XRP is the native token for the XRP ledger and the Ripple payment platform. XRP is the cryptocurrency native to Ripple’s open-source blockchain platform. You can purchase XRP on international exchanges; however, U.S. exchanges have delisted or temporarily halted XRP trading. The Ripple payment platform enables fast and cheap cross-border transactions. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.
Ripple is a blockchain-based digital payment network and protocol with its own cryptocurrency called XRP. This is the native cryptocurrency of XRP Ledger, an open-source, public blockchain. You can’t mine XRP, but you can be rewarded for participating in the blockchain, buy it, or receive it as payment.
Initially, the ledger used digital assets called “ripples” and had the same currency code it does today, XRP. The network consisted of the Ripple Consensus Ledger, The Ripple Transaction Protocol, the Ripple Network, and the cryptocurrency used in the ledger, XRP. Full BioNathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
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Ripple states that its XRP Ledger platform can settle transactions in three to five seconds. When the ledger was developed in 2012, the developers placed a cap of 100 billion XRP on the token and gave 80 billion to a company now known as Ripple. Ripple’s XRP Ledger platform additionally acts as a decentralized exchange that enables XRP trading directly with peers.
In December 2022, Ripple posted its quarterly markets report and discussed the ongoing fight with the SEC in addition to developments over the year. Much of Ripple’s future success depends on the outcome of the SEC ruling—but it remains unclear how much longer the case will continue. Ripple calls it a “…campaign of regulation by enforcement without providing clarity to the market.”
She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands. The company then locked 55 billion XRP in escrow accounts to ensure XRP’s supply remained stable.
Concerns About Ripple
XRP is used as a settlement layer for financial institutions to make cross-border transactions faster and less expensive. The XRP consensus algorithm relies on trusted sub-networks—networks that are part of a larger validator node spread across geographies—to reach a consensus on transactions. Each node in a Ripple network trusts selected nodes that comprise its Unique Node List . This design aims to produce a consensus mechanism that a limited group of bank-owned servers can operate to confirm XRP transactions. A cryptocurrency is a digital or virtual currency that uses cryptography and is difficult to counterfeit.
Ripple is the company behind the blockchain, network, and ledger, and XRP is the native cryptocurrency of that blockchain. XRP is designed as a utility token for use within the Ripple blockchain and payment platform. It isn’t intended to be used as a cryptocurrency, but the investing and cryptocurrency communities use it for trading, holding, and exchanging.
You can hold your XRP and hope for gains, or use it in a purchase or exchange it for other crypto or fiat currency. While XRP wasn’t originally designed to be a security, derivative, or currency, it can be used as an investment because it is traded on several exchanges. One of the current cryptocurrency strategies investors use is buying and holding it as a long-term investment while waiting for it to increase in value.
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Ripple Labs, creator of the XRP cryptocurrency token, has been caught up in an SEC lawsuit for years. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Ripple has remained focused on its overarching goal of providing a fast global payment system through a pandemic and the following economic turmoil.
You can also use it as a short-term investment or for day trading, where you’d buy and sell it the way traders buy and sell stocks quickly to take advantage of small price changes throughout the day. Cryptocurrency exchanges are open 24 hours a day, seven days a week, so if you prefer to trade this way, you can do it at any time. XRP is primarily meant to serve as a settlement layer—the payment method—for international banking transactions, but it is also treated as a cryptocurrency by the community. XRP functions as a sort of informal money transfer network based on blockchain technology. You can stake your XRP and receive transaction fees, receive it as payment for services, purchase it from an exchange, or mine other cryptocurrencies and exchange them for it. Ether is the native cryptocurrency for the Ethereum blockchain and network.
Ripple
Ripple is a digital payment platform that uses blockchain technology and a native cryptocurrency to facilitate faster and cheaper global transactions. It can be purchased on several international cryptocurrency exchanges or given as a reward for staking XRP on the blockchain; however, exchanges in the U.S. do not list Ripple. XRP is the native token for the Ripple XRP ledger and is used to enhance currency conversion and international financial transfers. Ripple is a blockchain payment solutions company and cryptocurrency intended to speed up global payments at a time when clearing payments can take days.
The cryptocurrency exchanges that are allowed in the U.S. do not list XRP in response to an ongoing investigation by the Securities and Exchange Commission . Ripple is the company behind the blockchain technology that powers XRP payments. In 2012, the XRP Ledger was created by crypto enthusiasts and entrepreneurs who had a vision of a faster international payment system.
Is XRP a Good Cryptocurrency?
It is used to pay transaction fees and as collateral by network validators. Today, Ripple has evolved into RippleNet, a union of all of its products and services that facilitates global transactions and reportedly reduces the cost of payments. While the legal proceedings of the case are ongoing, many cryptocurrency exchanges have responded by restricting or withdrawing support for XRP. Most exchanges that list XRP are not allowed to operate in the United States.
The outcome of the Ripple case is being closely watched by the investing and cryptocurrency communities. Swell is Ripple’s annual conference for leaders in the cryptocurrency space. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.