XRP XRP

XRP is a cryptocurrency created to enable instant money transactions globally. Its main use case is RippleNet, a real-time gross settlement (RTGS) system that is faster, cheaper and more efficient than the existing systems used by banks to transfer money internationally e.g SWIFT.

The RippleNet platform is a private enterprise run by the company Ripple Labs but runs on the open-source distributed ledger technology XRP Ledger. 

This set-up creates confusion as most people conflate all of those three things, but importantly XRP is designed to be used with RippleNet, but any currency can be settled, and it doesn’t have to be part of an open-sourced ledger.

The XRP Ledger is open source, but isn’t a blockchain, and this has led to many people question whether XRP should be classified as a cryptocurrency.

The idea for XRP was first proposed way back in 2004 by Ryan Fugger but didn’t really progress until Bitcoin gained traction. In 2011 Jed McCaleb and Chris Larson took over the project and focus on the goal of creating a faster, cheaper, more scalable alternative to both existing digital assets such as Bitcoin and traditional fiat monetary systems such as SWIFT. 

The XRP ledger is maintained and run by its community, with the Ripple company being an active member - but crucially not a controller - of that community. Unlike most other crypto currencies XRP relies on validators to reach consensus on network transactions rather than miners in a proof-of-work system. 

Anyone can become a Ripple validator, but the list is currently made up of Ripple along with universities and financial institutions.

By not using proof-of-work transactions are quicker and costs can be kept down. This design approach enables XRP transactions to have an average process time of just 3-5 seconds which is its main value proposition, though this comes at the sacrifice of true decentralisation.  

As other cryptocurrencies migrate to offering proof-of-work XRP will face a different level of competition. Since December 2020, Ripple Labs has been engaged in a legal battle with the SEC who charged them with raising over $1.3 billion worth of unregistered securities. This has not only damaged Ripple’s reputation, it's also limited adoption and price growth. Ripple disputes this claiming the XRP is not actually a security but merely a medium of exchange. There are rumours that once this case has been settled Ripple Labs may look to go public through an IPO. 

Who is using XRP?

XRP averages over 1 thousand transactions daily with a daily active account high of over 70,000 making it a pretty sizable network but at the same time quite far off something like Bitcoin or Ethereum. 

Google trends indicate that interest in XRP peaked in 2017 during the bull market that saw it reach an all-time-high of $3.84 on January 4th, 2018. 

Price quickly collapsed however, and has only seen a recovery during April 2o21, driven by interest from retail investors in Asia pushing price back above $1, despite the threat of the SEC case. 

Australia leads the way in regional interest, with North America and the UK following closely behind. Like Bitcoin and Ethereum, interest in XRP is also spreading to other continents such as Africa with growing interest in Nigeria and South Africa. This suggests that general crypto knowledge is growing globally and further supports the hypothesis that Africa will be crypto’s next big breakthrough. 

XRP has a diverse list of validators that achieve consensus and allow the network to process transactions. These include universities such as the University of Kansas and the University of North Carolina along with defi finance projects Coil and Bitso.  

What is the size of the XRP network?

There are currently over 45 billion tokens in circulation with a total supply cap of 100 billion. Ripple the company owns just under 60 billion of the 100 and haven’t released all of them into circulation as of yet. Currently there are over 150 validators running on the XRP ledger with that number growing consistently since the project launched in 2018. 

What is the size of the XRP community?

XRP has over 150 official validators. Outside of this, Ripple has 548 full time employees with an engaged open-source community focused on the XRP ledger. The #XRP hashtag on Twitter gets over 10,000 hits per day, with the Ripple account having over 1.5 million followers. On Reddit the ripple community has over 300,000 members. 

These numbers show that the XRP community is one of the largest in crypto and that a substantial amount of people believe in the project. This will likely stand Ripple in good stead if indeed it decides to go public.  

How much XRP is traded?

As of May 2021 XRP has a trading volume of over $10 billion and a total market cap of over $66 billion. Binance, Houbi and bithumb are the biggest exchanges for XRP, with XRP/USDT (US Dollar Tethered) and XRP/KRW (South Korean Wong) being the biggest trading pairs. Currently XRP ranks #5 on coinmarketcap.com 

These numbers show that there are serious amounts of value transacted through the XRP ledger and so even though it may not be considered on the same level as Bitcoin and Ethereum it’s still an impressive crypto success story.