XRP Explained

Everything You Need to Know About XRP History and Technology

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Ripple is a major cryptocurrency that trades under the cryptocurrency ticker symbol XRP. The currency and technology are designed and managed by Ripple Labs to facilitate fast, trusted payments globally. The fully diluted market cap of XRP is about $40 billion as of June 14, 2021, making it the seventh-largest cryptocurrency by market value.

Here, we’re going to take a look at XRP, how it works, why it’s popular, and the ongoing challenges facing XRP that every crypto investor should know. Keep reading to learn all about XRP and how it may fit into your crypto portfolio.

What Is XRP?

XRP is a cryptocurrency created by Ripple Labs to facilitate immediate and trusted payments. The most recent version of the XRP protocol, the software behind the XRP blockchain, was finalized in a whitepaper released in February 2018.

Like other cryptocurrencies, XRP runs on a distributed ledger where many computers, known as validator nodes, verify transactions and keep a record of all past XRP activity. 


But unlike Bitcoin and Ethereum, known for being costly and slow, XRP is designed to confirm transactions almost immediately at a far lower cost. 

Ripple Labs has big ambitions for XRP, including powering central bank digital currencies (CBDCs) and other large-scale payment systems.

However, it hasn’t been all smooth sailing for Ripple. The U.S. Securities and Exchange Commission (SEC) charged Ripple and its executives with creating an unregistered securities offering. That has led some cryptocurrency exchanges to pause purchasing XRP as the case works its way through the courts until the future of XRP is better understood.

Special Features of XRP

With the launch of XRP, Ripple aimed to overcome the sometimes slow transactions you get with other currencies. The typical 10-minute time to create a new block can spike to an hour for some Bitcoin transactions to complete, depending on network congestion. While Ethereum is generally faster with an average of around 15 seconds, that’s still too slow for some critical transactions. XRP settles in less than four seconds with a network fee that’s just fractions of a cent.

To speed up the transaction process, XRP requires fewer nodes compared to proof-of-work currencies, like Bitcoin and Ethereum, to show consensus on the transaction right away. 


XRP coins aren't minable. With a relatively stable supply of XRP in the marketplace, it’s unlikely that there will be any kind of substantial inflation.

Because XRP uses consensus instead of "proof-of-work" used by other currencies, XRP transactions are cheaper, faster, and possibly more energy efficient.

Inception 2012
Available tokens/Total Supply (as of 6/14/2021) 99,990,375,595/100 billion
Special Feature Fast and low-cost transactions

How to Mine XRP/Mining XRP

If you’re looking to mine XRP, you’re out of luck. This coin is not mined and has a fixed supply of up to 100 billion coins, and more than 99 billion are already in circulation. 

The only way to get a hold of XRP is to invest in it through a cryptocurrency exchange that offers support for the XRP coin.

How to Buy/Invest in XRP

You can’t buy XRP at any old cryptocurrency exchange, mainly if you are a resident of the United States.


Due to the SEC action, most exchanges such as Coinbase, Kraken, and Gemini have suspended XRP trading in the U.S.

You can, however, exchange other cryptocurrencies for XRP using distributed exchanges and some international exchanges.


Because XRP is so popular, it is widely supported by many cryptocurrency wallet providers, even some in the U.S. such as Coinbase that don’t support it for buying and selling. You can also hold XRP in a hardware wallet like those from Trezor and Ledger.

Transaction Times

According to Ripple, XRP transactions complete in 3.82 seconds. That’s fast!

Fees and Expenses 

Fees are very low on XRP, a significant draw over competing currencies. According to Ripple, the current average transaction fee is just $0.0001537.

Notable XRP Happenings

We’ve discussed that Ripple is under fire from the SEC, which accused the currency of trading as an unregistered security. When the suit was announced, popular exchanges like Coinbase suspended new purchases of XRP.


The SEC lawsuit focuses on whether or not XRP is more like a stock or a currency. It does not focus on whether or not XRP fulfills the goals set in the XRP whitepaper. 

Ripple and the SEC are in a series of ongoing hearings. Until the case finalizes, XRP remains a higher-risk coin than some others.

The limited availability and legal challenges make the future of XRP a bit ambiguous, but the underlying technology is solid, and XRP still has plenty of fans. It’s up to you to decide if XRP is a good investment for your dollars or if you’re safer choosing a more mainstream currency that’s tradeable on all major U.S. cryptocurrency exchanges.

The Balance does not provide tax, investment, or financial services and advice. The information is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future performance. Investing involves risk, including the possible loss of principal.

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