Ripple refers to two distinct things: RippleNet, the payment network, and Ripple (XRP) the cryptocurrency. Both of these were designed by Ripple Labs. Ripple Labs owns 60% of all 100 billion XRP, meaning that the cryptocurrency is more centralized than Bitcoin (BTC) and Ethereum (ETH). The payment protocol facilitates near instantaneous fund transfers for large financial institutions.


In 2012, Chris Larsen and Jed McCaleb founded Ripple Labs under the name Opencoin. Earlier in his career, McCaleb created eDonkey, one of the largest file-sharing networks of the early 2000s.

In 2013, Opencoin became Ripple Labs, which they shortened the name in 2015. Between 2013 and 2015, the company closed five rounds of funding: two rounds of angel funding, one round of seed funding, one Series A round and one Series B. Ripple (XRP), the currency, dates back to 2013.

Brad Garlinghouse is the current CEO. The CTO is David Schwartz. Garlinghouse was CEO of a file collaboration service called Hightail. Schwartz is one of the original consensus network architects and a well-known cryptocurrency developer.

In 2016, XRP obtained a virtual currency license from the New York State Department of Financial Services. They also ended and an XRP legal battle with R3 in 2018. The lawsuit regarded whether they owed R3 a certain amount of cryptocurrency.


Investors and institutions use XRP primarily for its low commission currency exchange and low transaction fees. RippleNet provides investors a way to convert fiat to fiat, which is cryptocurrency slang for government-backed currency. Ripple replaces USD as a mediator with a $0.00001 transaction commission.

Additionally, the average transaction takes 4 seconds. Bitcoin transactions, on average, take over an hour, and central banks take days to transfer funds.

This payment ecosystem also makes it possible for users to issue their own goods-specific tokens to facilitate trading between owners of specific assets.


Ripple (XRP) does not use a Proof-of-Work or Proof-of-Consensus protocol, which is how the Bitcoin and other blockchain cryptocurrencies reach consensus. Instead, it uses a consensus protocol designed by Ryan Fugger in 2004. This predates Satoshi Nakamoto‘s whitepaper.

This technology is called the Ripple Protocol Consensus Algorithm (RCPA). This algorithm solves the “double-spend” problem without using a more labor-intensive mechanism like Proof-of-Work. Instead, XRP’s distributed ledger uses a distributed agreement protocol. This protocol determines which transactions a node in the network see first. As long as there’s a super-majority of agreement on that and no way to cancel the agreement, there is consensus on which transaction is valid and which isn’t. In short, the one the network agrees comes first is valid. The other isn’t.

As a consequence, each block of the XRP ledger is determined by a consensus of participants. That makes the exchange decentralized. And it also makes it possible for users to list arbitrary assets, not just fiat and crypto but anything from gold to collectible action figures to vintage guitars.

Instead of cryptocurrency mining, Ripple created 100 billion XRP at the beginning. The network cannot create more XRP. Today, Ripple Labs owns 60% of all the network’s cryptocurrency. However, anyone can buy Ripple (XRP) on a cryptocurrency exchange (see our guide on How to Buy Ripple).


The majority of RippleNet users are large financial institutions. Banks use this crypto to transact real money and avoid commissions on fiat transactions. However, few major institutions are using the XRP token. As a result, most day-to-day transactions on the platform are asset trades.

The network facilitates payments across 27 countries and has over 100 corporate customers. Some of their most notable affiliates include:

  • American Express
  • Canadian Imperial Bank of Commerce (CIBC)
  • Deloitte
  • Santander
  • Bank of England
  • Western Union