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Ripple (XRP) A Beginner’s Guide

Ripple (XRP)
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Ripple operates as a digital payment protocol tailored to meet the needs of the financial services sector. XRP, is the native crypto token of the Ripple network and consistently ranks among the top ten digital currencies by market capitalization.

Ripple launched the XRP ledger in 2012, which uses XRP as its native token. The goal of XRP is to improve international financial transfers and currency exchange.

Ripples of History

Ripple is a fintech firm that streamlines global payments, remittances, and currency exchange processes. It was founded as Ripplepay by Ryan Fugger in 2004, before Bitcoin, and was later established in 2012 by co-founders Chris Larsen and Jed McCaleb.

Ripple shares Bitcoin creator Satoshi Nakamoto’s vision of enabling faster, more secure global transactions. Unlike Bitcoin, Ripple uses a centralized structure instead of a decentralized blockchain model.

In 2011, McCaleb, Schwartz, and Britto created the XRP ledger to address Bitcoin's limitations. The ledger launched in 2012 with the addition of XRP, a token that improves functionality. Larsen, now Ripple's co-founder and executive chairman, joined the team later.

From 2012 to 2015, the company went through multiple rebranding phases, changing its name from Newcoin to OpenCoin in 2012, then to Ripple Labs in 2013, and finally to Ripple in 2015.

The Big Idea

XRP was created as a fast, cheap, and energy-efficient digital asset for peer-to-peer transactions. It processes transactions quickly and uses less energy than Bitcoin and other cryptocurrencies.

XRP primarily acts as a settlement layer on the Ripple network, facilitating transactions. It is traded as a cryptocurrency on various exchanges, including futures, options, swaps, and spot exchanges on both custodial and non-custodial platforms.

Key Features

Although XRP and Ripple are often used interchangeably, it's important to understand that XRP is a separate open-source digital asset from Ripple, the technology company. Ripple utilizes XRP's fast, efficient, reliable, and carbon-neutral capabilities to help its clients maintain compliance.

XRP operates on a decentralized, open-source blockchain called the XRP ledger (XRPL), using the Ripple transaction protocol (RTXP). XRP is pre-mined, with a maximum supply of 100 billion tokens, distributed in two stages.

  • Stage One: 80 billion XRP tokens were allotted to Ripple, the parent company. To maintain a stable supply, the company secured 55 billion tokens in an escrow account.
  • Stage Two: The remaining 20 billion XRP were given to the co-founders and core team of Ripple.

XRP Price

XRP, positioned as a Bitcoin alternative, has gained widespread adoption and increased substantially in value.

In the 2017-2018 crypto bull market, XRP peaked at $3.40 - a 51,709% increase from its 2017 starting price. While it has since fallen, XRP is still a top coin, ranking sixth in market capitalization.

XRP transactions do not require transaction fees like most cryptocurrencies. Instead, a small amount of XRP is burned during the transaction process, making XRP a deflationary asset.

XRP supply could theoretically go to zero as a deflationary asset. This is estimated to take about 70,000 years at the current burn rate. Validators can prevent this scenario through a voting system for adjustments to transaction costs and prices, as long as all conditions are met.

Controversy & SEC Ruling

XRP has faced challenges from regulatory authorities such as the SEC and FinCEN. In 2015, Ripple Labs and XRP were fined $700,000 by FinCEN for violating the Bank Secrecy Act through unauthorized selling of XRP and failure to implement an AML program. Ripple Labs agreed to take corrective measures.

In Dec 2020, Ripple CEO Brad Garlinghouse announced SEC's legal action against Ripple for selling XRP as an unregistered security. The SEC sued Ripple for violating the law by distributing $1.3 billion worth of XRP. Before that, in 2019, some XRP investors had accused the founders of fraud in a lawsuit against Ripple.

The SEC questioned whether XRP, Ripple's native token, is a security like a stake in Ripple or a digital commodity like Bitcoin. Garlinghouse and co-founder Larsen profited from selling their XRP holdings.

The XRP controversy is due to its premined status, fixed supply, and distribution among Ripple and its co-founders which is similar to share management in a company. The SEC argued that this violated its law based on the Howey Test.

On July 13, 2023, a court ruled that XRP and other cryptocurrencies are not securities when sold to the public, but are unregistered securities when sold to institutional investors.


XRP and Bitcoin differ significantly, despite some similarities. Key differences include their consensus mechanisms, transaction efficiency, and scalability.

  • Consensus Mechanisms: XRP uses trusted validators or a Unique Node List (UNL) to validate transactions. A transaction is validated only if the majority of these validators agree. In contrast, Bitcoin uses miners to validate transactions by solving complex mathematical problems using a proof of work system.
  • Efficiency: XRP's unique consensus mechanism enables faster, cheaper, and more energy-efficient transaction verification. In contrast, Bitcoin and several other cryptocurrencies use a proof-of-work mechanism that consumes more energy and takes more time and money to confirm transactions.
  • Scalability: XRP is highly scalable, supporting up to 1,500 transactions per second, while Bitcoin only processes four to five, and Ethereum around 13. Bitcoin's scalability issue has been addressed with the lightning network.

What About Security?

The Ripple network uses a consensus protocol to validate transactions. Validators update their ledgers every three to five seconds to align them with other ledgers. This process enhances the network's security and efficiency compared to other cryptocurrencies.

How Can I Get XRP?

Buy XRP using your credit card through the decentralized Savl app in just a few taps. You can also buy XRP from centralized exchanges such as Binance, Coinbase, and Bitfinex, and store them in a self-custodial crypto wallet like Savl for increased security and true ownership of your assets and private key.

Should I buy XRP - Is it a good investment?

XRP's potential as an investment is being debated due to past controversies. However, its high market capitalization, transaction speed, efficiency, and eco-friendliness make it a strong contender. XRP's recent legal victory against the SEC could also attract corporate interest and drive up its value. Overall, XRP may be a promising investment.

DISCLAIMER: All cryptocurrencies are high-risk investments and you should not expect to be protected if something goes wrong. Don't invest unless you're prepared to lose all the money you invest. The contents of this blog post do not constitute financial, legal or investment advice of any nature and are simply a reporting of publicly available facts and data. Savl does not and will not make financial or investment recommendations EVER. Your capital is always at risk.

Key Takeaways:

  1. Ripple is a payment protocol with its own cryptocurrency, XRP. It was launched in 2012 to improve global transactions.
  2. Ripplepay was founded in 2004 and re-established in 2012 as Ripple.
  3. XRP is a fast, inexpensive, and energy-efficient digital asset used for settlement within the Ripple network.
  4. 80 billion XRP tokens were allocated to Ripple, with an additional 20 billion distributed among its co-founders and team.
  5. XRP reached an all-time high of $3.40 in the 2017-2018 crypto bull market.
  6. In 2023, a court ruling clarified that XRP is not a security when sold to the public.
  7. XRP is faster and more scalable than Bitcoin, handling up to 1,500 transactions per second.
  8. XRP can be bought on decentralized apps (e.g. Savl) or centralized exchanges like Binance, Kraken and Coinbase.


Thank you for reading this piece and if you have any questions, feel free to reach out via Telegram @savl_support or join the conversation on Twitter @Savl_official.

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