XRP Digital Asset for Global Real-Time Payments

what is xrp

Ripple Labs agreed to remedial actions, including implementing the AML program and registering with FinCEN. Over the years, many issues have surfaced regarding XRP, within the crypto community and from regulatory bodies. In 2011, McCaleb, David Schwartz, and Arthur Britto started developing the XRP ledger as a recourse to the inherent limitations of Bitcoin. In 2012, when the XRP ledger was launched, it incorporated the native token XRP to aid its function.

  1. In May 2018, the community selected a new “X” symbol to represent XRP to differentiate it from the triskelion logo that had previously been used for both the company and the digital asset.
  2. Securities and Exchange Commission charged Ripple with selling unregistered securities in the form of XRP on cryptocurrency exchanges.
  3. Days later, on Dec. 22, the SEC filed a lawsuit against Ripple for selling XRP as an unlicensed security.
  4. This team of engineers was later joined shortly after by Larsen, who now sits as Ripple’s executive chairman and co-founder.
  5. “Mining” is the distributed verification system used by most blockchain-based cryptocurrencies.

We and our partners process data to provide:

The initial idea behind XRP from the onset was straightforward and was described as a peer-to-peer trust network. Ripple cites XRP as a faster, cheaper, and more energy-efficient digital asset that can process transactions within seconds and consume less energy than some counterpart cryptocurrencies. XRP is a cryptocurrency and token Ripple Labs uses to facilitate transactions on its network.

what is xrp

The SEC’s Lawsuit Against Ripple

The security and integrity of cryptocurrency makes it nearly impossible to counterfeit or double-spend. It is important to note that the mechanism behind transactions of XRP doesn’t require a transaction fee, which is a standard feature for most cryptocurrencies. Instead, it requires the sender to burn a tiny portion of the XRP, which positions XRP as a deflationary asset. For the SEC, the argument was whether XRP, the native token of Ripple, is a security—indicating a share in Ripple—or if it genuinely is a cryptocurrency like Bitcoin. The SEC noted that CEO Garlinghouse and co-founder Larsen have profited from selling their XRP during the bull market and garnering more than $600 million. Although XRP is often referred to as Ripple, it’s important to know that XRP is an open-source digital asset independent of Ripple, which is a technology company.

The XRP Ledger was designed with sustainability in mind.

The consensus mechanisms used in validating transactions are different. XRP uses a unique consensus mechanism that relies on trusted validators or a Unique Node List (UNL) that decides what transaction to consider for the next ledger. For transactions to become valid, most trusted validators need to agree. On the other hand, Bitcoin relies on miners to solve complex mathematical problems—using proof of work—in validating transactions.

Where Can I Buy XRP?

Leverage XRP as a bridge currency to facilitate faster, more affordable cross-border payments around the world. Use XRP to bridge two currencies to facilitate faster, more affordable cross-border transactions around the world. Being a deflationary asset allows the supply of XRP to run down to zero. However, it has been estimated it will take approximately 70,000 years at its current burn rate for that to happen.

There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Cryptocurrencies are compelling for investors and developers because no single entity can “pull the plug” on them and have them disappear. Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator.

In 2019, ahead of the SEC, some XRP stakeholders also filed a lawsuit (filed by XRP investors). This suit was based on the allegation that Ripple founders had an “intent to deceive or defraud” its investors. cryptopia estimates 9% of total assets stolen during january hack Some people in the Ripple community call the smallest unit of Ripple a ‘Jed’ after Jed Calab, one of the company’s founders. John Schmidt is the Assistant Assigning Editor for investing and retirement.

Days later, on Dec. 22, the SEC filed a lawsuit against Ripple for selling XRP as an unlicensed security. The agency claimed that distributing $1.3 billion worth of Ripple’s XRP token to its stakeholders violated its law. At the time, XRP was the third-largest cryptocurrency by market capitalization. Typically, XRP is created to serve as a settlement layer facilitating the transactions with the Ripple network. It has been traded as a cryptocurrency and is available on several exchanges, including futures, options, swap exchanges, spot exchanges, custodian exchanges, and non-custodian exchanges. 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.

For the native asset built into the ledger, the creators chose the ticker symbol “XRP” from the term “ripple credits” or “ripples” and the X prefix for non-national currencies in the ISO 4217 standard. The name “XRP” came to be used to refer to the asset in all contexts, to avoid confusion with the similar names for the technology and company, and eventually the company shortened its own name to “Ripple”. In May 2018, the community selected a new “X” symbol to represent XRP to differentiate it from the triskelion logo that had previously been used for both the company and the digital asset. In spite of its many controversies, XRP remains one of the top cryptocurrencies by market cap. It can be used just like any other digital currency, for transactions or as an investment. If you choose to invest, however, be sure that you don’t invest more than you can afford to lose.

As of the date this article was written, the author does not own cryptocurrency. The XRP ledger is scalable and can handle up to 1,500 transactions per second. Bitcoin’s transactions per second average https://cryptolisting.org/ between four and five, while Ethereum maintains about 13 transactions per second. The introduction of the Lightning Network that assists the Bitcoin blockchain solves its scalability problem.

David Rodeck specializes in making insurance, investing, and financial planning understandable for readers. He has written for publications like AARP and Forbes Advisor, as well as major corporations like Fidelity and Prudential. That added a layer of expertise to his work that other writers cannot match. The judge also ruled partially in the SEC’s favor, finding that off-exchange sales of XRP to sophisticated investors like hedge funds were unregistered sales of securities.

Facebook
Twitter
LinkedIn
WhatsApp

Related Posts

Leave a Comment

Your email address will not be published. Required fields are marked *

Get Curated Post Updates!

Sign up for my newsletter to see new photos, tips, and blog posts.

Scroll to Top