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  • XRP is a decentralized digital technology that powers the Ripple network and enables users to carry out transactions using fiat currencies and other major cryptocurrencies.
  • The currency has established a firm-footing in the cryptomarket and is consistently ranked among top cryptocurrencies based on its market capitalization.

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Common Questions About Ripple and XRP

Understanding cryptocurrencies, especially XRP may seem daunting to most people but just like all new things you are learning, a little time and patience, and willingness to understand a few tech terms can get you far in this game.   

XRP runs on a blockchain but there are still some differences between Bitcoin and Ripple. As a cryptocurrency with a large market cap (100 Billion Units) and huge adoption, it is crucial that we understand what XRP is, what it does, how it works, and other relevant questions. Here are a few commonly asked XRP questions.

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XRP: All you need to know before you invest

Ripple, a firm currently embroiled in dispute with the SEC regarding XRP being categorized as a security, is not responsible for creating XRP but leverages it within their network to facilitate payments. Recognised as a green blockchain technology, XRP is one of the top ten cryptocurrencies according to its market capitalization value. 

If you are planning to roll the dice and invest in XRP, we have curated an in-depth analysis of XRP, highlighting the major advantages and limitations of the popular digital technology. 

A deeper dive into XRP 

XRP is one of the globally renowned cryptocurrency tokens which was engineered to facilitate transactions from central databases regulated by certain financial organizations to a relatively open space while significantly reducing transaction costs.

Taking a look at its origin, the currency was launched by Jed McCaleb, Arthur Britto and David Schwartz. McCaleb and Britto were also involved in the creation of Ripple and used XRP to enable transactions on the payment network. You can buy these tokens to invest, exchange other cryptocurrencies or carry out other trading activities on Ripple. 

Today, XRP is well-positioned in the cryptomarket as a popular cryptocurrency owing to its high-speed, efficient and cost-effective transaction process. It is particularly a popular and budget-friendly choice for cross-border movements. 

According to Forbes Advisor, the total market capitalization of these tokens have crossed over $US 19 billion. The price of the currency at the outset of 2017 was only $0.006. However, its price has jumped to $0.40, witnessing a rise of 6400% despite a general decline in the cryptomarket, as of March, 2023. 

How does XRP function?

The innovative software that supports XRP is known as XRP Ledger. The software works in a unique way, allowing selected network participants to contribute to the computing power and verify the transactions, thereby maintaining network security unlike other blockchain technologies. Proponents strongly believe that this is a relatively preferred method to carry out transactions. 

During a transaction, XRP tokens utilize a consensus mechanism that involves various bank-owner servers. These permissioned servers create an efficient network of unique nodes that determine what type of transactions should be processed. The unique nodes ensure the completion of a transaction through a federated Byzantine agreement consensus. 

In simple terms, participants involved in the transaction should verify the proposed transactions are accurate by making comparisons against the latest version of XRP ledgers. In order to successfully complete the transactions, it should be accepted by the majority of the participants involved. 

Since the XRP ledger uses a highly trusted and secure design as compared to other industry leaders, it has raised concerns among critics who question the decentralization of the currency. 

Advantages of using XRP

Here are some of the key advantages of using XRP tokens:

  • Instant transactions: Ripple XRP-powered solution allows you to make instant transactions. It takes about four to five seconds to complete the transaction. It is incredibly fast when compared to banks which might take over days to verify a transaction or bitcoin network which could consume many hours to be verified and completed. Therefore, Ripple helps to enhance time-settlement and payment efficiency. 
  • Low transaction charges: The total charges to complete a transaction on Ripple using XRP tokens is only 0.00001 XRP. At current rates, the charges are equivalent to a small fraction of a penny.
  • Secure: XRP runs on a secure XRP ledger software which uses unique nodes to maintain network security. 

Risks of buying XRP

Take a look at some of the risks in buying XRP:

  • Concerns about being centralized: Many users worry that the currency is somewhat centralized due to its default group of permissioned servers and participants who regulate transactions. This goes against the philosophy of cryptocurrencies which aims to eliminate the traditional dominance of large banking institutions and financial sectors. 
  • Pre-mined XRP supply: The fact that pre-mined XRP supplies could be released at inappropriate timings could place an adverse impact on the currency’s value.
  • SEC vs. Ripple lawsuit: The long-running lawsuit between SEC and Ripple could also impact the currency’s value. 

How to use XRP and Ripple?

If you are wondering how to use XRP, the answer is very simple. You can use XRP for transactions and future investments just like other cryptocurrencies. You can create a wallet and use your currency. However, it is important to note that you should create a single wallet to avoid any extra costs. 

In the same vein, the Ripple payment network can also be used to carry out other kinds of transactions, like currency exchanges.

Instead of directly using a banking institution for currency exchange, you could, for instance, first exchange your U.S. dollars into XRP on the Ripple network before using them to buy euros. Instead of paying the hefty costs that banks and money transfer companies could impose, this option can be quicker and less expensive.

Is it a good idea to invest in XRP?

Like every other cryptocurrency, XRP has its fair share of risks. Therefore, investing in the XRP is not for you if you want guaranteed success and you can’t afford to lose your money. However, if you believe Ripple will be victorious at the end of the lawsuit like many other proponents, you should consider the potential as it becomes the only crypto with clarity. 

What is Ripple?

Ripple is a privately owned software company based in San Francisco, United States. The American-based firm was founded in 2012 and was originally referred to as OpenCoin before it was renamed Ripple Labs in 2015. The main objective for its establishment was to provide a user friendly interface for sending money using blockchain’s power.

The company mainly develops softwares used by banks and other financial institutions to facilitate fast and secure global financial transactions powered by the network underlying digital currency XRP. This platform is considered as one of the most successful platforms in the digital currency world because different large financial institutions have used it to carry out payments across borders.

Difference between XRP and XLM

By definition: Ripple is a privately owned software company based in the United with offices internationally. Some of these are in Sydney, India, Singapore, and Luxemburg

XRP, on the other hand, is an independent digital currency that acts as an underlying currency used to power the Ripple’s Network.

By objective: Ripples the main objective is to develop a user-friendly interface that can be used sending with ease and at an affordable cost worldwide. XRP is developed to acts as a bridge currency for facilitating cross-border transactions between various fiat currencies

By relationship: Ripple uses XRP in its xRapid and xCurrency products to provide banks and other financial institutions access to on-demand liquidity. XRP is a community-based cryptocurrency that is used by anyone, including Ripple.

By control: Ripple Labs are owned by individuals. For instance, the board members, founders and employers. These are the people who started the the company back in 2012. XRP is a decentralized virtual currency owned by anyone who is a registered user by either XRP or XRP Ledger.

By usage: Ripples develop and offer products that are mainly used in the financial markets by either banks or financial institutions. XRP can be used by anyone for various reasons; for instance, developers can build on the XRP Ledger.

XRP is an open source digital asset which is native to the XRP Ledger (Ripple Consensus Ledger, or RTL). Starting it’s life in 2004 as, Ripple Labs – previously OpenCoin, Inc. – has sought to develop XRP into a competitive international payment mechanism for regulated financial institutions and large corporations.

XRP as a bridge asset

A bridge asset is what makes it possible for XRP to operate in a system where each country has its own CBDC.

XRP is a universal bridge asset that will allow people to move value as quickly as we move data today, leaving behind the traditional banking system and reducing the need for foreign currencies on account of being able to use one universal currency worldwide.

The XRP digital currency offers fast transactions and low fees that can process 1500 transactions per second which makes it the best choice for processing international payments, remittances and micropayments in emerging markets such as Brazil, India or Nigeria.

What is a CBDC (Central Bank Digital Currency?)

A central bank digital currency (CBDC) is a type of centralized virtual currency that emulates most of the functions of a real national currency, but is issued by a central bank. This would be an alternative to paper currencies that are printed and distributed by government-controlled institutions.

Central Bank Digital Currencies (CBDCs) have been gaining interest lately because they give nations more control over their monetary policy decisions while also providing valuable information on economic trends so they can make better predictions about inflation rates or how to decide monetary policies.

The Bottom Line

Overall, XRP has achieved considerable success in the past few years despite severe challenges and downturn in the cryptomarket. It remains as one of the top-rated currencies according to its market capitalization.

XRP Social Media Resources

Over the years, I have come across numerous resources that have been tremendously helpful. Here are my favorite twitter and youtube channels so you can follow along the XRP journey.

Digital Perspectives:

Kevin Cage:

Digital Asset Investor:

Bearable Bull:

Crypto Eri:

Thinking Crypto:

James Rules XRP:

Wrath of Kahenman:

Michael (val5linkx):

Mack Attack XRP:

DJ Peter Vas:


XRP Crypto Wolf:

Attorney Jeremy Hogan:

Attorney John Deaton:

Patrick Moore
Patrick has been a part of the cryptocurrency community since 2014 and created CryptoWhat in 2015 to help new users learn more about cryptocurrencies. Despite not being a financial expert, his passion for cutting-edge technology drives him to share knowledge and information with as many people as possible about the potential of cryptocurrencies and how they will change the financial sector.