XRP, Ripple and Consensus Protocol – Let’s Know About Them

The group gave it a new name: NewCoin but later renamed it twice, first as OpenCoin and finally settling at Ripple.

XRP, Ripple and Consensus Protocol
Image Source: Pixabay

What is XRP?

After the success of Bitcoin, three engineers—David Schwartz, Jed McCaleb, and Arthur Britto came together in 2011 and began developing the XRP Ledger (XRPL). The intent behind the creation of this platform was to roll out an improved version of Bitcoin. The core idea was to design a digital asset that was more sustainable than Bitcoin. It is actually a money transfer network.

It is worth mentioning here that Jed McCalebis the same person who had previously created Mt. Gox. Mt. Gox started as an exchange for Magic: The Gathering cards, but later on turned into a huge bitcoin exchange. This exchange has been the victim of one of the biggest scams in Crypto history.

The three men finally launched XRP Ledger in June 2012. Chris Larsen joined them later and the group gave it a new name: NewCoin but later renamed it twice, first as OpenCoin and finally settling at Ripple.

As per XRP.org, “The XRP Ledger (XRPL) is a decentralized, public blockchain led by a global developer community. It’s fast, energy efficient, and reliable. With ease of development, low transaction costs, and a knowledgeable community, it provides developers with a strong open-source foundation for executing on the most demanding projects—without hurting the environment.”

How to Buy Ripple (XRP)?

Ripple (XRP) is a real-time gross settlement (RTGS) system. It means it facilitates instant money transfers, remittance and currency exchange. The U.S.-based technology company Ripple Labs Inc. is the force behind XRP. XRP is basically the cryptocurrency of the platform.

It is available on many cryptocurrency exchanges like Bitstamp, Kraken, Coincheck, etc. Like any other crypto, XRP can be stored in a crypto wallet.

How is XRP different from Bitcoin?

Unlike Bitcoin or Ether, XRP need not be mined as the number of coins are limited, i.e., 100 billion. Bitcoin or any other crypto generally runs on the blockchain. To add a new block the miner solves a complex mathematical equation to establish proof of work. Hence the validation mechanism in Bitcoin is proof of work. But in case of XRP, consensus protocol replaces Bitcoin’s proof of work in a faster, cheaper and carbon neutral way.

What is Consensus Protocol?

In Consensus Protocol several servers are designated as validators. These validators can agree on the order and outcome of XRP trading and confirm the transactions. All transactions can be publicly audited.

Anyone who is active on ledger can operate a validator. It can be operated by a single individual or a community like exchange, businesses, etc. Presently, more than 150 validators are involved in the consensus mechanism. This consensus mechanism ensures instant verification.

The whole transaction process is multiple times faster than that of Bitcoin or Ethereum, the two biggest Crypto market players. On one hand where Ripple network can process upto 1500 transactions in a second, Bitcoin can process only 6 and Ethereum only 15. This property makes Ripple so efficient that even financial institutions are looking forward to explore the payment processing like Ripple.

Around 100 banks had signed up to utilise the messaging capabilities of the infrastructure by the year 2018 but they were not by any means using XRP cryptocurrency.

Moreover, Ripple is not purely decentralized as the developers exercise a substantial hold over the whole system to prevent it from hacks or frauds. Some experts of the field don’t, therefore, regard XRP as a true crypto token.
XRP has seen a market volatility like none of its competitors. This was due the legal proceedings against Ripple by the Securities and Exchange Commission (SEC) which classified XRP as a security and not a commodity.


Disclaimer: The views presented here are purely for educational and information purposes and not to be meant as financial or investment or technological or legal advice. The author or our website shall not be responsible for any kind of loss caused to reader due to forming any decision on the basis of material presented here. Please read the complete Disclaimer here.