What Is XRP?

One of the largest cryptocurrencies by market cap, XRP is used by financial institutions, corporations, and end users across the globe for fast payments. Read on to learn more about this altcoin.

Key Takeaways:

• XRP was developed originated to revolutionise cross-border payments.
  
• XRP is primarily used as a digital currency on the XRP Ledger to facilitate cross-border payments and remittances.
  
• XRP consistently ranks in the top ~6 market cap for cryptocurrencies around the world, providing liquidity for financial use cases.

What Is XRP Token?

XRP is a digital asset that’s native to the XRP Ledger — an open-source, permissionless, and
decentralised blockchain technology. Created in 2012 specifically for payments, XRP can settle
transactions on the ledger in 3–5 seconds. It was built with the aspiration to be faster, cheaper, and greener than older digital assets.

Users can buy and trade XRP in the Crypto.com App — read on for the step-by-step process below.

A Brief History of XRP

XRP is the native cryptocurrency of XRP Ledger (XRPL), a decentralised public blockchain engineered by Jed McCaleb, Arthur Britto, and David Schwartz. 

The XRP 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 Does XRP Work?

Instead of relying on miners or validators to validate transactions, the XRP Ledger, an open-source distributed ledger, uses a unique consensus algorithm called XRP Ledger Consensus Protocol. In this system, a network of trusted validators works together to validate transactions and reach a consensus on the state of the ledger. 

The primary objective of the XRP Ledger Consensus Protocol is to reach a consensus on a specific set of transactions to be added to the subsequent version of the XRP Ledger. These transactions are then applied in a clearly defined sequence, and the results are verified to ensure that all parties have arrived at the same outcome. Once this occurs without issue, the ledger version is considered to be validated and final. According to XRPL, the network can work with over 80% of trusted validators.

Each validator node on XRPL maintains its own Unique Node List (UNL), which consists of other validators it considers trustworthy to validate transactions. Each node can choose its own UNL, usually based on a default set provided by a trusted publisher. UNL is a critical component of XRPL’s security model, and it helps to ensure that the XRP Ledger remains as tamper-proof and resistant to attacks as possible. Anyone can operate a validator; currently, over 150 validators are active on the ledger, which is operated by universities, exchanges, businesses, and individuals.

What Is RippleNet?

RippleNet is Ripple’s payment network designed to provide a fast, secure, and cost-effective way to send and receive money globally. It consists of financial institutions and payment providers that use XRPL to facilitate cross-border payments, including banks, payment providers, and other financial institutions from all over the world.

What Is XRP Used For?

XRP primarily facilitates transactions on the network, serves to protect the ledger from spam, and bridges currencies in the XRP Ledger’s native DEX.

The main use cases for XRP include:

• Cross-border payments: XRP can be used to settle transactions on the Ripple network, allowing financial institutions and other users to send and receive payments in multiple currencies with possible settlement times of just a few seconds.

• Remittances: XRP can be used to send money across borders quickly — and potentially cheaply.

Additionally, Ripple is currently working with more than 20 countries on central bank digital currencies (CBDCs), having developed a CBDC platform that enables stability, security, and resilience based on the XRP Ledger. The CBDC Private Ledger is based on the same blockchain technology that powers the XRP Ledger. It also leverages RippleNet technologies and the Interledger Protocol (ILP) that enable payments across different ledgers and payment networks.

Conclusion

Designed to support businesses and builders, the XRPL is powered by XRP, a cryptocurrency that is often cited for its regulatory clarity. The XRP Ledger (XRPL) is a decentralised Layer-1 blockchain renowned for its decade-long reliability and stability in tokenizing and exchanging crypto-native and real-world assets.

Trusted by over 1,000 builders and businesses worldwide, the XRP Ledger offers institutional-grade functionality and built-in features to enable secure, efficient, and scalable financial services and use cases.

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