On May 27, 2011, Jed McCaleb proposed an alternative to Bitcoin that would create a network of trusted nodes instead of relying on energy-intensive mining.
In this system, users would choose which nodes to trust. These trusted nodes would confirm transactions without needing mining power. Instead of a majority of miners securing the ledger, the system would reach an agreement through these trusted nodes. Timestamped transactions would help prevent double-spending.
This concept later contributed to the development of the XRP cryptocurrency, also known as Ripple.
What is Ripple (XRP)? A Brief History of the Project
Ripple—the Ripple protocol consensus algorithm—began as a project by Jed McCaleb, David Schwartz, and Arthur Britto.
At first, Ripple served as an umbrella brand for the entire project. The main name covered everything, the Ripple Consensus Ledger was the unique ledger, the Ripple Transaction Protocol (RTXP) outlined the transaction rules, and the Ripple network referred to the system itself.
To make things clearer, "ripples" was changed to "XRP," following the naming pattern of Bitcoin (BTC). The digital ledger, which is open-source and mainly designed for businesses, was also renamed the XRP ledger.
Over the years, Ripple became one of the most recognized names in the cryptocurrency industry. Unlike Bitcoin, which focuses on P2P transactions, Ripple has always targeted business applications and enterprise-level solutions.
Ripple Labs and XRP
Ripple is a leading payment network that operates on a layer-1 blockchain. It enables fast and low-cost international transactions to move, manage, and tokenize value.
Ripple offers payment channels, similar to SWIFT, for settling transactions, exchanging assets, and handling remittances. The project is working to integrate central bank digital currencies (CBDCs) with decentralized finance (DeFi) solutions. It provides tools for institutional DeFi and supports projects that include tokenized real estate collateral.
It’s important to note that the company—Ripple Labs—is different from the XRP ledger, which is an open-source project maintained by independent validators. The cryptocurrency XRP runs on this ledger.
Although Ripple Labs owns a large amount of XRP, kept in escrow to ensure a stable supply (with a total supply of 100 billion), the rest is distributed among various entities, including individual investors like you.
Currently, XRP is the seventh largest cryptocurrency by market cap, valued at around 30 billion dollars.
XRP and the SEC case
Ripple's ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) started in December 2020 when the latter sued Ripple Labs.
The SEC claims that Ripple raised over $1.3 billion by selling XRP tokens without proper registration, essentially treating them as unregistered securities. Ripple denies these claims and argues that XRP should be seen as a digital currency, not a security.
In July 2023, a significant ruling stated that while sales of XRP to institutions were unregistered securities, sales to regular investors were not. In August 2024, Ripple was fined $125 million, which was much lower than the nearly $2 billion the SEC requested. Many viewed this ruling as a win for Ripple, and it caused XRP’s price to rise.
However, on October 3, the SEC appealed the judge's decision, which will likely delay the case for several more months.
Donald Trump in; Gary Gensler out
The legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is approaching a critical juncture as the SEC nears a deadline to file its initial appeal.
Speculation about a potential settlement has intensified following recent developments. A former SEC attorney suggests that the incoming administration, with Gary Gensler on the way out and Paul Atkins expected to lead the SEC, may prefer to resolve the case through settlement rather than prolong litigation.
Adding to the intrigue, Ripple's executives attended a private dinner with President-elect Donald Trump on Jan 6, 2025, sparking discussions about the future of XRP and its regulatory status.
These developments generated optimism within the cryptocurrency community, with some experts predicting that a settlement could lead to a significant rally in XRP's value.
Key Characteristics of the XRP Ledger
XRP is notable for its speed, scalability, and low transaction fees. Here’s a clear overview of its key features:
- Fast transactions
XRP is renowned for its rapid transaction speed, with an average confirmation time of just 3 to 5 seconds. This is significantly faster than most other cryptocurrencies, as well as traditional fiat currencies like the US dollar.
- Scalability
The Ripple ledger can process up to 1,500 XRP transactions per second, compared to Bitcoin, which can handle only about 7 transactions per second.
- Low transaction fees
Transaction fees for XRP are minimal, often just fractions of a cent. Notably, every XRP token used to pay a transaction fee is burned and no longer tracked. In comparison, Bitcoin transactions often incur much higher fees, especially during peak times.
- Cross-border payments
XRP was specifically designed to serve as a bridge currency for cross-border payments. Unlike Bitcoin, which is more suited for decentralized peer-to-peer transactions, XRP is tailored for use by financial institutions.
- Unique consensus mechanism
Ripple uses a consensus mechanism called the RippleNet Consensus Algorithm (also known as the Ripple Protocol Consensus Algorithm or RPCA). Unlike traditional Proof of Work (PoW) or Proof of Stake (PoS) systems, Ripple's consensus algorithm relies on a unique approach where a set of trusted validators reach an agreement on the order and validity of transactions.
Transactions are validated by a network of over 150 independent validators and deemed legitimate when at least 80% of these validators agree on their validity. This mechanism enhances both security and efficiency while also reducing the negative environmental impact associated with other proof-of-work systems.
What are XRP’s use cases?
The XRP Ledger (XRPL) project lists several use cases on its website, highlighting key benefits and technical details. Here’s a brief overview of important XRP applications.
Payments
XRP offers a fast and cheaper way to make payments directly between people. Users can send and receive money quickly with just an XRP wallet, which can be custodial or non-custodial.
Deposit Authorization
The XRP ledger helps banks and financial institutions control deposits. Account holders can only receive funds that they confirm, which is essential for complying with regulations against money laundering and other illegal activities.
Smart Contracts
XRPL also allows users to set up smart contracts and agreements that automatically execute payments when certain conditions are met.
Tokenization
XRPL can be used to tokenize various assets, like real estate, stocks, and commodities. This makes it easier to trade and transfer ownership. Businesses can create and manage their digital assets on the XRPL, which improves liquidity and accessibility. The ledger has several security features that make these efforts worthwhile. These include trust lines, authorized trust lines, freeze and clawback options, non-transferable tokens, and fees for NFT transfers.
DeFi
XRP can also be used in DeFi applications for lending and borrowing. Users can earn interest on their holdings or get funds without using traditional banks. They can join liquidity pools to provide resources for decentralized exchanges (DEX), earning rewards in the process. The XRPL supports automated trading strategies, which allow traders to take advantage of quick market changes. With fast transaction times and low fees, traders can make many trades efficiently. Plus, access to public exchange data makes the XRPL suitable for high-frequency and scalping trading strategies.
How to invest in XRP?
Before investing in any cryptocurrency, it is crucial to know the factors that drive price fluctuations. This knowledge will empower you to make more informed decisions about when to purchase and sell XRP. If you are prepared, follow these steps.
- Choose a crypto exchange or crypto wallet
Choose a reputable cryptocurrency exchange, such as Coinbase, Binance, or Kraken. Create an account and complete the KYC verification. If you prefer doing things securely, consider using a non-custodial crypto wallet.
- Fund your account
Fund your account using fiat currency (like USD) or other crypto assets. Ensure you understand any deposit fees associated with the wallet or exchange.
- Buy XRP directly
Tap the buy button to purchase XRP select XRP (get a good look at the XRP logo, so that you don’t confuse Ripple with another digital asset), and place an order. You can also swap other cryptocurrencies like BTC or stablecoins like USDT for XRP.
- Keep your XRP in a secure wallet
If you purchased XRP on an exchange, it's a good idea to move it to a secure hardware wallet. This will give you better security compared to leaving it on the exchange.
- Hold or trade
Depending on market conditions, your risk tolerance, and your investment goals, you can either hold on to a digital asset or actively trade it.
XRP price prediction and analysis in 2025
XRP rose nearly five times from $0.52 in November 2024 to $2.38 now. It has become the third-largest cryptocurrency in the world, with a market value of about $131 billion, following Bitcoin and Ethereum.
This rise has outperformed some other cryptocurrencies, which also gained after Donald Trump won the U.S. presidential elections, raising hopes for a positive stance on digital currencies. Ripple also launched a stablecoin called RLUSD, which is fully backed by US cash, government securities, and other cash equivalents.
Aside from the general cryptocurrency rally, several factors could push XRP even higher.
First, there is a good chance that Ripple’s ETF will be approved in 2025. Data from Polymarket indicates there is a 70% chance of ETF approval for Ripple this year. The SEC is currently reviewing four applications for XRP ETFs from 21Shares, Bitwise, Canary Capital, and WisdomTree. The chances of getting approval have increased since Paul Atkins will be in charge of the SEC under the Trump administration.
If XRP gets ETF approval, it could rise a further 50-70% from the current market price. This is because of greater market trust, more access for big investors, and easier participation for everyday investors.
XRP also offers fast and low-cost international money transfers. Its price could go up if Ripple improves its core business and if the SEC case against it is dropped or settled.
Furthermore, Ripple may attract new partners and increase the use of its payment network. This growth in its business will likely be key to XRP’s future growth and could push its price to around $5 this year.
FAQs
XRP, a popular crypto developed by Ripple Labs, has garnered significant attention in Q4 2024. We’ve answered your burning questions:
Is XRP Ripple a good investment?
Investing in XRP carries both potential and risk. Recent market trends have shown notable price increases; however, the cryptocurrency market is highly volatile. Conduct thorough research and consider your risk tolerance before investing.
How much will Ripple XRP be worth in 2025?
Analysts' price predictions for XRP in 2025 vary. Some forecasts suggest it could trade between $1.81 and $4.44, with an average of around $2.96. Others anticipate a range between $2.22 and $5.62. These projections are speculative and should be approached with caution.
How much is 1 XRP worth right now?
Does XRP really have a future?
XRP has established partnerships with various financial institutions, enhancing its utility in cross-border transactions. Recent legal developments, including a potential resolution of the SEC lawsuit, have positively impacted its market perception.
Which coin is best to buy now?
The "best" cryptocurrency to buy depends on individual investment goals, risk tolerance, and market analysis. Before making investment decisions, it's advisable to research various options, assess market trends, and consult an expert.
How to buy XRP for beginners?
Purchasing XRP involves several steps:
- Choose a cryptocurrency exchange or wallet: Select a reputable platform that supports XRP.
- Create an account: Sign up on the chosen exchange by providing the necessary personal information and completing identity verification.
- Deposit funds: Add funds to your account using accepted payment methods like bank transfers, credit/debit cards, or other cryptocurrencies.
- Purchase XRP: Navigate to the trading section, select XRP, and execute a buy order for your desired amount.
- Secure your investment: Transfer your XRP to a cold wallet like Tangem for enhanced security, especially if you plan to hold it long-term.
Note: Cryptocurrency investments are inherently risky. It's crucial to perform due diligence and consider consulting a financial advisor before making investment decisions.