What Is XRP Ledger?
The main benefits of XRP Ledger include:
- Low transaction fees ($0.0002/tx)
- Fast XRP token transactions (it takes 3-5 seconds to complete a transaction)
- Scalability (it manages to make 1,500 TPS)
- Environmentally friendly (due to its energy efficiency)
For the transaction validation, XRP Ledger uses the Ripple Protocol Consensus Algorithm. The essence of this algorithm is that it employs validators (designated servers) that deal with transactions. The algorithm’s data format is comparable to that of a blockchain because each new data block contains the hash of the one before it.
Each transaction is processed equally across all servers in the network, and any transaction that complies with the protocol is immediately confirmed. Since no single participant makes decisions independently, all validated transactions can be performed without a risk of failure. Besides, for a transaction to reach consensus and be added to the XRP Ledger, it must be approved by a majority of nodes (80%).
The Founders of XRP Ledger
In 2012, David Schwartz, Jed McCaleb, and Arthur Britto released the XRP Ledger together with the XRP token. Don't forget to check out the XRP price chart above if you’re interested in the current XRP price.
However, in the same year, Jed McCaleb and Chris Larsen also co-founded OpenCoin, which later was renamed Ripple Labs and, eventually, Ripple. There’s often a misunderstanding of how exactly Ripple, XRP Ledger, XRP Coin, and Ripple Network are related.
Simply put, XRP Ledger is a blockchain, XRP is the native coin of that blockchain, Ripple Network is a worldwide payment network, and Ripple is the company behind it.
Ripple was initially founded by Ryan Fugger in 2004. The protocol's central concept was the replacement of banks with a peer-to-peer network of financial relationships. At that time the whole crypto world was not invented yet.
However, Fugger was approached in 2012 with a proposal for a creation of a digital currency by an American programmer and businessman Jed McCaleb together with Chris Larsen (an angel investor). After some deliberation, Ryan agreed to the proposal and allowed McCaleb and Larsen to create the Ripple protocol (RTXP) and the Ripple payment and exchange network.
What Is XRP?
As mentioned before, XRP is the native coin of the XRP Ledger. It was created with the thought of being better than Bitcoin in terms of speed, cost, scalability, and so on. The max supply of XRP crypto assets is 100 billion coins. 80 billion of that supply was given to Ripple, while the remaining portion was distributed between founders.
Essentially, XRP supplies liquidity, accelerates cross-border transactions, and serves as a link between conventional fiat currencies. This means that it can be used as a mediator while converting various fiat currencies. For example, imagine that, in order to exchange one fiat currency for another, you need to use US dollars because these currencies cannot be exchanged directly. XRP coins can be used instead of US dollars as a much faster and less costly alternative.
Just keep in mind that the XRP price is quite volatile, just like many other currencies in the crypto market. Why? Essentially, when the market fluctuates due to various external or internal factors, the XRP price, alongside the prices of other assets, fluctuates as well.