Ripple (XRP) is two things:
- a protocol for financial transactions; and
- a currency called ripple (XRP) that enables the protocol to function.
Ripple is a real-time gross settlement system, currency exchange and remittance network created by the Ripple Company.
Also called the Ripple Transaction Protocol or Ripple protocol, it is built upon a distributed open source internet protocol, who's native digital asset is known as XRP.
Released in 2012, Ripple purports to enable "secure, instant and nearly free global financial transactions of any size with no chargebacks."
The Ripple protocol (RTXP) utilizes an IOU system that allows users to transfer anything of value across the internet. It could be gold bars, palm oil or a dozen Durians.
Each transaction that's sent over the network, burns (or destroys), a small amount of XRP as a way of preventing transaction spam.
Used by companies such as UniCredit, UBS and Santander, Ripple's infrasrcucture has been increasingly adopted by banks and payment networks for international settlements.
Due to its more centralised and controllable setup, Ripple has seen the most interest from the private sector in the traditional financial world.
Out of the 100 billion XRP created, 20 billion XRP were retained by the creators, who were also the founders of Ripple Labs. The creators gave the remaining 80% of the total to Ripple Labs, with the XRP intended "to incentivize market maker activity to increase XRP liquidity and strengthen the overall health of XRP markets."
Ripple Labs also had a short-lived 2013 giveaway of under 200 million XRP (0.2% of all XRP) with some of the amount given to charities such as the Computing for Good initiative, which began offering XRP in exchange for time volunteered on research projects.
In May 2017, to alleviate concerns surrounding XRP supply, Ripple committed to place 55 billion XRP (88% of its XRP holdings) into a cryptographically-secured escrow. The escrow will allow them to use up to 1 billion monthly and return whatever is unused at the end of each month to the back of the escrow queue in the form of an additional month-long contract, starting the process all over.
Actor and Ripple Labs investor Ashton Kutcher, famously donated $4m worth of Ripple live on the 'The Ellen De Generes Show'. In his on-air donation to Ellen's Wildlife fund, Kutcher, displayed the use case of Ripple for cross-border transactions by using it to instantly transfer $4 million into Rwandan Francs.
Although a brilliant PR stunt, the fact that something similar cannot be done for Bitcoin and Ethereum, proves how centralised Ripple really is.
Ripple’s participation on the TV show also suggests that the team behind the altcoin is eyeing the media industry to push its financial agenda.
At Cosensus 2018, Ripple threw a massive afterparty for the conference's attendees, using its a-list celebrity connections to get global hip hop superstar, Snoog Dog, to put on a show for the crowd.