What is Ripple?

Ripple is a money transfer platform that allows you to pay bills, exchange different currencies and goods (precious metals, stocks, futures) in real time. The company seeks to work with banks, offering them a quick and safe method of conducting cash transactions.

History of creation

In 2004, Ryan Fugger, who lived in the city of Vancouver, wanted to develop a service that will allow people or communities to create their own currency.

In 2005, the RipplePay platform was released. The slogan of a product was the safety of the operations inside the community. Blockchain and decentralization were absent.

Blockchain came to Ripple along with lending expert Chris Larsen in 2011, who introduced confirmation of cash transactions by each client.

In 2012, the developers organized a company OpenCoin. A new payment protocol Ripple Transaction Protocol (RTXP) was completed. This allowed clients to transfer funds without commissions and transaction trails in banking systems.

In 2013, multimillionaire Jed McCaleb joined OpenCoin. He is known for development of eDonkey network and the largest bitcoin exchange – Mt.Gox. Jed McCaleb invited investors who invested in the creation of Ripple Labs Inc. The new project began developing an exchange based on the fundamental ideas of Ripple. Soon Ripple Labs Inc. made the system code public and developed its own cryptocurrency – XRP. With the help of created cryptocurrency, Ripple conducts transactions in banking systems. Reserve currencies play a similar role in the world financial system. Thus, the developers of Ripple didn’t plan to create XRP. They worked on creating an exchange on which transactions of various currencies are possible, as well as buying / selling goods and services.

In 2014-2018, Ripple continued to improve the code, connecting more banks from all the world to its technology.

The first bank that joined RIpple was Fidor Bank (Munich). It was in early 2014. Commonwealth Bank of Australia and Western Union joined in 2015. In 2016 such banks as among UniCredit, Royal Bank of Canada, Santander and Bank of America joined Ripple.The National Bank of Abu Dhabi signed the contract with Ripple, in 2017. Later, Ripple signed cooperation agreements with Asian banks. The offices of the company opened in Luxembourg, London, Mumbai, Sydney and Singapore.
In fact, Ripple invested in expanding the own network around the world for 3 years.

Principle of operation

Ripple's Principle of operation

The main idea of Ripple is to implement cheap and secure transactions in the word. The company maintains a common register of all transactions, which contains the details of the clients of network. This register can be copied and transferred to chain members for use, for example, by a partner of a bank. After execution of transactions all copies of the registry are updated through the central registry of Ripple. Then they are transferred to partners. As a result, all the participants in network always have the information in current form. There are many copies of the registry on the system, and it’s ready to create a new one ondemand. This approach ensures that the system doesn’t hang.


The Ripple platform works in such a way that transaction must go through 2 stages: data collection and payment execution. The collection of data implies the receipt of information by the beneficiary bank on the solvency of the correspondent bank, activity of accounts, availability of funds. The payment is performed by using cryptographic encryption of the online signatures of the transaction participants. For example, the user contributes money to Ripple system in his currency, they change it to the XRP. After this, the client sends them to recipient, and he withdraws funds in his currency. An interesting fact that the values for exchange in the Ripple system can be different – from ordinary currencies to minerals, stocks, etc. The main difference from the banking system in speed and cost – Ripple is faster than SWIFT-transfers, but at the same time cheaper. 14 servers around the world provide high speed operations.



Clients of the Ripple platform don’t need to use XRP for calculations. However, for each account, a stock of 20 reserved XRPs is required, which protects the account from spam. When you delete the wallet, cryptocurrency is lost.

The main features of Ripple cryptocurrency (XRP):

  1. XRP can’t be mined like other cryptocurrencies. Developers produced about 100 billion XRP, left themselves 61% of the volume, and released remaining 39% to the market. The project faced with distrust from investors: 100 billion tokens – too much to invest in them. To resolve this situation, Ripple in December 2017 froze 55 billion XRP in a separate storage and them inaccessible to open trade. At the same time, Ripple created a rule on which from January 2018 1 billion tokens will automatically enter the market every month until July 2022. Thus, the company has created an understandable and simple forecasting tool for investors on the market. It can be used to determine the price of cryptocurrency. The company also spends 300 million XRP monthly on various expenses.
  2. Ripple works on the so-called “gateways”. All trading operations passes through it. Their work provided by servers that are located in the company’s offices around the world.
  3. Processing of each transaction costs 10 drops or 0.00001 XRP. This amount disappears from the system after each transaction. Thus, the probability of hacker attacks decreases, and the price of the cryptocurrency increases.
  4. Reputation of the XRP cryptocurrency depends on the number of partner banks. In 2016, the growth of XRP cost was about 200% after the signing cooperation agreements with 20 banks.

Ripple compared to Bitcoin


Some analysts compare XRP to Bitcoin. Both cryptocurrencies have similar characteristics: open source, transactions are performed free of charge and anonymously. But at the same time, there are differences.

The main advantages of XRP:

  • The transaction speed is 4 seconds against more than 2 minutes for Etherium and more than an hour for bitcoins;
  • reversibility of transactions;
  • XRP is perfectly protected against hacker attacks or spam;
  • Ripple allows to exchange any currency or goods (for example, silver) with a unified minimum commission of 0.00001 XRP.

The main disadvantages of XRP:

  • Ripple strongly tied to the banking system;
  • high centralization (company owns 61% of сryptocurrency).

Below are detailed comparative characteristics of cryptocurrencies.

Comparison parameters XRP Bitcoin
Total number of tokens 100 billion 22 million
Quantity in circulation (*) 39 262 097 329 17 132 462
US dollar rate (*) 0,485547 6 707,38
Capitalization in USD (*) 19 063 593 572 114 913 932 970
Mining no yes
Transaction speed instantly more than 30 minutes
Ability to cancel a transaction yes no
Commission 0,00001 XRP average is $ 4.2
Decentralization partial full
Possibility of connecting payment systems XRP and other currencies only Bitcoin
Number of transactions per second 1500 4-15
Purposes Ripple aims to work with companies and banks Policy of minimum attraction of banks


On 2018, banks continue to implement Ripple’s protocol. Thanks to this, the price of XRP is consistently high with a capitalization of $ 19.38 billion (information is current as of July 5, 2018). By capitalization Ripple takes 3rd place, conceding only Bitcoin and Etherium.

Top 100 cryptocurrencies


Source: Coinmarketcap

XRP is currently available on 14 crypto exchanges, including Bitstamp, Kraken, Coinone, Bitso and others. There are special purses to store this cryptocurrency – Ripplex, GateHub and Ledger.

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