What Is XRP? The Cryptocurrency Created by Ripple Founders

Earn a free on-chain NFT by taking our free course, Crypto Investing: Fundamentals First.  Decrypt will cover gas fees for the first 10,000 mints!

XRP has soared in the weeks following he U.S. Securities and Exchange Commission’s decision to drop its suit against Ripple in October 2023. The investment watchdog organization had charged the Ripple Chief Executive Brad Garlinghouse and co-founder Chris Larsen in 2020 with an unregistered sales of securities, in the form of $1.3 billion in XRP.

Ripple is the project behind XRP, but the way it works and runs is very different from other currencies like Bitcoin and Litecoin.

It doesn’t rely on energy-intensive mining in order to work or create new currency.

Instead, the company it created its currency, called XRP all at once, and the people behind Ripple gradually sell it as and when they need to.

It’s also more focused on developing a method to help banks and other financial institutions move money faster and without fees rather than a way for people to buy goods and services.

Who Invented it?

The pre-cursor to the Ripple and its XRP currency as we know today was first developed by Ryan Fugger, a web developer in 2004.

But it wasn’t until 2012 – and the work of Jed Caleb and Chris Larsen – that lead to what we now know to be XRP.

A brief history

-💳 2004 – Ryan Fugger developed Ripplepay in 2004 – a secure payment service

₿ 2011 – Jed McCaleb, Arthur Britto and David Schwartz began work on a new currency system inspired by Bitcoin

-*💱2012 – Jed McCaleb, Chris Larsen and co merge their idea with Fugger leading to the creation of OpenCoin.

-🏗️ 2013 – Jed leaves OpenCoin and the company changes its name to Ripple Labs

-🏦 2014 – The first bank starts using it to transfer money

-💸 2017 – In December, XRP briefly became the world’s second largest cryptocurrency with a value of $73 billion

-2020 -XRPL Foundation Launched.

2020 – SEC vs Ripple: The U.S. Securities and Exchange Commission charges Ripple with selling unregulated securities valued at $1.3 billion, via XRP sales

2023: SEC drops the above claim against Ripple

What’s so special about XRP?

There are two parts to Ripple: Ripple as a cryptocurrency (XRP), and Ripple as a company designed to help banks move money quickly and cheaply.

🏦 It’s a service for banks – it has been helping banks connect to each other via its network.
💱 It bridges cryptocurrency and traditional banking – by using its own currency as a go between to exchange dollars and pounds in to cryptocurrencies.
💨 It’s super fast at moving money. It only takes 3.5 seconds for money to be confirmed, and can process 1,000 transactions per second, the same amount of transactions as Visa can. Bitcoin, by comparison can process just 7 transactions per second.
💸 It’s really cheap to move money – it’s a lot cheaper for banks to move money using Ripple than using existing technology.
⚡It uses less power – because no mining takes place, it’s more energy efficient
🎯It’s decentralised – it’s peer-to-peer

How is it produced?

Ripple doesn’t involve miners and nodes in the same way as other currencies. Instead, it created 100 billion Ripples at the point of inception and has been steadily selling them every month to help raise money.

How do you get hold of Ripple?

You can head over to an exchange and buy XRP with dollars, pounds or euros.

What can you do with Ripple?

It’s not seen as a tool to buy goods and services like Bitcoin or Litecoin. However, there are a few places that let you buy goods using Ripple’s XRP currency.

The future

Ripple wants to help the banking industry move money as quickly and simply as sending someone an email.

The company’s focus is to bring all the world’s big banks on to the platform.

The future of XRP meanwhile is less certain, but if Ripple does become the platform banks do business online it’s currency will be tied to that success.

This article was first published in 2019 and was updated on November 6, 2023.