XRP: Anyone with a Dream can Succeed
Today, we will dive into Ripple (XRP), a virtual currency issued by Ripple Labs (formerly OpenCoin) that’s also known as Ripple Credits. As one of the top ten cryptos by market cap, XRP is held in great esteem when it comes to the history of cryptocurrency.
Chris Larsen, XRP’s co-founder, was born in the US. In 2012, he and Jed McCaleb, a developer at Mt. Gox (the world’s largest BTC exchange at the time) co-founded OpenCoin and set out to develop, operate, and maintain the Ripple P2P distributed network payment system. Prior to founding OpenCoin, Chris Larsen always had a dream: he wanted to bring financial information back to the general public, and XRP realized his dream.
Before we go into XRP, let’s first talk about Ripple, the network where it was born.
As the world’s first open payment network, Ripple is also a virtual currency network. Through this payment network, users around the world can transfer any currency and confirm the transaction within seconds, with almost zero transaction fees. In addition, Ripple does not charge fees for cross-bank/cross-border payments. With easy, convenient payments and withdrawals, the network has earned global recognition.
Ripple uses the same underlying crypto technology as BTC. Like Bitcoin, it is also a shared public database. Additionally, Ripple is a global ledger of receipts and payments. Its consensus mechanism allows all computers in the network to automatically accept ledger updates within seconds, without going through a centralized data exchange center. For Ripple, the fast-processing capacity is a huge breakthrough in engineering. It means that Ripple’s confirmation time is only 3~5 seconds, while BTC transfers take 40 minutes to confirm.
However, unlike BTC, Ripple is an Internet-based transaction protocol that allows people to pay in any currency. Here is an example: User A can make payments in US dollars vis Ripple, while User B can directly receive euros through Ripple. In other words, Ripple significantly simplifies the process of international payments and reduces the relevant costs.
Although many might think of Ripple as a latecomer, the project has a far longer history than BTC. Back in 2004, Ryan Fugger released the first version of Ripple and created RipplePay, the core idea of which is to build a P2P payment network that can replace the banking system.
The project survived and even achieved moderate success all thanks to Ryan Fugger. That said, Ripple’s user base was small back then, and the project was only popular in several isolated communities. That was the case because Ripple is based on connections and trust. For someone to transfer or borrow money via the network, he must know a friend who’s using Ripple. Otherwise, it would impossible for him to build trust with other users, which is why Ripple is far less famous than BTC.
In 2013, OpenCoin officially changed its name to Ripple Labs, and Chris Larsen served as the company’s CEO. That year, Ripple Labs launched XRP, the basic currency of the Ripple network. Meanwhile, the new version also introduced the Gateway system. XRP functions as the primary bridge currency and keeps the network secure, which requires all gateways in the protocol to hold a small amount of XRP.
Ripple has issued a total of 100 billion XRP. Like BTC, the over-issuance of XRP is also impossible. In addition, as each transaction burns a small amount of XRP, the total supply of XRP will gradually go down. XRP is used to pay a tiny fee for each transaction. It can be transferred between Ripple’s gateway nodes and swapped for any other crypto.
Compared to other types of electronic payments, XRP has its unique advantages:
1. Low transaction fees: Transactions between different fiat currencies usually involve a transaction fee that’s worth a few percent of the total transaction amount, but all transaction fees on Ripple are less than 0.01$;
2. Anonymity: The Ripple network does not require users to provide emails, names, or any other information, allowing consumers to enjoy a certain degree of privacy;
3. Enhanced security: Sending Ripple is like sending cash as there will be no other expenses after the payment is received. When paying with credit cards and checks, on the other hand, the payer must provide his personal information;
4. Reliability: Since Ripple transactions are irreversible, businesses can conduct transactions with anyone, without worrying about whether the other party might go back on his words.
XRP gave Ripple its wings. In 2014, XRP became the second largest crypto in the world, next to BTC, and Ripple Labs was listed as one of the 50 smartest companies by MIT thanks to XRP. Later, the company was named the world’s fourth Most Innovative Company in Money for 2015 by Fast Company as part of its annual Most Innovative Companies Issue.
Chris Larsen, the co-founder of Ripple Labs, also reached the pinnacle of his life: On January 4, 2018, Forbes estimated his worth at $59 billion, putting him ahead of Mark Zuckerberg and into the fifth place on the list of the world’s richest people. This also made him the first crypto billionaire on the list.
Although Chris Larsen has become a global public figure, he didn’t stop pursuing financial inclusion via the Internet. Chris once said that although Ripple might not be adopted by everyone in the world, it must be the first step towards a global currency system based on mathematics.
In February 2020, Ripple announced a tie-up with Azimo, one of Europe’s biggest money transfer services, and that it used XRP to move $24 million between the US and Mexico in a single week. XRP helps financial institutions free up capital that would otherwise be tied up as reserves to facilitate international transfers, which represents a big step towards fulfilling Chris Larsen’s dream of returning financial information to the general public.
What does the future hold for XRP? Could it help Chris Larsen realize his dream? Let’s wait and see.
For more information about Ripple (XRP), please go to:
Official website: https://ripple.com/
Block explorer: https://xrpcharts.ripple.com/
Market cap ranking: https://coinmarketcap.com/currencies/xrp/