Ripple and XRP

Information, questions and answers

XRP is currently the third largest digital asset in the world

What is XRP ?

XRP is one of the most popular digital assets (cryptocurrency) in the world right now. It was developed to be able to make global transfers quickly and cheaply. XRP has no special meaning (no acronym) and is the name of the asset. Friendly XRP is also called as ZERP 1 ("X" spoken "ZE"). XRP transfers can be made by individual people as well as banks, payment providers or other companies. The focus of the company Ripple is on the enterprise sector. The problems of expensive and long lasting cross-border payments are to be solved. With XRP transfers, it is possible to greatly reduce transaction costs and transaction time compared to a traditional SWIFT transfer 2.

The idea and development of the payment protocol was initiated by Jed McCaleb, Chris Larsen and Ryan Fugger. During the development period, the company Ripple was founded. Based on the ripple payment protocol, XRP was developed. The company's focus increasingly shifted to the commercial enterprise sector, which is why Jed McCaleb left the company out of private conviction 3. With Stellar Lumen (XLM) he has developed a new equivalent asset, which focuses on the private sector (on developing countries). Following the departure of Jed McCaleb, David Schwartz has taken the lead in developing the Ripple Protocol and XRP.


The blockchain (distributed XRP ledger) is technically decentralized and distributed across all nodes in the network. Anyone can start with rippled their own node, join the network and also act as a validator 4 (decision maker on the consensus).

In the real decision process of the XRP Ledger, only trusted validator nodes participate. Which node is trusted by anyone is at the decision of each node (Unique Node List 5). To be trusted on the network, at least one trusted validator must guarantee for a new node. If the node has proven itself (good agreement rate and many validations), further trusted validators will consider this node as trustworthy. The process of decentralization is going on, more and more independent validators are being added to the network. At the moment, the network is stable and works without errors. The next official step is full independence through decentralization. It is important to understand that this is an ongoing process 6.

What is XRP not ?

XRP was developed as a digital asset for the integration of Ripple enterprise products. The primary goal is _not_ to create a free "currency" with the purpose of abolishing an intermediary (like banks). The focus is on the distribution of Ripple's commercial products. But XRP is also the key of the Internet of Value, which is open for everyone (individuals as well as banks, companies and governments).

Speed and scaling

The consensus (the confirmation of correct transactions) is negotiated on the network by a supermajority 7 between trusted nodes. Currently, up to 1500 transactions per second can be processed. A transaction is confirmed within 3-4 seconds. The transaction costs are around 40-60 drops ($0.0004 - $0.0006).

Scaling depends on the number of nodes (transaction and validator nodes) in the network. Theoretically, it is possible to scale XRP up to 70,000 transactions per second 8. It should be noted that the transaction speed (3-4 seconds) and the cost per transaction (40-60 drops) stagnate!

What value can XRP achieve ?

In total, 100 billion XRPs have been generated initially. XRP is inflation-proof. Creating of further XRP is not possible. Of the 100 billion coins, 55% were transferred to an XRP escrow account 9. Around 15-20% are held by the founders. The remaining XRP are in circulation (Exchanges, individuals or companies).

No one can predict how much market capitalization the crypto market will ever reach. There are calculations XRP has a value of $1, there are calculations with a value of $10-40 and there are calculations of $100-400 10 11. A value is determined by supply and demand. Demand arises when the product has a benefit. The XRP Ledger has already been in use for 5 years (since 2012), is being further developed and new (well-known) partners are constantly joining the RippleNet. The first applications will end the trial in 2018 and in 2018 the first companies will use their (XRP based) applications in real business 12. The companies report the cost, time and resources are saved 13. Three factors that are of high value today and highlight the benefits of XRP. So if there is supply, demand and benefit, how much can that value rise?

What is XRP Escrow ?

The XRP Interledger Protocol has a feature to send XRP to a self-made Trust Account (Escrow Account). The XRPs are sent to the neutral wallet with a destination address. Before sending, you must specify a time limit for how many days the sent XRP must remain in at least this neutral wallet. After this time the owner has the possibility to call an "EscrowFinish" (the XRP will be transferred to the destination address) or "EscrowCancel" (the XRP will be referred back to the sender) 14.

Ripple has split the $ 55 billion XRP into $ 1 billion and $ 500 million XRP packages and stored in December 2017 in 149 individual transactions in escrow accounts 15. Per transaction, the condition of remaining in the escrow account has been increased by 30 additional days. So the last package will not be available again until 4.5 years after the escrow (last transaction can be finished after July 1, 2022 2:00AM 16). On 01.01.2018, the first $ 1 billion package from the Escrow Wallet was automatically transferred back with "EscrowFinish". If the coins are not sold within one month, they will be transferred back to a new Escrow account.

How is a consensus formed (mining) ?

There is no mining on XRP, no PoS and no PoW. All 100 billion XRPs have been created initially. The consensus, so the commitment of which transaction is established in the ledger, is negotiated by a supermajority of all trusted validator nodes. For each transaction, a small amount of XRP as spam protection is permanently destroyed. A generation of new XRP does not take place. A validator node works without earnings for the network. The validators of the Ripple Network are Ripple partners and other stakeholders who are also using XRP in the corporate environment 17. For consensus negotiation on transactions, all validators check different sets of transactions in parallel. The set of transactions under review must be approved by an average of 80% of trusted validators on the network. Once this 80% limit is reached, the consensus is formed in the set and the transactions that have received sufficient approval are committed to the ledger. The transactions that did not receive sufficient approval in the processed set did not pass the consensus round and need to be revalidate 18 19.

How to avoid spam ?

Each transaction costs a small amount of XRP - at least 10 drops (smallest available unit). Transaction costs are variable and are automatically recalculated every second based on the transaction volume and the number of validators. The costs per transaction will be permanently destroyed after the completed transaction. In order to prevent mass opening of wallets, each active wallet must have a minimum amount of 20 XRP 20 (the costs can be redefined in a voting process between the validators 21).

Can my XRP be frozen ?

No! There is a feature for non-XRP based transactions to freeze cash flows. This feature is not compatible with XRP transactions. Nobody can freeze transactions. This functionality is only available for other Ripple products which work with fiat money (Euro, Dollar etc.).
Because no party has a privileged place in the XRP Ledger, the freeze feature cannot prevent a counterparty from conducting transactions in XRP or funds issued by other counterparties. No one can freeze XRP. 22

Ripple and XRP

The company Ripple has developed the digital asset XRP. Colloquially, Ripple is used as a synonym for XRP. As a decentralized asset, which is not controlled by any intermediary, XRP is completely independent. The company Ripple offers in the enterprise area different products, which interact with XRP.

Ripple offers three products: xCurrent, xRapid and xVia work with the Ripple Network and the XRP Interledger Protocol, but not all products must be combined with XRP.


... offers banks and payment providers the opportunity to reduce their liquid FIAT money reserves (nostro accounts) and replace them with XRP. Only XRP is used.

The orange block represents the XRP liquidity and replaces the nostro accounts shown in the box


... is an interface for sending payments and invoices (as file attachments). It can optionally be used XRP. When other currencies are used at xVia, Path technology works by automatically converting currencies. This is so intelligent that in the end the cost of the executed transaction is kept as low as possible.

The RippleNet processes all transactions via a standardized interface


... processes real-time communication and bank transfers. Status Q1/2018 is not yet able to use XRP. The possibility to use XRP will be implemented in the future.

Direct communication on the technical basis of the Interledger Protocol

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