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Ripple
Original author(s)Arthur Britto, David Schwartz, Ryan Fugger
Developer(s)Ripple Labs Inc.
Initial release2012
Stable release
1.0.0[1] / 15 May 2018[1]
Written inC++
Operating systemServer: Linux (RHEL, CentOS, Ubuntu), Windows, macOS (development only)
TypeReal-time gross settlement, currency exchange, remittance
LicenseISC license
Websiteripple.com

XRP Ledger (XRPL) is a decentralized distributed open source protocol that serves as a real-time gross settlement system, currency exchange and remittance network that is open to financial institutions worldwide. It was created by Ripple Labs Inc., a US-based technology company, and released in 2012. XRP Ledger employs the native cryptocurrency known as XRP, and supports tokens representing fiat currency, cryptocurrency, commodities, or other units of value such as frequent flier miles or mobile minutes.[2] Ripple purports to enable "secure, instantly and nearly free global financial transactions of any size with no chargebacks", and XRP has been noted to have substantially greater energy efficiency (and therefore less environmental impact) than most cryptocurrencies.[3]

History

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Ripple was conceived by Jed McCaleb and built by Arthur Britto and David Schwartz who then approached Ryan Fugger who, in 2005, had debuted a financial service to provide secure payment options to members of an online community via a global network.[4][5] Fugger had developed a system called OpenCoin which would transform into Ripple.[6][7] The company also created its own form of digital currency referred to as XRP to allow financial institutions to transfer money with negligible fees and wait-time.[8] In 2013, the company reported interest from banks for using its payment system.[9]

By 2018, over 100 banks had signed up, but most of them were only using Ripple's XCurrent messaging technology, while avoiding the XRP cryptocurrency due to its volatility problems.[10] Representatives of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), whose market dominance is being challenged by Ripple, have argued that the scalability issues of Ripple and other blockchain solutions remain unsolved, confining them to bilateral and intra-bank applications.[10] A Ripple executive acknowledged in 2018 that "We started out with your classic blockchain, which we love. But the feedback from the banks is you can't put the whole world on a blockchain".[11]

Ripple relies on a common shared ledger, which is a distributed database storing information about all Ripple accounts. Chris Larsen told the Stanford Graduate School of Business that the network was managed by a network of independent servers which compare their transaction records, and that servers could in theory belong to anyone, including banks or market makers.[6] Ripple validates accounts and balances instantly for payment transmission and delivers payment notification within a few seconds.[12] Payments are irreversible, and there are no chargebacks.[13] Ripple Labs continued as the primary contributor of code to the consensus verification system behind Ripple.[14] In 2014, the protocol gained access to the US banking system amid concerns over security and a lack of regulation.[15]

On 13 July 2023, Judge Analisa Torres of the United States District Court for the Southern District of New York issued a decision on motions for summary judgement and stated the XRP token itself is not a security, although the manner in which it is sold could constitute the sale of a security. "XRP, as a digital token, is not in and of itself a 'contract, transaction, or scheme' that embodies the Howey requirements of an investment contract".[16]

Technical overview

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The XRP Ledger operates on a consensus protocol that differs from traditional proof-of-work (PoW) and proof-of-stake (PoS) mechanisms. Transactions are validated by a network of independent validators who reach consensus every 3 to 5 seconds, enabling rapid transaction settlement.[17] This consensus mechanism reduces energy consumption significantly, making XRP one of the least energy-intensive cryptocurrencies.[3] The network allows any user to operate a validator, but users typically rely on a trusted list of validators known as the Unique Node List (UNL). This approach provides faster transaction validation and security, though it has led to discussions about centralization within the network.[17] The platform's consensus protocol eliminates the need for energy-intensive mining operations, contributing to its lower environmental impact.[3] Ripple has pledged to achieve net-zero carbon emissions by 2030, aiming to further reduce the environmental footprint of its network.[18] A scientific study made by two researchers from Stanford and Stockholm universities that studied the money production from an energy consumption point of view and a macroeconomic level stated that running a server on Ripple was comparable to the energy needs of running an email server.[19]

Unlike many cryptocurrencies, XRP was pre-mined, with 100 billion tokens created at inception.[17] Ripple Labs holds a portion of XRP in escrow and periodically releases tokens into circulation through sales, aiming to maintain market stability.[17] XRP serves as a bridge currency for international transactions, allowing users to exchange different currencies quickly and with low transaction fees. Each transaction on the XRP Ledger requires a small fee of 0.00001 XRP, which is burned to prevent spam on the network.[17]

Reception

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For its creation and development of the Ripple protocol (RTXP) and the Ripple payment/exchange network Ripple Labs was named as one of 2014's 50 Smartest Companies in the February 2014 edition of MIT Technology Review.[20]

==See also== {{Portal|Internet}} * [[List of online payment service providers]] * [[List of cryptocurrencies]] * [[Remittance]] ==References== {{Reflist}} ==External links== * {{Official website|https://ripple.com}} {{Cryptocurrencies|state=expanded}} [[Category:Private currencies]] [[Category:Cryptocurrency projects]] [[Category:Foreign exchange companies]] [[Category:Foreign exchange market]] [[Category:Payment systems]] [[Category:Mobile payments]] [[Category:Micropayment]] [[Category:Software using the ISC license]]

  1. ^ a b "Official source code". Github. Retrieved May 14, 2014.
  2. ^ "Ripple Labs Banks $3.5M for Open-Source Payments System and Virtual Currency". The Wall Street Journal Pro. Dow Jones & Company. November 12, 2013. Retrieved January 28, 2014.
  3. ^ a b c Harrison, Polly Jean (November 19, 2021). "What Are the Top 10 Greenest Cryptocurrencies?". The Fintech Times.
  4. ^ Peck, Morgan (January 14, 2013). "Ripple Could Help or Harm Bitcoin". IEEE Spectrum. Institute of Electrical and Electronics Engineers. Retrieved January 27, 2014.
  5. ^ Liu, Alec. "Ripple Could Make Bitcoin Great (or Destroy It)". Motherboard. Archived from the original on February 7, 2014. Retrieved January 27, 2014.
  6. ^ a b Andrews, Edmund L. (September 24, 2013). "Chris Larsen: Money Without Borders". Stanford Graduate School of Business. Retrieved April 10, 2015.
  7. ^ Bala, Dr. Venkatesh (October 8, 2014). "Lessons in Innovation Leadership: Chris Larsen". Nielsen. The Cambridge Group. Archived from the original on December 24, 2017. Retrieved June 10, 2015.
  8. ^ Lashinsky, Adam (August 22, 2014). "Isn't one Internet enough?". Fortune Magazine. Retrieved April 10, 2015.
  9. ^ Popper, Nathaniel (November 11, 2013). "The rush to coin virtual money with real value". The New York Times. Retrieved January 26, 2014.
  10. ^ a b Arnold, Martin (June 6, 2018). "Ripple and Swift slug it out over cross-border payments". Financial Times. Archived from the original on September 27, 2019. Retrieved October 28, 2019.
  11. ^ "Banks unlikely to process payments with distributed ledgers for now, says Ripple". Reuters. June 13, 2018. Retrieved October 30, 2019.
  12. ^ Simonite, Tom (April 11, 2013). "Big-name investors back effort to build a better Bitcoin". MIT Technology Review. Archived from the original on March 8, 2014. Retrieved January 26, 2014.
  13. ^ Schwartz, Ariel. "Bitcoin 2.0: Can Ripple Make Digital Currency Mainstream?". Fast Company. Retrieved February 2, 2014.
  14. ^ Cooper, Jane (March 11, 2014). "Ripple Labs CEO looks to revolutionise online payments". The Banker. Retrieved April 10, 2015.
  15. ^ Scully, Matt (September 24, 2014). "Alternative Money Mover Ripple Labs Enters U.S. Banking System". American Banker. Retrieved June 16, 2015.
  16. ^ District court summary judgement, pdf, 13 July 2023.
  17. ^ a b c d e "What Is Ripple (XRP)?". Forbes Advisor. July 13, 2023. Retrieved October 24, 2024.
  18. ^ "Ripple Leads Sustainability Agenda to Achieve Carbon Neutrality by 2030". Ripple Insights. February 2, 2021. Retrieved October 24, 2024.
  19. ^ Leopold, Sid John; Englesson, Niclas (November 27, 2017). "How Eco friendly is our money and is there an alternative?" (PDF). Retrieved August 27, 2018.
  20. ^ Bergstein, Brian. "50 Smartest Companies". MIT Technology Review. Archived from the original on March 8, 2014. Retrieved March 12, 2014.
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