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What is XRP? A step-by-step guide to XRP

See how the Ripple blockchain platform aims to transform the global payments industry.


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XRP is a cryptocurrency used by Ripple, which is a cross-border payments company looking to rival the likes of Visa, Western Union and overhaul international payments using blockchain technology. This guide will explain how XRP works, how Ripple uses XRP and shWhat’s in this guide?ow you how to buy, trade and store XRP coins.

Disclaimer: This information is not financial advice or an endorsement of cryptocurrency or any specific provider, service or offering. Cryptocurrencies are highly volatile and high risk. Do your own research and seek financial advice before buying. Please check with providers if their services are available in your state.


Live XRP (XRP) price


Data sourced from Binance

XRP at a glance

Ticker symbolXRP
UseCross-border Payments
Year released2012
OriginUnited States
Maximum supply100,000,000,000
Consensus algorithmProof of Correctness
Notable team membersBrad Garlinghouse, David Schwartz, Stefan Thomas
Notable partnershipsAccenture, American Express, Deloitte, Royal Bank of Canada, MoneyGram, National Australia Bank, Western Union, Westpac
Learn more about XRP

SEC Lawsuit

On 22/12/2020 the Securities and Exchanges Commission (SEC) filed a lawsuit against Ripple and two of its executives.

According to the SEC press release “The complaint alleges that Ripple raised funds, beginning in 2013, through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide.”

Ripple filed a 93-page response to the lawsuit on 01/29/2021, stating that “XRP performs a number of functions that are distinct from the functions of “securities” as the law has understood that term for decades. For example, XRP functions as a medium of exchange — a virtual currency used today in international and domestic transactions — moving value between jurisdictions and facilitating transactions.”

What are Ripple and XRP?

Launched in 2012, XRP is now one of the world’s largest cryptocurrencies. It aims to offer fast, affordable and reliable cross-border payments. Both XRP and the XRP Ledger are used by US technology company Ripple, which develops a range of solutions designed to transform the global payment industry.

“The revolution of blockchain is not going to happen from outside the system; it’s going to happen from within the system.”
– Brad Garlinghouse, Ripple CEO

Ripple is a San Francisco-based technology company with more than 300 employees, focused on providing cross-border payment solutions.

Ripple’s main aim is to create a global settlement network that ensures more efficient transactions between the world’s financial institutions.

The platform is designed to allow users – primarily financial institutions – to transfer money from any currency to any other currency in a matter of seconds, anywhere in the world. This is an ambitious goal meant to eliminate the need for older systems like SWIFT.

Before going any further, we should point out that the term “Ripple” is often used interchangeably, and often incorrectly, to refer to a few different things.


XRP is the name of the digital currency that facilitates transactions on the Ripple network. It effectively acts as a bridge between the two currencies being transferred, and also serves as a source of liquidity when necessary. XRP is the native asset of the XRP Ledger, an open-source blockchain that runs on a network of peer-to-peer servers.


This is the American technology company that develops the Ripple payment protocol and network. Originally known as OpenCoin, it later traded as Ripple Labs before rebranding to Ripple in 2015.


This is Ripple’s network of payment providers around the world. It connects the different payment networks of banks, payment providers, digital asset exchanges and corporate entities, and can accept both fiat and cryptocurrencies.

XRP vs. Ripple: What’s the difference?

The term “Ripple” is often used to describe the XRP cryptocurrency, but this is in fact incorrect.

Ripple is the California-based tech company that aims to make it faster, easier and more affordable to send cross-border payments.

XRP (XRP) is the independent digital asset that facilitates transactions on the Ripple network, acting as a bridge between different fiat currencies and as a source of liquidity.

[INFOGRAPHIC] An in-depth comparison of XRP and Ripple.

Where to buy XRP

Name Product Deposit methods Fiat Currencies Cryptocurrencies
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How XRP works: The technology behind Ripple

Current methods of sending money internationally are outdated and slow. This is best summed up in this excerpt from Ripple’s cost model paper:

“Today’s global payments infrastructure moves money from one payment system to another through a series of internal book transfers across financial institutions. Because these book transfers occur across different systems with a low level of coordination, funds settlement is slow (often 3-5 days, trapping liquidity), error-prone (error rates run upwards of 12.7%), and costly ($1.6 trillion in system-wide costs for global cross-border transactions).”

Despite the fact that the global remittances industry is huge, there’s currently no streamlined and well-organized international network to handle cross-border payments. This is the problem Ripple aims to solve. However, rather than going toe-to-toe in competition with the banking Goliaths that currently control this sector, Ripple’s plan is to partner with major financials around the world to offer a blockchain-based solution.

By joining Ripple’s global network, Ripple says that financial institutions can process their customers’ payments anywhere in the world instantly, reliably and cost-effectively.

How long do XRP payments take to settle?

Let’s say Bank A in Australia wants to send $5 million to Bank B in Bangladesh. Rather than converting Australian dollars to Bangladeshi taka, battling exchange rate margins, paying processing fees and facing slow transaction times along the way, Bank A can transfer $5 million worth of XRP to Bank B’s Ripple wallet, which can then be converted to the local currency.

Payments using XRP settle in four seconds, and the current minimum transaction cost required by the network for a standard transaction is 0.00001 XRP. The network is also currently capable of consistently handling 1,500 transactions per second.

XRP settlement Image: Finder

Payment settlement times of XRP vs other platforms Source: Ripple

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xCurrent vs xRapid vs xVia: What’s the difference?

Ripple offers three products to banks and payment providers around the world:


  • This Ripple software is designed to allow banks to instantly settle cross-border payments with end-to-end tracking. It enables real-time messaging between banks so that payment details can be confirmed before a transaction is initiated, and to verify delivery once the transaction has been settled.
  • xCurrent is built around the Interledger Protocol (ILP), which enables interoperation between different ledgers and networks and is designed to satisfy all the risk, privacy and compliance requirements of each bank. It’s currently in use by several financial institutions, most notably as part of a much-publicized partnership with American Express and Santander.
  • However, it’s worth pointing out that xCurrent doesn’t actually involve the use of XRP at all. An important detail for those who wish to speculate on the value of the cryptocurrency.
How xCurrent works Source: Ripple


  • xRapid is designed to provide banks and payment providers with access to on-demand liquidity. It uses XRP to reduce costs and enable real-time payments for financial institutions targeting emerging markets.
  • xRapid has been tested by a number of payment providers including Western Union, MoneyGram and Cuallix.
How xRapid works Source: Ripple


  • Designed for corporates, payment providers and banks, xVia is a payment interface designed to make it easier to use xCurrent and xRapid. It allows users to track payments and generate invoices for their transactions.
How xVia works Source: Ripple

XRP supply and tokenomics

The maximum supply of 100 billion XRP has already been created. However, as of December 2018, the circulating supply sits at about 41 billion.

Escrow release

This is because Ripple, the company behind the cryptocurrency, owns some 60% of the total supply of XRP. At the time of writing (May 2018) most of Ripple’s holdings (around 55 billion XRP) are locked in an escrow account, with up to 1 billion XRP to be released every month for a period of 55 months.

Of the 1 billion XRP released each month, any unused amounts are put back into escrow and will be re-released in the first month that there are no other XRP releases. Essentially, the unused amounts are sent to the back of the queue.


XRP is also deflationary. While the total XRP supply started off at 100 billion (100,000,000,000), by the end of 2018 it was down to only 99.99 billion (99,991,757,426 according to CoinMarketCap).

That’s because XRP is a deflationary currency, with every transaction incurring a small fee (to prevent spam attacks) which is destroyed during the transaction.

The minimum fee for each XRP transaction is 0.00001 XRP (also known as 10 drops, or a fraction of a cent), although certain movements such as multisignature transactions, or escrow transactions, will incur higher fees.

So, in about 6 years of its life, around 8 million XRP has been destroyed by deflation. Even with generous predictions of XRP uptake it’s estimated that it would take thousands of years for circulating numbers to get low enough to start being a concern. Plus, XRP can be divided into individual drops (0.000001 XRP) if needed.

The fees and therefore the burn rate can also be modified by consensus at a later date.

In the immediate future, the real circulating supply of XRP will actually be increasing much more quickly than it’s decreasing as Ripple releases XRP from its escrow account.

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Is XRP centralized or decentralized?

Picture not describedQuestions you might have
The XRP blockchain works differently to Bitcoin, Ethereum and most others, and has often been criticized as being not truly decentralized.

The point of decentralization in this context is primarily to ensure that it’s impossible to interfere with the network by blocking or reversing transactions, sending money you don’t have or otherwise trying to trick the network.

If one entity manages to take control of a large enough part of the network, or if a sufficient number of participants collude to attack the network, they might be able to interfere with the network in these kinds of ways.

  • Public ledgers like Bitcoin. Theoretically anyone can participate in the mining process, and be rewarded with cryptocurrency for processing transactions and maintaining the ledger. Network security depends on having a diverse range of independent miners, it assumes that miners are motivated by profits and it aims to ensure that attacking the network is less profitable than doing the right thing.
  • XRP Ledger. There are no direct rewards for node operators. Rather, running a node is its own reward because it helps maintain the XRP Ledger which should be providing a valuable service. There are two kinds of nodes, but only the “trusted” ones will actually have a say in whether transactions are processed. The untrusted ones are mostly just along for the ride.

One of the reasons XRP Ledger is so fast compared to Bitcoin and other public blockchains is essentially because it depends on that tighter and faster set of trusted nodes to do the heavy lifting. These nodes can be found on Ripple’s Unique Node List. Getting a spot on that list means publicly identifying and verifying oneself to the world.

Ripple team

Ripple, the San Francisco-based fintech company behind XRP, was founded in 2012. Though the project has roots dating back to 2004, it wasn’t until Jed McCaleb and Chris Larsen joined forces in August 2012 that the Ripple we know today truly began to take shape.

Today, Ripple is led by CEO Brad Garlinghouse and notable team members like chief cryptographer David Schwartz and CTO Stefan Thomas.

Notable partnerships

The list of financial institutions and organizations that have partnered with Ripple is an impressive one and stretches to more than 100 customers. Some of the highlights of 2018 include:

  • December 2018: Coinone Transfer launches Cross, South Korea’s first blockchain remittance service, powered by Ripple.
  • November 2018: CIMB Group, ASEAN’s fifth largest bank, entered into a strategic collaboration with Ripple to enable instant cross-border payments across its markets.
  • October 2018: Ripple announced that xRapid (which uses the XRP token) was commercially available, and was already moving into production with customers including MercuryFX and Cuallix.
  • September 2018: PNC Financial Services, a top ten bank in the United States, joined RippleNet as a user to offer customers real-time cross-border payments.
  • August 2018: Ripple brings on Bittrex, Bitso and as its preferred digital asset exchange partners.
  • May 2018: Ripple announced that RationalFX (UK), FairFX (UK), Exchange4Free (UK), MoneyMatch (Malaysia) and UniPAY (Georgia) were joining xVia.
  • April 2018: Santander launched a blockchain-based foreign exchange service, called Santander One Pay FX, using Ripple’s technology.
  • February 2018: Two banks, Itaú Unibanco (Brazil) and IndusInd (India), and three remittance providers – InstaReM (Singapore), Beetech (Brazil) and Zip Remit (Canada) – announced that they were joining RippleNet.
  • February 2018: It was announced that Western Union was trialing transactions using Ripple technology.
  • January 2018: MoneyGram announced that it would pilot the use of XRP in its payment flows through xRapid.
  • June 2019: Ripple announced the purchase of MoneyGram stock, agreeing to purchase a ~10% stake in the company for US$50 million. MoneyGram agreed to use Ripple products for cross-border settlements.
  • March 2020: The National Bank of Fujairah PJSC (NBF), a partially state-owned bank in the UAE partners with Ripple and announces it will use RippleNet for remittances to India.
  • September 2020: Ripple acquired Logos and it’s team of Engineers who will work on Ripple’s Xpring product as well as create a DeFi ecosystem that operates on the XRP blockchain. A week later Ripple purchases Icelandic crypto trading firm Algrim in order to strengthen its European footprint, in particular, it’s On-Demand Liquidity service.
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  • What to watch out for

The biggest obstacle to Ripple’s quest for global domination is the adoption (or lack thereof) of XRP by banks and financial institutions around the world, and that’s where the focus of the people behind Ripple might be.

If more banks join the network, this could encourage demand for XRP and entice other banks to join the platform, but Ripple may also face stiff competition from Stellar.

And that’s before we even get to the established players in this space. Ripple needs to not only outperform other blockchain payment solutions, but also needs to be an improvement on the in-house blockchain creations being trialled by financial institutions around the world.

SWIFT currently connects more than 11,000 of the world’s financial institutions through its own network, and has been working on its own trials of blockchain technology. Credit card giant Visa is exploring its own blockchain-based cross-border payment options, so Ripple won’t be able to just waltz in and take a big chunk of market share without a fight.

Another key challenge that could hamper the price growth of XRP is its inability to gain listings on popular US exchanges like Coinbase and Gemini. The Coinbase listing was heavily rumored in early 2018 but never eventuated, and reports from April 2018 suggest that XRP is unlikely to feature on either of these platforms any time soon.

There are also ongoing questions about the role of XRP within the Ripple ecosystem. Usage and network effects might drive price actions to a large extent, but this may not translate into higher prices as directly as one might expect. Trillions of dollars are crossing borders each year, but it’s still not clear how much market cap XRP needs to adequately service the industry.

The XRP Ledger’s construction and design choices have also attracted some criticism.

Bottom line

With partnerships galore and strong financial backing, Ripple is a major player in the crypto world. It’s designed with a focus on bridging the gap between the traditional banking industry and the new age of digital currencies. And as anyone who’s ever been gouged while sending an international money transfer will agree, it’s targeting a market sector that’s crying out for disruption.

But whether or not Ripple has the product to challenge the old guard of the world’s financial industry remains to be seen, so research the project thoroughly before deciding whether or not you should buy any XRP.

Ripple frequently asked questions about Ripple

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14 Responses

    Default Gravatar
    EugeneFebruary 4, 2019

    Hi there guys. I would really like to invest in Ripple,XRP. I am from South Africa. Presently, what is the cost of 1 XRP?

      Avatarfinder Customer Care
      CharisseFebruary 5, 2019Staff

      Hi Eugene,

      Thanks for reaching out to finder.

      The live price of XRP to ZAR as of this writing, is 3.98. You can also see the live price of XRP to other currencies if you click on the “XRP price” tab above, on this page.

      I hope this helps.


    Default Gravatar
    EthanNovember 5, 2018

    How much can one invest with ripple?
    How does one’s investment with ripple multiply?
    If i initially invest $100 with ripple, what are the expected returns after one year?

      Avatarfinder Customer Care
      JoshuaNovember 18, 2018Staff

      Hi Ethan,

      Thanks for getting in touch with finder. I hope all is well with you. :)

      There’s no limit to how much you can invest in Ripple. However, you need to make sure you buy at least 20 XRPs to activate your wallet.

      How much you will earn will depend on how Ripple’s value increases. If you bought Ripple while the price is low, there’s a tendency that you will earn more provided that Ripple’s value also increases. Moreover, you can also use Ripple as a cash. You can find people who sell stuff or provide services in exchange for Ripple. You can then sell those stuff at a higher price to earn a profit.

      Regarding your last question, there’s no definite answer. Again, it will depend on Ripple’s value. In the past, people who have invested in Ripple with $100 have earned them tens to thousands of dollars in return. However, past performance is not a sure indication of what lies ahead for Ripple.

      For this reason, it would be a good idea to first obtain as much information as possible before making a decision. Read the guide on this page and see if Ripple is the right cryptocurrency for you.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!


    Default Gravatar
    VictorSeptember 27, 2018

    How can I partner with your company, what do I stand to benefit. Thanks

      Avatarfinder Customer Care
      johnbasanesSeptember 27, 2018Staff

      Hi Victor,

      Thank you for reaching out to us.

      Please complete our partnership request form to start the process. Once you are on the link, please scroll down to the very bottom of the page and fill in your details in the form provided. Once submitted, our client services team will contact you and discuss your proposal as well as the benefits of joining finder today. Hope this helps!


    Default Gravatar
    FadiMay 5, 2018

    Dear Sirs,

    I bought some ripple and had my account activated by Bithomp. I want to transfer some of the coins to an exchange. How do I go about it? The Bithomp website says it is just an explorer and there is no link on how to transfer the coins. I am new to this and am really stuck
    Thanks for your answer.

      Avatarfinder Customer Care
      JoshuaMay 7, 2018Staff

      Hi Fadi,

      Thanks for getting in touch with finder.

      The Bithomp is a Ripple Explorer. It isn’t a wallet nor an exchange. It only allows you to explore Ripple accounts for balances, transaction, history and other info.

      In case you want to find the right exchange, please use this page. Take advantage of our comparison table above to obtain an overview of what each exchange has to offer. An exchange will allow you to transfer digital coins such as Ripple.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!


    Default Gravatar
    StephDecember 31, 2017

    Can you store ripple xrp in electrum wallet?

      Avatarfinder Customer Care
      JoanneJanuary 2, 2018Staff

      Hi Steph,

      Thank you for visiting finder, we are a financial comparison website and general information service.

      The wallets where you can store ripple is listed in the electrum bitcoin wallet review and currently the it supports only Bitcoin


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