August 10, 2021
What Is Ripple?
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What Is Ripple?; A Beginners Guide

Ripple is an open source protocol cryptocurrency. It provides fast and cheap transactions. In fact, Ripple is both a currency and platform. Unlike other cryptocurrencies such as Bitcoin, Ripple aimed to rule all the international transactions globally.

The Ripple platform has its native currency called XRP. However, it allows everyone to use the platform to create their own by using RippleNet.

What is RippleNet?

RippleNet is a network on financial institutions such as banks and other money service businesses. They are users of RippleNet in order to have a frictionless experience to send money worldwide.

In addition, this platform makes the users be able to make payments in any currency. The transaction fee is $0.00001, which is almost zero. In fact, they just chose a tiny amount for transaction fee in order to prevent DDos attacks.

What is XRP?

XRP is the Ripple native token. It uses to represent the transfer of value across the Ripple network. XRP plays the role for both cryptocurrencies and fiat. The best example of XRP is ‘Joker’ when playing cards. In fact, joker can be any other cards. So, in the real world when you want to send money globally, it doesn’t require to converting it to different fiat currencies. You just need to convert it to XRP and then do the transaction. It would be much easier rather than converting dollar to euro or etc.

As we mentioned above, the transaction cost on Ripple network is almost zero. The interesting fact about XRP is that after every transaction the amount of $0.00001 disappears from the platform. This method helps to prevent spammers attacks.

Who created Ripple?

The protocol prototype created in 2004. But it launched in 2013. In fact, in this year, Jed McCaleb invited some top rank investors to invest in Ripple Labs.

Here we have a list of Ripple Labs founders:

Chris Larsen

Larsen is an angel investor. He also plays the role as business executive. Larsen is known as the richest person in cryptocurrency. He is famous, due to his participation as an investor in many startup businesses.


He is a famous entrepreneur and programmer. So far he collaborated with several crypto startups. He participated in Stellar, Ripple, Overnet, eDonkey project. In addition, he was part Mt.Gox exchange project.

Who are Ripple Labs investors

Date Funding


                                         Investor Amount

($ mln)

April 2013 Angel Andreessen Horowitz, FF Angel LLC, Lightspeed Venture Partners, Pantera Capital, Vast Ventures, Bitcoin Opportunity Fund 2.5
May 2013 Angel Google Ventures, IDG Capital Partners 3.0
November 2013 Seed Core Innovation Capital, Venture51, Camp One Ventures, IDG Capital Partners 3.5
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 28
October 2015 Series A Santander InnoVentures 4
September 2016 Series B Standard Chartered, Accenture, SCB Digital Ventures, SBI Holdings, Santander InnoVentures, CME Group, Seagate Technology 55

What is the Ripple protocol consensus algorithm (RPCA)?

Ripple doesn’t have any blockchain like other cryptocurrencies. So, it becomes a question that how does the network verify and confirm transactions if it doesn’t have any blockchain? The answer to this question is that Ripple uses its own technology. The technology called Ripple Protocol Consensus Algorithm (RPCA).

It means that every node should be agree on the transaction in order to perform. If even one node doesn’t agree the transaction remain unconfirmed until they figure out what is the problem.

What is Ripple used for?

  1. It uses to exchange currency with low commission. When banks want to convert currencies to each other, they use US dollar as mediator. So, this process has high commission when converting the currencies. Ripple also plays the role as a mediator, but it’s much cheaper than the traditional way.
  2. Ripple provides fast international transactions. An international transaction takes few days using traditional banking system. Even with Bitcoin it takes an hour. By using Ripple, it takes only 4 seconds.
  3. It provides a payment ecosystem. In fact, anyone can create their own currency to have cheap and fast transaction.

Ripple’s benefits

It aimed to use as a day to day payment system. So, it has less transaction fee and transactions are quicker compare to Bitcoin.

Ripple doesn’t have to pass multiple regulation checks the same as many other cryptocurrencies. The reason is that it’s an official organization and mostly use by banks.

Ripple can easily exchange to any currency or even valuables such as gold. The commission of the exchange is really low.

A list of banks, which support Ripple

  • Santander
  • Axis Bank
  • Yes Bank
  • Westpac
  • Union Credit
  • NBAD
  • UBS

Pros and cons of Ripple as an investment option

It’s notable that all the investments are not totally safe and profitable. The investors should accept the risks and make decision based on their own information and data.


  1. As we mentioned above, Ripple is an official organization. There are many famous banks out there, which are working with it. It’s not just a new start-up blockchain company with noname.
  2. All the Ripple tokens (XRPs) are pre-mined and already exist. As a result, it doesn’t experience inflation.
  3. The value of the XRP increase, when more banks use it as their transaction platform. So, if, one day almost all the banks start to use it, the value of Ripple will increase significantly. As a result, the early investors can make a good profit.


  1. The Ripple is highly centralized. All the XRP tokens are already mined. As a result, the developers will decide how much and when to release them in the market. In a comparison with other cryptocurrencies it’s like investing in a bank.
  2. It is an open-source cryptocurrency. So, the code is accessible for others. As a result, it’s vulnerable to hacks.

What are Ripple’s disadvantages?

However, many banks started to use it so far, they are just using its platform. It still has a far way to go. In fact, the banks still not using the tokens. As a result, there is a possibility that it may not be become accepted by banks.

The transactions on its network may freeze. For example, when the founder of Ripple Lab, Jed McCaleb, tried to transfer over a million dollars worth of Ripple, his transaction reversed. However, freezing a transaction is against basic cryptocurrency principles.

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