What is XRP?
XRP is the native coin of the XRP Ledger, a public blockchain built for payments. The ledger was created by David Schwartz, Jed McCaleb and Arthur Britto and went live in 2012.
XRP is often linked with Ripple, a US company connected to the founders. Ripple builds payment products that can use XRP and received a large share of the coins at the start. However, the XRP Ledger itself is open source and run by independent servers.
How does it work?
The XRP Ledger does not use mining or staking. It uses its own consensus protocol: servers called validators compare proposed transactions and agree on which ones to accept. Each server chooses a list of validators it trusts, known as a unique node list.
All XRP was created when the ledger started, and no new XRP can be created. Every transaction destroys a tiny amount of XRP as a fee, so the total supply slowly shrinks. Accounts must also hold a small minimum balance, called a reserve, to exist on the ledger.
What is it used for?
XRP and the XRP Ledger are mainly used for:
- Cross-border payments, where XRP can act as a bridge between two currencies
- Moving value between exchanges and wallets
- Issuing and trading tokens, including stablecoins, on the ledger's built-in exchange
- Paying the small transaction fees on the XRP Ledger
Some banks and payment firms have tested or used Ripple products, but using Ripple software does not always mean using XRP itself. It helps to check which one a news story is talking about.
Key facts
- Launched: 2012
- Creators: David Schwartz, Jed McCaleb and Arthur Britto
- Consensus: XRP Ledger consensus protocol (no mining or staking)
- Blockchain: its own network, the XRP Ledger
- Supply: 100 billion XRP created at launch; no new XRP can be created
Explainer written by Finvane from official project documentation. It is not investment advice.