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Ripple (XRP)

Ripple is a crypto company. XRP is the cryptocurrency used on the XRP Ledger, an open network for transactions.

Last updated • 2 min read
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What is Ripple (XRP)?

The names Ripple, XRP, and XRP Ledger are often used interchangeably, but they don’t mean the same thing. Ripple offers payment software to financial institutions. XRP is a digital currency. The XRP Ledger, often called XRPL, is the network XRP runs on.

The XRPL keeps track of accounts and balances. Independent servers work together to verify transactions, so no single party approves them all. Ripple contributes to its development, but it doesn’t own XRP or the XRPL.

An example of Ripple (XRP)

Suppose you send XRP from your crypto wallet to another XRPL account. You digitally approve the transaction using your account keys. Validators then check whether the transaction is valid.

You pay a small amount of XRP for the transaction. Those fees are destroyed and don’t go to Ripple or the validators. This helps prevent large numbers of useless transactions.

Why is Ripple (XRP) important in crypto?

XRP has a technical role on the XRPL. It’s used to pay transaction fees, as a means of payment, and sometimes as an intermediary when swapping tokens on the built-in DEX. XRP may also be required as a reserve to keep an account active.

Crypto news may cover Ripple as a company, XRP as a cryptocurrency, or developments on the XRPL. It’s important to distinguish between these three. For example, buying XRP doesn’t mean you become an owner of Ripple.

The price of XRP is determined by supply and demand in the crypto market. Network usage can have an effect, but fast transactions or news about Ripple don’t guarantee a future price.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.