Ripple is a global network created to facilitate low-cost, ultra-fast, borderless transactions for a range of businesses, individuals, and even financial institutions. The ecosystem is built around the network’s native asset, called XRP, which also acts as a crucial bridge currency for transfers of value from fiat currencies or other cryptos.
XRP was originally called Ripple Labs Inc. and leverages a unique consensus mechanism in its blockchain to validate transactions with blinding speed. This removes the need for centralized intermediaries, cuts transaction fees, and makes settlement in real-time possible. In short, Ripple hopes to revolutionize how money moves through financial networks. Let’s get into the details.
What is Ripple?
Ripple is the name typically given to the company Ripple Labs, the network, RippleNet, and sometimes the network’s native cryptocurrency, XRP. Ripple was founded in San Francisco with the mission of replacing the slow and often costly wire transfers for international transactions with ultra-low-cost and near-instant digital asset transfers. The Ripple network is the bridge that facilitates movement between traditional finance network infrastructures and newer blockchain technology, purpose-built for real-time transaction settlement and liquidity management.
Instead of relying on a proof-of-work model, like Bitcoin, or a proof-of-stake model, like Ethereum, Ripple uses a unique consensus protocol that leverages independent validators for transaction confirmation. This specific consensus mechanism allows a high transaction throughput rate and substantially lower fees than many other networks. This offers big benefits for firms like banks and remittance service providers.
What is XRP?
XRP is the native token of the Ripple network and is designed to serve mainly as a bridge asset. Unlike Bitcoin or Ethereum, XRP was pre-mined, meaning all one hundred billion tokens were created from the outset.
Using XRP on the Ripple network, institutions can transfer different currencies, convert them into XRP, and settle those funds in another currency, all within seconds. On top of that, XRP’s specialized verification process uses independent validations, giving it far more agility than other cryptocurrencies.
How does Ripple Work?
Ripple operates as a payment protocol that enables rapid, low-cost transactions across its network. This design eliminates the need for energy-intensive block creation and allows for high throughput with minimal fees.
With the elimination of various intermediaries, Ripple significantly reduces friction and value loss in the cross-border payments industry. The Ripple network supports multiple fiat currencies, cryptocurrencies, and many tokens while keeping a very user-friendly experience overall.
Source: Ripple.com
Advantages and Disadvantages of the XRP Cryptocurrency
Advantages of Ripple
Fast Settlement – Transactions finalize within seconds, making it highly efficient for international transfers.Low Transaction Fees – Minimal fees enable cost-effective cross-border payments compared to traditional banking channels.Energy Efficient — Ripple’s consensus mechanism requires less computing power than proof-of-work systems, reducing environmental impact.Strategic Partnerships: Major financial institutions collaborate with Ripple, adding credibility to the network and its native token.Multi-Currency Support: XRP bridges different currencies, enhancing liquidity and simplifying conversions in diverse markets.
Source: XRPL.org
Disadvantages of Ripple
Centralization Concerns – Some critics argue that Ripple Labs’ ownership of XRP tokens and validation nodes undermines complete decentralization.Regulatory Uncertainty – Ongoing legal battles and evolving crypto regulations in different regions may affect XRP’s adoption.Escrowed Supply – Large amounts of XRP held in escrow by Ripple Labs create questions about supply dynamics and market influence.
The SEC vs Ripple
One of the biggest perceived risks with XRP has been the ongoing conflict between Ripple and the US Securities and Exchange Commission. In 2020, the SEC filed a lawsuit alleging that Ripple Labs violated investor protection laws by selling XRP to investors.
Ripple Labs has consistently denied these claims. The company maintains that XRP functions solely as a digital asset for international value transfers, instead of any security that the SEC regulates. Breaking news at the time of writing, March 19th, 2025: the SEC has announced that it’s dropping its suit against Ripple.
What Makes XRP Unique?
XRP stands out from other cryptocurrencies due to its focus on fast, low-cost, cross-border payments, as well as its unique consensus type. Instead of serving as an alternative store of value or a speculative asset, XRP was created to bridge international currencies and streamline liquidity management for payment networks and banks.
Ripple Labs has also built partnerships with financial institutions to help build credibility and practicality. That said, the large pre-mined supply and the ongoing escrow mechanism have both attracted and concerned investors, depending on their perspectives on decentralization versus institutional backing.
Source: Ripple.com
What Can You Do with Ripple (XRP)?
XRP brings a long list of practical uses from both the crypto-focused and traditional finance spaces. Through rapid, nearly free transactions, XRP can bridge various national fiat currencies to create smooth, international payments.
This is a crucial feature for both individuals sending money from one country to another, as well as banks and institutional investors that want to cut operational expenses while settling their transactions in seconds instead of hours or even days. Small businesses could also benefit from simplified remittances and streamlined daily transactions.
Not only that, but the unique consensus mechanism in place helps cultivate broader adoption by lowering energy consumption and transaction fees. Payment providers can integrate XRP into their networks, which offers their users improved transparency and lower fees.
Some investors use XRP to manage liquidity on an individual scale, using the token to swap from one currency to another or between cryptocurrency assets easily and quickly. Others simply explore XRP as a more immediate and affordable store of value compared to options like Bitcoin, viewing the recent increase in value as just the beginning.
Source: Ripple.com
How to buy XRP
Here’s a quick rundown of how to buy XRP.
First, you’ll need to choose a platform that supports XRP. Most of the top cryptocurrency exchanges, like Binance, Kraken, and Coinbase do.Once you’ve picked a platform, create an account there and go through any KYC or account verification that may be needed.After you’re verified, fund your account by depositing fiat currencies or transferring crypto from an outside source.Search XRP trading pairs based on what you’ve used to fund your account. For instance, if you’ve transferred in BTC, you’ll want to find a BTC/XRP pair if you can, to cut down on fees for multiple trades.Once you’ve found your trading pair, create an order to buy XRP. If you want to spend a specific amount, you’ll want a market order; if you want to pay a specific price, create a limit order.Confirm your order and place the trade. Once the order is filled and the trade is complete, you can move your XRP from the platform to a more secure custodial wallet.
How to store XRP
To store XRP, you’ll need to use a wallet with support for the XRP ledger. Some of the options for software wallets include Trust Wallet and Exodus. More secure hardware wallet options like Ledger and Trezor are available as well. If you have a wallet already, skip to the next step.Now that you have a wallet chosen, you need to create a backup of the wallet and store it securely. Always keep your private keys, seed phrases, and other wallet recovery information secured where only you have access.If you’ve bought or traded XRP on an exchange, you will need to enter your wallet address and initiate a withdrawal. If someone is sending you XRP as an individual, there should be appropriate send & receive provisions in your wallet of choice. Remember to always check addresses before confirming, crypto transactions can’t be reversed.Once the transaction has been completed, check your wallet to verify your updated XRP balance.
The Future of XRP
Like many other cryptocurrency assets, the future of XRP is optimistic but still a little shaky. The health of XRP largely hinges on the outcome of regulatory challenges and the question of large-scale adoption by banks and payment providers. If big banks and payment networks integrate Ripple’s technology, XRP could gain even more legitimacy and even higher liquidity.
However, ongoing legal challenges and market volatility make it obvious that there are still risks associated with the asset. No matter what, supporters are excited about XRP’s potential to revolutionize traditional finance networks and the possibilities it holds for the future of crypto.
FAQs
Is XRP a good investment?
Just like most other cryptocurrencies, proponents of XRP see it as a good investment, but the investment potential for each individual will depend on what their goals are and their level of risk tolerance.
Can XRP reach $10?
With the value of XRP hovering around $2.50 as of March 19th, 2025, and the 52-week low being $0.38, it has seen incredible growth in just the past year. $10 may be possible in the next few years for those with optimism.
Is XRP better than Bitcoin?
“Better” is a difficult metric to define, particularly since they each serve wildly different purposes. Bitcoin is typically thought of as digital gold, while XRP is a token that is used to bridge currencies and power the Ripple network.
How much is 1 XRP worth right now?
As of March 19, 2025, XRP is trading at roughly $2.50.
What is the average transaction fee on XRP?
For most transactions on the XRP ledger, the transaction fee is 0.000010 XRP, or 10 “drops”. At current prices, you could send thousands of transactions for a few cents.
Who created XRP?
Initially, XRP was originally by developers Arthur Britto, Jed McCaleb, and David Schwartz. Together they eventually co-founded Ripple Labs to further expand the network.
