What‌ ‌is‌ ‌Ripple?‌
What_ _is_ _Ripple__
Updated 12.03.2022

Talking about Ripple, it’s impossible to give it only one definition that would describe it fully. That is how a money transfer system, a currency exchange, and a protocol of financial payments, working in a real time mode, are called. In other words, that is a protocol supporting tokens, fiat currencies, and exchange assets.

However, Ripple differs from the majority of cryptocurrency systems since it was developed not as an alternative to banks but rather as a system that would help them operate. Thanks to Ripple, banking systems can use cryptocurrency methods of calculation.

Ripple functions with the banks operating on xCurrent software. It allows to execute transboundary payments and track the status of money transfers here and now. But that doesn’t mean that the system is created for banks only. Regular users who use Ripple for exchanges may take advantage of the above system as well.

Who and when created Ripple?

Similar to how it happens with most blockchain projects, a team of professionals worked on Ripple development. The team includes Jed McCaleb, who is a well-known in his field programmer. Also, the cryptographer David Schwartz and the coder Arthur Britto took a significant part in launching the crypto project. But the basic concept was developed by another specialist – Ryan Fugger, a programmer from Canada.

The history of the development of Ripple started several years before Bitcoin was launched – in 2004. At that moment, Fugger was interested in Vancouver’s trade exchange system, and he got the idea to create his own decentralized system. And the first integration was launched quite soon, so appeared only a year later. The project failed to gain popularity because, at that point, it wasn’t noticed enough by the masses.

Enhanced development of Ripple began in the previous decade when in 2011 Jed McCaleb was transferred to a management position. He also invited Schwarz and Britto. The start of OpenCoin in 2011 became a result of their productive cooperation. The modern name ‘Ripple Labs, Inc.’ was given a year later, in 2012.

XRP: what is it?

XRP is a variation of a digital currency operating and generated exclusively within the Ripple network. One XRP is divided into a million drops, each of them called ‘drop’.

Tokens are limited in their number, and before public release, 100 billion tokens were mined. It’s possible to mine the tokens with the help of quasi mining, the essence of which is in scientific pursuits that aim to maintain Ripple Labs. Tokens can be used in different scenarios: as payment means, use the computational algorithms for other essential tasks, and receive tokens as rewards.

Almost 65% of all existing tokens are owned by the company, but the remaining funds still circulate. To be able to create and use the Ripple account, at least 20 XRP must be present in the financial account.

The presence of XRP in the account should be backed by actions. They may significantly help when conducting payments if it doesn’t become possible to exchange assets directly. In particular, such a need may appear if two not too popular assets are traded. Under these circumstances, XRP becomes kind of a bridge between them.

The company doesn’t consider tokens as a full-fledged alternative to digital money. XRP is a means of conducting payments and a useful method to execute exchange operations in a quality way. It’s pretty easy to get the tokens: all you need is simply to buy them.

Ripple’s Proof-of-work.

A distinctive feature of Ripple is that the system doesn’t apply Blockchain. The confirmation of transactions and network consensus are possible due to the RPCA algorithm – Ripple Protocol Consensus Algorithm.

Nodes take part in the process. These are servers that are added to the lists of approved or unique ones. Their task is to solve the task: either approve or decline the transaction. If a user has enough funds in the account, the operation will be approved; if not – the failure will occur instead.

RPCA is included in the RTXP payment protocol developed in OpenCoin in 2012. In late winter 2018, Ripple introduced several technical documents, where it described a new consensus algorithm that contributes to the diversification growth of node connection within a network. Both documents provide actual data about the network:

What is the main component of the Ripple ecosystem? 

The Ripple ecosystem consists of three products of the company. These are xCurrent, xRapid, and xVia, which realize a single system managed by a banking network and RippleNet. To provide evidence, let’s have a more detailed look at each product.

What xCurrent is

xCurrent is a platform where banks can execute transboundary payments almost instantly. The operations are conducted with highly liquid fiat pairs like USD/EUR. Thanks to xCurrent, you may be sure that the payments will not only be successful but will also be tracked.

The xCurrent system consists of four components:

  1. Messenger is an open format API allowing to execute a bilateral exchange of messages. Using it, banks can interact before the transaction is started. The following communication channel is used to transfer fundamentally important data: possible risks, commission fee options, how much time a transfer may take as well as the data about the client. Thus, the absence or inaccuracy of information will be noticed right away.
  2. ILP register. The main task of the component is to monitor the credit, debit, and liquidity of banks trying to interact. It ensures the safety of the conduction of a transaction. Due to the ILP register, the system remains coherent. It allows to execute transactions instantly or decline them if something suspicious is going on. In particular, all the transactions are processed entirely, which excludes the risk of not conducting calculations at all.
  3. The task of this component is the confirmation (or cancelation) of transactions. Besides, the validator helps to coordinate where the data in the ILP register is directed, which will eliminate risks when conducting banking operations. Thanks to the validator, the data remains confidential even though it is in a single source. Banks may use their validators or leave it to a counterparty.
  4. The work of this component includes the tracking of accounts and exchanges within protocols. This is where quotations are compared, and the information is added to the registers of a recipient.

This approach allows the system to work fast and with no mistakes.


To execute operations, banks are forced to use a lot of various currencies to store their assets. Otherwise, it would be problematic to conduct the transactions. xRapid allows solving this liquidity issue, using the XRP as an intermediary between different monetary units. When a transaction is required, one currency is exchanged to XRP. And when the transaction is completed, XRP will be exchanged again, but to another currency this time.

An approach like that allows to significantly save time because the transactions via xRapid are executed within 4 seconds. In addition to that, the fee for the procedure is only 0,00001 XRP. The commission money doesn’t go to anyone: they are burnt.

The system is protected from transaction spam. As soon as the user wants to conduct the operation at high speed, the commission fees will grow. If the system is inactive, the fees will reduce.


xVia is an API intended to connect the Ripple ecosystem into one. Using this tool, various companies may contact RippleNet and make fast transactions, not worrying about the fact at which point of the world the counterparties are. There’s no need to install xVia since the system will work as a browser extension.

Ripple architecture features

Execution of transactions through Ripple is an attempt to implement changes to registers and spread them across all the nodes of the network. Each server can purchase and transform the network, but the system not always allows that. The Ripple network includes a few constituents:

If we compare the Ripple architecture with other projects, it’s possible to say it has a lot in common with SWIFT. However, in contrast to this payment system, Ripple doesn’t use a central processor but works in RippleNet.