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The Complete Story Of Ripple

Published days ago on July 31, 2020
By Anton Kovačić

All About Ripple

The most important fact about Ripple is it is a currency and a platform. The open-source protocol is designed to enable cheap and fast transactions. Ripple is different than bitcoin because it was never meant to be a single payment machine. Ripple may become the king of all international transactions. The currency of the platform is XRP, but the platform can be used to create currency through RippleNet.


RippleNet consists of payment providers including money services and banks. The institutions incorporate Ripple solutions for sending funds internationally and offering a smooth experience. A good example would be individuals located in three different states with interests capable of helping each other. The chances of these people finding one another using the current system are extremely slim. This would prevent what one person offers from helping another.

The first person may have coffee but is interested in football tickets. The second has a writing desk but is interested in coffee, while the third is willing to sell football tickets in exchange for a writing desk. In a Ripple universe, all three can be linked together so everyone acquires what they want. Interested parties can use the platform to make a payment with any currency such as bitcoin. The transaction has a minimum commission of $0.00001. The charge is for the prevention of DDoS attacks.

The Creators of Ripple

The creation of Ripple (XRP) originated in 2004 as a working prototype. The story began with Jed McCaleb in 2013. He created the EDonkey network and invited investors from all over the world to make an investment in Ripple Labs. Not only is Jed McCaleb the creator of Ripple, but he is also an entrepreneur and highly recognized programmer.

Jed McCaleb was the co-founder of numerous cryptocurrency startups including Ripple. eDonkey, Stellar and Overnet. He also started the Mt. Gox cryptocurrency exchange, although he sold his share prior to the famous hack after recoding by the new owner. When Mt. Gox was at its prime, more than 70 percent of all bitcoin transactions across the globe were being handled by the exchange.

Chris Larsen is a privacy activist, a business executive and an angel investor. He is believed to be the richest individual involved with cryptocurrency. He is highly recognized for co-founding numerous online financial services startups. He began in 1996 with E-loan, an online mortgage lender.

What is XRP?

XRP is simply a token for transferring value through the Ripple network. The idea behind Ripple was to act as a mediator for both fiat exchanges and other cryptocurrencies. XRP can be described as a wildcard or Joker because it is capable of replacing any of the other cards. If an individual is interested in exchanging euros for dollars, the commission can be minimized by exchanging euros with euros and dollars with dollars. The cost of the transaction on Ripple is $0.00001.

One of the most interesting concepts regarding XRP is the transaction fee of $0.00001. This is unable to be replenished after disappearing from the network. This means the world becomes poorer by $0.00001 after the completion of every transaction. The creation of this concept is intended to prevent attacks from spammers.

The Uses of Ripple

Ripple is basically a currency exchange with an extremely low commission. There are a lot of currencies where direct conversion is not possible. This is the reason the United States dollar is used by banks as a mediator. This doubles the commission of the bank because the currency must first be converted using United States dollars, then converted again for the desired currency. Ripple is a much cheaper mediator.

Ripple significantly increases the speed of international transactions. The average time required for a transaction is four seconds. Traditional banking systems require several days, with Bitcoin taking a minimum of four hours. Ripple is also an effective payment ecosystem. The individual can ensure a cheap and fast transaction by issuing their own currency. A good example is two collectors of fine wines creating a currency for seeing and purchasing wines between them.

What is RPCA?

RPCA is the Ripple Protocol Consensus Algorithm. The biggest difference between ethereum, bitcoin and Ripple is no blockchain is necessary for the latter. Many people do not understand how any cryptocurrency can be effective without a blockchain. Everything is maintained and transactions verified through the patented technology of Ripple or the RPCA.

A consensus means when all nodes agree with one another, there are no issues. The issue with this is every node must be in agreement before any action can be taken. This means until the issue has been determined, absolutely nothing is going to happen.

The Benefits of Ripple

Ripple was originally created as a payment system for day to day use. This is the reason Ripple is considerably more power safe than bitcoin. This means Ripple transactions are a lot faster and cheaper than bitcoin. Ripple initially began as an official organization. The main purpose was to assist financial institutions and banks. This means Ripple does not have nearly as many regulation checks as the majority of other cryptocurrencies.

Ripple can be easily exchanged for any valuables such as silver or gold or currency with a minimal and unified commission. There is currently a wide range of banks supporting Ripple. This includes:

  • Axis Bank
  • NBAD
  • Santander
  • UBS
  • Union Credit
  • Yes Bank
  • Westpac

Investing in Ripple

There is no such thing as an investment that is 10 percent safe. Every investment has some risks. In the case of Ripple, each investor must decide if the investment is suitable for their needs. The best way to accomplish this is by examining the pros and cons.

The Pros

  • As more and more banks begin using Ripple as a transaction platform, the value of XRP will continue to increase. If at some point in the future, all banks may decide to start using XRP as a unified currency as opposed to the redundancy of currency exchanges. At this point in time, all of the early investors in Ripple would earn a substantial fortune.
  • There is no inflation because the tokens already exist. XRP was initially mined.
  • Numerous banks have already placed their trust in Ripple because it is an official organization. Ripple is the only blockchain startup initiated by a no-name company.

The Cons

  • Although Ripple is both extremely smart and open source, once the code becomes accessible there is a high probability numerous individuals will attempt to hack the code. The issue is, a few of them may be successful.
  • Approximately 61 percent of all the coins are owned by Ripple Labs. Ripple is also highly centralized. Cryptocurrency was created with the purpose of eliminating centralized control. Since the tokens were all mined previously, the developers of Ripple can determine whether or not to release the coins and when. This aspect is similar to making an investment in a bank.

The Reasons Behind the Criticism of Ripple

Yes, there are a lot of extremely respectable banks currently supporting Ripple with even more planning to do so in the future. The majority of these banks are still in the stage of testing. The banks already using Ripple are using the platform for transactions involving real money as opposed to the token. Many people believe this questions the belief of the banks in the token.

Ripple has the ability to freeze transactions. The best example is when Jed McCaleb used his position as the founder of Ripple Labs to try to sell Ripple with a value exceeding one million dollars. According to some of the rumors, the contract was breached by Jed McCaleb. Just the possibility transactions can be frozen goes against all of the basic principles of cryptocurrency. The result is the criticism of Ripple.

The Future of Ripple

The experts have a lot to say about the future of Ripple. Some believe the potential will continue to increase as time passes. As more and more projects continue using algorithms for coding such as ETH and XRP, the next token or coin will most likely have to wait to see what happens. The market will require time to absorb the results. Even though there is no platform currently available for the exchange of fiat currency to XRP, this may change in the future.

Some of the experts view Ripple as a toy for the banks with a boost provided by the 2018 Recession. There are three key reasons experts believe the value of Ripple will increase. The first is the significant dollar volume dividing the cryptocurrencies in the top positions. The value of bitcoin is more than $191 billion, etherium $84 billion and Ripple at approximately $35 billion. The $49 billion gap must be closed before Ripple can take second place.

The second reason is Ripple is mainly used for daily spending and trading assets. As consumers become more aware of cryptocurrencies they are expected to want cryptocurrency used as currency as opposed to investments. The last reason is fiat currencies are unable to used for purchasing Ripple. In order to purchase XRP, another cryptocurrency must be purchased first.

Anton Kovačić

Anton is a finance graduate and crypto enthusiast.
He specializes in market strategies and technical analysis, and has been interested in Bitcoin and actively involved in the crypto markets since 2013.
Apart from writing, Anton’s hobbies and interests include sports and movies.