripple. Either through Proof of Work (PoW) or Proof of Stake (PoS) mechanisms, most blockchain platforms obtain consensus. Unlike the PoS system that supports faster validation of transactions while consuming less power, the PoW system is slower and consumes more power.

However, in this case, another form of consensus called the Ripple Protocol Consensus Algorithm (RPCA) is utilized by blockchain platforms like XRP Ledger. Simply how nodes in a blockchain network maintain agreement and correctness is the Consensus. Through the more than 150 nodes that make up the global XRP Community, the RPCA runs. 

Seven years of stability, which has enabled its developers to expand the product range of the ecosystem has been given to Ripple by the consensus system. For instance, in such a way that it offers on-demand liquidity to its enterprise clients, the developers have been able to expand RippleNet’s capacity. Global payments are made faster and cheaper by this. 

What is Ripple used for

  • Low commission currency exchange. Many currencies can’t be directly converted to each other. So, the US dollar is used as a mediator by the banks. So, converting currency A to USD and USD to currency B, there is a double commission. Ripple is much cheaper than USD, but also a mediator too.
  • Fast international transactions. 4 seconds is the average transaction time. Compare it to a few days for a regular banking system and an hour or more for Bitcoin.
  • Payment ecosystem. For fast and cheap transactions, users can basically issue their own currency. For example, one can see vintage vinyl or action figures between the collectors and create a currency to buy.

What are Ripple’s benefits?

  • As a day to a day payment system, Ripple is originally designed, so it is much more power safe than Bitcoin. So the transactions are a much cheaper and quicker result.
  • As its main focus is to be used by banks, Ripple has started as an official organization. So unlike many other cryptocurrencies, it is not a subject of multiple regulation checks.
  • With a unified minimal commission, Ripple has the ability to be exchanged to any currency or valuable (like gold).

Is Ripple a good investment?

Disclaimer: each decision has its risks and there is no such thing as a 100% safe investment. It is up to you to decide in each case. However, some pros and cons are mentioned below to help you.

Ripple a good investment


  • As highlighted above, Ripple is not another Blockchain startup from a no-name company, but an official organization with the trust of many banks.
  • No inflation. All the tokens are initially mined and already exist.
  • The higher the value of XRP when the more banks use it as their transaction platform. It will make a nice fortune for all the early birds who invested in Ripple, if one day, all the banks decide to start using it as a unified bank currency instead of processing redundant currency exchanges.


  • It is highly centralized. avoiding centralized control is the whole idea of cryptocurrency. The Ripple developers can decide when and how much to release, or not to release, as the tokens are already mined. So, it is basically like investing in a bank.
  • In addition to centralization, as Ripple Labs owns 61 percent of the coins, today it is pretty much a monopoly.
  • It is open source – very smart, but still, there is a good chance many people will try to hack it when the code is accessible. Some of them even might succeed.