What Is Ripple. Everything You Need To Know

The first thing to know is that Ripple is both a platform and a currency. The Ripple platform is an open source protocol which is designed to allow fast and cheap transactions.

Unlike Bitcoin that was never intended to be a simple payment machine, Ripple is definitely going to rule all the international transactions worldwide. Pretty ambitious, but who knows? Maybe currency exchanges will disappear in a few years like Blockbuster stores did.

The platform has its own currency (XRP) but also allows everybody to use the platform to create their own via RippleNet.

What is RippleNet?

RippleNet is a network of institutional payment-providers such as banks and money services businesses that use solutions developed by Ripple to provide a frictionless experience to send money globally.

Let’s give an example: Firstly, Mr. Jones lives in New York and has a chocolate box he doesn’t need. He is very interested to watch a baseball game, but doesn’t have a ticket. Secondly, Ms. Smith lives in Los Angeles and has a rare stamp she would like to give away for a chocolate box. Lastly, we have Mr. Brown who lives in Alaska and is looking very much for a rare stamp, and he a ticket for a baseball game in New York.

In our current system, these people would probably never find each other and remain with their ‘not valuable’ valuables.

But in Ripple world they could say: “Hey, I have chocolate, I want baseball” and the system will look for a shortest and cheapest combination to make it happen.

Moreover, the platform allows to make payments in any currency including Bitcoin and have a minimal internal transaction commission of $0.00001, yes that’s the right amount of zeros. The only reason it’s not free is to prevent DDos attacks.  

What is XRP

XRP is a token used for representing the transfer of value across the Ripple Network. The main purpose of XRP is to be a mediator for other - both cryptocurrencies and fiat - exchanges. The best way to describe XRP is a ‘Joker’. Not the creepy Batman enemy, but the card that can be any other card. If you want to exchange dollars to euro, it can be dollar with dollars and euro with euros to minimize the commission. As highlighted above, the transaction cost on Ripple is $0.00001.

An interesting fact: after the transaction the amount of $0.00001 ‘disappears’ from the platform and can’t be replenished. So, with every transaction the world becomes $0.00001 poorer. It is designed that way to prevent spammers attacks.

Who created Ripple (XRP)

The protocol as a working prototype was created away back in 2004.

But the real history starts in 2013, when Jed McCaleb, the creator of the EDonkey network invited a bunch of world rank investors to invest in Ripple Labs.

Who are Ripple Labs founders

Chris Larsen

Chris Larsen is an angel investor, business executive and a privacy activist considered to be the richest person in cryptocurrency. He’s best known for co-founding several startups in the field of online financial services, starting with an online mortgage lender E-loan back in 1996.

Jed McCaleb

Jed McCaleb is a well-known programmer and entrepreneur. He co-founded several crypto-startups, including Ripple, Stellar, eDonkey, Overnet as well as a cryptocurrency exchange Mt. Gox (he sold his share and the platform was re-coded way before the infamous hack), which at its prime was handling over 70% of all Bitcoin transactions worldwide.

Who are Ripple Labs investors






($ mln)

April 2013


Andreessen Horowitz, FF Angel LLC, Lightspeed Venture Partners, Pantera Capital, Vast Ventures, Bitcoin Opportunity Fund


May 2013


Google Ventures, IDG Capital Partners


November 2013


Core Innovation Capital, Venture51, Camp One Ventures, IDG Capital Partners


May 2015

Series A

IDG Capital Partners, Seagate Technology, AME Cloud Ventures, ChinaRock Capital Management, China Growth Capital, Wicklow Capital, Bitcoin Opportunity Corp, Core Innovation Capital, Route 66 Ventures, RRE Ventures, Vast Ventures, Venture 51


October 2015

Series A

Santander InnoVentures


September 2016

Series B

Standard Chartered, Accenture, SCB Digital Ventures, SBI Holdings, Santander InnoVentures, CME Group, Seagate Technology


What is the Ripple protocol consensus algorithm (RPCA)?

Unlike Bitcoin or Ethereum, Ripple doesn’t have a blockchain. A cryptocurrency without a Blockchain may sound pretty strange - if it doesn’t have a Blockchain, how does it verify transactions and makes sure everything is ok? For that purpose Ripple has is own patented technology: the Ripple protocol consensus algorithm (RPCA).

The word ‘consensus’ in the name means that if every node is in agreement with all the rest, there is no issue. Imagine, there is an ancient arena with one hundred wise old men and a city needs agreement from all of them to make a decision. If everybody agree you can start a war, end a war, rise taxes, proclaim Olympic games and all other sorts of interesting stuff. But if one of them doesn’t – nothing will happen until we will figure out what’s his problem.

What is Ripple used for

  1. Low commission currency exchange. There are many currencies that can’t be directly converted to each other. So, banks need to use the US dollar as a mediator. So, there is a double commission: converting currency A to USD and USD to currency B. Ripple is a mediator too, but much cheaper than USD.

  2. Fast international transactions. Average transaction time is 4 seconds. Compare it to hour or more for Bitcoin and a few days for regular banking systems.

  3. Payment ecosystem. User can basically issue his own currency for fast and cheap transaction. For example, one can create a currency to buy and see vintage vinyls or action figures between the collectors.

What are Ripple’s benefits?

- Ripple is originally designed as a day to day payment system, so it is much more powersafe than Bitcoin. As the results, the transactions are much quicker and cheaper.

- Ripple has started as an official organization, as its main focus is to be used by banks. So it is not a subject of multiple regulation checks as many other cryptocurrencies.

- Ripple has the ability to be exchanged to any currency or valuable (like gold) with a unified minimal commission.

Which banks support Ripple

  • Santander

  • Axis Bank

  • Yes Bank

  • Westpac

  • Union Credit

  • NBAD

  • UBS

Is Ripple a good investment?

Disclaimer: there is no such thing as a 100% safe investment, and each decision has its risks. In any case it is up to you to decide. However, below are some pros and cons to help you.


  1. As highlighted above, Ripple is an official organization with the trust of many banks -  it’s not another Blockchain startup from a noname company.

  2. No inflation. All the tokens are initially mined and already exist.

  3. The more banks use it as their transaction platform, the higher the value of XRP. If one day, all the banks decide to start using it as a unified bank currency instead of processing redundant currency exchanges – it will make a nice fortune for all the early birds who invested in Ripple.


  1. It is highly centralized. The whole idea of cryptocurrency is to avoid centralized control. As the tokens are already mined, the Ripple developers can decide when and how much to release, or not to release. So, it is basically like investing in a bank.

  2. In addition to centalization, today it is pretty much a monopoly as Ripple Labs owns 61 percent of the coins.

  3. It is open source - very smart, but still once the code is accessible there is a good chance many people will try to hack it. Some of them even might succeed.

Why is Ripple criticized?

  • Although there is a long list of very respectable banks that are planning to use Ripple, according to the Financial Times most of them are still on the testing stage. The few who transact real money use the platform but not the token. So, perhaps banks “are not that into Ripple”.

  • It can freeze your transactions. The biggest example of this is when Jed McCaleb, founder of Ripple Labs, tried to sell more than a million dollars worth of Ripple.  The transaction was reversed. There are rumors that Jed breached the contract, but even though, the very possibility of freezing a transaction is against basic cryptocurrency principles.

Ripple’s Future. What the experts are saying?

Roman Guelfi-Gibbs, the CEO and Lead Systems Designer for Pinnacle Brilliance Systems Inc.:

“Ripple certainly has the potential to move up a notch in 2018, but I think it will be more likely in 2019. As the market observes more projects being coded in other algorithms such as XRP, ETH will likely take a backseat to the next big coin/token. It will take some time for the markets to digest this, so I am projecting 2019 to be the likely time for it to take place. Of course, with crypto, anything can happen, so watch closely.”

Shidan Gouran, president of Global Blockchain Technologies:

“Ripple is unlikely to go up by one or two notches in the cryptocurrency world in 2018, and this is the case for three reasons. The first reason is the sheer dollar volume that separates each of the three currencies in the top positions, in terms of their market cap. Bitcoin is at over $191 billion, Ethereum is at over $84 billion, and Ripple is at over $35 billion. To displace Ethereum would require a deficit of about $49 billion to be closed (which is more than double Iceland's entire national GDP). The second reason is that the use cases for Ripple are mostly for the trade of assets, not for day-to-day spending. As consumer awareness of cryptocurrencies will rise significantly in 2018 and beyond, the interest of the masses will be on cryptocurrencies that can be used as currencies, not just for investment transactions. Finally, the third reason is that because Ripple cannot be bought with fiat currencies, one must purchase existing cryptocurrencies such as Bitcoin and Ethereum to purchase XRP. This goes on to feed demand for Bitcoin and Ethereum, and will only solidify their positions as the top two cryptocurrencies on the market. “

John-Paul McCaffrey, associate director at Long Island University:

“Although currently there isn’t a platform to exchange fiat currency for Ripple (XRP) this may change sooner than you think.”

Samson Williams, CSO of Ireland-based fintech firm SeedUps:

“Though not a cryptocurrency at all, it is the child of banks. So it’ll get the natural bump from [the] 2018 Recession.”