XRP

Lore & Background

Development of the XRP Ledger began in 2011 by engineers David Schwartz, Jed McCaleb and Arthur Britto, with a discussion initiated by McCaleb on a public discussion board. The thread was titled 'Bitcoin without mining' and was on BitcoinTalk.org. The open-source project was originally called 'Ripple', the unique consensus ledger was called the Ripple Consensus Ledger, the transaction protocol was called the Ripple Transaction Protocol or RTXP and the digital asset (known as 'ripples') using XRP as the three-letter currency code to follow the naming convention of BTC for Bitcoin. The technology of the 'XRP Ledger Consensus Protocol' was formally established in 2012. In April 2018, Ashton Kutcher gifted a charity sponsored by Ellen DeGeneres $4 million in the currency, which was noted at the time to be the third-largest cryptocurrency by market capitalization. On July 13, 2023, Judge Analisa Torres of the United States District Court for the Southern District of New York issued a decision on motions for summary judgment and stated the XRP token itself is not a security, although the manner in which it is sold could constitute the sale of a security. 'XRP, as a digital token, is not in and of itself a contract, transaction, or scheme that embodies the Howey requirements of an investment contract'.

Reader's Guide

The XRP Ledger operates on a consensus protocol that differs from traditional proof-of-work (PoW) and proof-of-stake (PoS) mechanisms. Transactions are validated by a network of independent validators who reach consensus every 3 to 5 seconds, enabling rapid transaction settlement. Users rely on a trusted list of validators known as the Unique Node List (UNL). While this approach provides faster transaction validation and security, it has led to discussions about centralization within the network. The XRP Ledger peer-to-peer overlay network is characterized by a small-world network topology, featuring a tightly clustered structure and short paths between nodes. Information systems expert Mary Lacity notes that this platform 'uses much less electricity than Bitcoin—about as much electricity as it costs to run an email server'.

Did You Know?

• The XRPL founders allocated 80 billion XRP to Ripple Labs and retained 20 billion for themselves as part of the initial distribution.
• Unlike many cryptocurrencies, XRP was pre-mined, with 100 billion tokens created at inception.