Basic Facts About Ripple Cryptocurrency (XRP)

Updated on April 28, 2020
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Doug is an active trader of stocks, bonds, and commodities, as well as an experienced non-fiction writer.

Maybe you have heard of Bitcoin or the term cryptocurrency. If so, you may also be aware that many of them have experienced rapid price increases in the last few years. One the latest coins to rise to prominence is called Ripple. It is a little different in the way it is set up compared to most of the other 1300 or so cryptocurrencies that currently exist. Ripple has the unique advantage of being designed to facilitate the transfer of money and other valuable digital commodities across the borders of countries in a quick and inexpensive manner. In this article, I introduce Ripple and explain some of its unique properties.

What Is Ripple?

Ripple is not a typical cryptocurrency—rather it is more of a digital payment protocol. Ripple operates on an open source and peer-to-peer decentralized platform that allows transfer of money in any form, whether it be another cryptocurrency, fiat currency (US Dollar, Yen, Peso…), commodity, or any other unit of value. Ripple shares a property that it is based on a shared, public database or ledger, which uses a consensus process that allows payments, exchanges, and remittance in a distributed process. The payment network can operate without Ripple Labs company support. Providing computer power to validate the network are companies, internet service providers, and the Massachusetts Institute of Technology.

XPR is the native virtual currency within the Ripple network. The XRP token is represented using six decimal position with the least significant position called a Drop. There were 100 billion XRP tokens created at the inception of Ripple and currently owns 61percent is held by Ripple Labs. The company has recently placed 55 billion tokens in an escrow and the plan to release one billion tokens each month. The lockup of the XRP tokens is designed to eliminate the concern that Ripple Labs could flood the market at any time. Currently, approximately 36 billion XRP exist within the marketplace.

Who Started Ripple?

Ripple Labs, Inc., the company behind Ripple, was formerly known as OpenCoin, Inc. and changed its name to Ripple Labs, Inc. on September 26, 2013. The company was founded in 2013 and is based San Francisco, California. Brad Garlinghouse is the CEO of the privately held company and often speaks publicly to promote Ripple and the company.

Ripple Labs has been successful in establishing partnerships with global banks which included Bank of America Merrill Lynch, Sontander, UniCredit, Standard Chartered, Westpac Banking Corp., and Royal Bank of Canada. To facilitate further development of the Ripple network and support existing customers, Ripple Labs has offices in San Francisco, Sydney, London, and Luxemburg

What Is the Purpose of Ripple?

Unlike Bitcoin and Ethereum, which function as digital money, Ripple was developed to solve the problem of transfer of money between countries. The existing system of international bank transfers takes days for the transfer and costs $50 or more. The use of Ripple allows the transfer to occur in seconds at a fraction of the cost. “XRP is not intended to be money in and of themselves,” remarked the software engineer and cryptocurrency expert, Pierre Richard. “They are more like a gift card or a token at Dave and Busters to use arcade machines.”

For Ripple to be an effective agent in the money transfer process it must be fast, and it is as it only takes about 4 seconds per transfer. Ethereum transfers take a couple of minutes and Bitcoin takes minutes to hours to make the necessary confirmations. Whereas a traditional international bank transfer money to a different country may take three to five days. So, any of these cryptocurrencies is definitely a much faster way to transfer money.

As well as being fast, the new money transfer protocol must be inexpensive. Cost per XRP transaction is extremely cheap at only $0.0004. BTC right now is the highest costing several dollars per transaction. The low cost is definitely an advantage for XRP.

Another useful feature of Ripple is the irreversibility of payments and transactions in general, resulting in the absence of charge backs. In the Ripple platform, it is extremely difficult to trace transaction to a specific user. While Ripple’s ledger is publicly distributed, the details of the payments are not public.

What Makes the Price of XRP Skyrocket?

The Ripple token, XPR, has had a crazy ride over 2017, starting out the year at $0.0065 and finishing the year at $2.30, and amazing 35,000 percent rise. The massive price increase has made Ripple the second largest cryptocurrency, second only to Bitcoin.

One of the factors driving the price of Ripple is the rumor that Ripple will soon be on of the cryptocurrencies traded on the largest cryptocurrency exchange in the United States, Coinbase. Currently, only Bitcoin, Ethereum, and Litecoin are bought and sold on Coinbase. With over 13 million users on Coinbase, if Ripple were added to their exchange, it could significantly boost the price of the XRP token.

Ripple Price Chart.
Ripple Price Chart.

Meet the New Ripple Billionaires

The skyrocketing price of XRP has created vast wealth for those lucky enough to own a large number of tokens when they only cost less than a penny each. One such newly minted billionaire is former CEO Chris Larsen, who now serves as executive chairman of Ripple. His 17% percent stake in the company now puts his net worth in excess of $37 billion. That puts him near the top of the Forbes 400 list of the richest Americans. The current CEO of Ripple, Brad Garlinghouse, owns a much smaller stake than Larsen but it is still enough to put his net worth in the billions.

Brad Garlinghouse, CEO of Ripple Labs, Inc.
Brad Garlinghouse, CEO of Ripple Labs, Inc.


Owning cryptocurrencies is risky business, as the price is very volatile. Don’t invest in any cryptocurrency without doing your homework and understanding the risks involved. Consult your personal financial adviser before investing your hard-earned money.


White, Abraham K. Cryptocurrency: Mining, Investing and Trading Bitcoin, Ethereum, Litecoin, Ripple, Dash, Gridcoin, Iota, Digibyte, Dogecoin, Emercoin, Putincoin, Auroracoin and Others. 2nd Edition. 2017.

Shin, Laura. “Meet The Crypto Billionaires Getting Rich From Ripple's XRP” Forbes. January 2, 2018. Accessed January 2, 2018.

Moore, Jack. “WHAT IS RIPPLE? CRYPTOCURRENCY PASSES MAJOR DOLLAR MILESTONENewsweek. December 24, 2017. Accessed January 1, 2018.

Duncan, Riley. “Ripple surges past Ethereum to become bitcoin’s new heir apparent” December 31, 2017. Accessed January 1, 2018.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.


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    • profile image

      Edward Walton 

      2 years ago

      Very useful article

    • dougwest1 profile imageAUTHOR

      Doug West 

      2 years ago from Missouri


      The world of finance is changing - rapidly! Brave new world.

    • Larry Rankin profile image

      Larry Rankin 

      2 years ago from Oklahoma

      Fascinating world.


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