What is XRP Coin? XRP Coin Review: Does It Have Potential?

At the end of 2020, XRP coin was embroiled in a controversy when the U.S. Securities and Exchange Commission (SEC) sued, capturing the attention of many market investors. If you’re not yet familiar with what XRP coin is, which project it belongs to, why XRP was sued, or the assessments of XRP’s potential following the lawsuit, don’t miss today’s article from Finance Solutes !

1. WHAT IS RIPPLE (XRP COIN)?

Ripple is a payment protocol that uses blockchain technology to process money transfers. Many people confuse Ripple as a cryptocurrency, but in fact Ripple is the name of the protocol, while the cryptocurrency used within its network is XRP coin.

The project’s mission is to build and provide innovative, global digital currency solutions. These solutions are faster, more transparent, and more cost-effective, addressing long-standing market issues. Additionally, through partnerships with major networks of developers, the project’s development team inspires and creates opportunities for many other developers.

2. WHAT IS XRP LEDGER?

When it comes to XRP coin, investors and market participants immediately think of Ripple. However, before the XRP token and Ripple existed, the XRP Ledger was the first product developed when the founding developers, inspired by Bitcoin, aimed to create an improved version that overcomes Bitcoin’s limitations.

Key focus areas targeted by the developers behind XRP Ledger include:

• Core technology: Enhancing infrastructure with high-capacity data centers, full historical servers, and monitoring systems.
• Unique node list: Establishing clear, public criteria for evaluating the performance of network nodes.

• Developer ecosystem: Building an ecosystem for global developers to adopt and use XRP Ledger.
• Sustainability: Encouraging scalable and sustainable applications.
• Community: Supporting and developing tools and platforms for integration with global financial blockchain networks.

Many companies and developer-driven projects worldwide have utilized XRP Ledger to address diverse problems in different industries—e.g., BitPay for payment processing or Coil for web monetization.

2.1. XRP Token Development Team

In 2011, three engineers—David Schwartz, Jed McCaleb, and Arthur Britto—began developing XRP Ledger with its native token, XRP, as a time- and energy-efficient alternative to Bitcoin. That September, the three engineers and Chris Larsen founded Opencoin, renamed Ripple, as mentioned earlier.

2.2. XRP Project Timeline

Here’s a summary of milestones for XRP coin and XRP Ledger (XRPL):

• Early 2011: XRPL development began to create a more sustainable system than Bitcoin.
• 2012: XRPL native token XRP was issued, initially named Ripple (Ripple Consensus Ledger).
• 2013: OpenCoin rebranded as Ripple Labs.
• 2020: XRPL Foundation officially launched—a non-profit organization dedicated to advancing and applying XRP Ledger.

3. HOW RIPPLE PROTOCOL (XRP COIN) WORKS

Ripple consists of two main components: Ripple and RippleNet. Essentially, using blockchain technology and APIs, Ripple allows financial institutions in its network—called RippleNet—to transfer money globally reliably and near-instantaneously. RippleNet addresses three primary challenges in payments:

• Speed and certainty
• Liquidity
• Transparency

Ripple Protocol is expected to be a viable alternative to SWIFT, the most popular international payment system. Its advantages include:

• Average transaction time is ~5 seconds
• Transaction fee is about 0.00001 XRP—much lower than XRP’s all-time high price
• XRP coin acts as a bridge currency, letting institutions avoid holding multiple fiat currencies
• Ripple uses a deterministic consensus protocol: validators compare proposed transactions against the latest XRP Ledger version and confirm them

4. HOW ARE RIPPLE AND XRP COIN RELATED?

There’s often confusion between Ripple, XRPL, and XRP coin—wondering if XRPL is a private blockchain owned by Ripple. The answer is no: XRP Ledger (XRPL) is a public, decentralized blockchain. Any network change requires at least 80 % approval from network nodes.

Ripple is considered a contributor to the network, like other participants. Ripple currently runs over 150 validators and holds more than 35 nodes on the default unique node list. XRP coin, however, is an independent digital asset. Initially, the XRPL founders gifted 80 billion XRP to Ripple, which then locked 55 billion XRP in escrow on the XRP Ledger.

5. WHAT IS XRP COIN?

By now, there’s no need to explain again—XRP token originates from XRP Ledger and was created in 2012 to solve payment issues. XRP was designed as a better version than BTC.

XRP can be transferred directly without intermediaries, making it an effective bridge between different currencies. Investors can easily buy XRP on major exchanges like Binance and Huobi. Wallet support is diverse, including cold and hot wallets.

5.1. XRP Ledger Consensus Protocol

XRP Ledger uses a consensus mechanism called the XRP Ledger Consensus Protocol, different from any previous projects. Important attributes:

• All XRPL users can agree on the latest state and order of transactions
• No central authority is needed to validate XRP token transactions

• Participants joining, leaving, or misbehaving don’t prevent XRPL improvements
• Validators compare proposals and validate quickly, requiring low resources

The system ensures: Correctness – Agreement – Forward Progress

5.2. XRP Coin Info

• Ticker: XRP
• Consensus: XRPL
• Price (today): $0.4194 USD
• Market Cap: $20,317,780,251.40 USD
• Max Supply: 100,000,000,000 XRP
• Circulating Supply: 48,343,101,197 XRP

Token Addresses:

• BEP‑20: 0x1d2f0da169ceb9fc7b3144628db156f3f6c60dbe
• Klaytn: 0x9eaefb09fe4aabfbe6b1ca316a3c36afc83a393f

The project currently has no token burn policy, but the CTO has acknowledged that nodes, validators, and the community could initiate a burn if they vote—something Ripple cannot prevent.

5.3. XRP Token Allocation

100 billion XRP were pre-mined in early 2013 as the maximum supply. Allocation:

• Founders: 20 % — Chris Larsen & Jed McCaleb ~9.5 billion each; Arthur Britto 1 billion
• Ripple: 77.8 %
• Airdrop: 0.2 % (test airdrop to some traders)

In 2014, Chris Larsen donated 7 billion XRP to charity; Jed McCaleb moved 2 billion XRP to a donor/advisor fund. He later left the project under an agreement limiting his monthly withdrawals and daily sales.

6. OVERVIEW: RIPPLE XRP LAWSUIT

According to the latest 2022 information, final judgment on XRP’s fate was expected by the end of the year. Here’s a summary of key events:

• Late 2020: U.S. SEC accused Ripple of conducting an unregistered securities offering with XRP
• SEC also charged Ripple, Chris Larsen, and CEO Garlinghouse with illegal token sales
• After ~40 days without response from Ripple Labs, the project’s official Twitter reaffirmed their stance and supported investor confidence

Ripple submitted a 93-page legal response with four main defenses:

• XRP is not an investment contract
• SEC’s stance is outdated regarding whether XRP must register as a security
• Distinction exists between XRP and other coins
• SEC misrepresented statements out of context

The final verdict on the case has yet to be announced, but it has already attracted a lot of attention from investors and traders, as the decision will partly reveal how officials in the US view innovation and blockchain technology.

7. IS XRP COIN POTENTIAL?

There’s no denying XRP’s lawsuit has affected its price. Here are key strengths and weaknesses:

Advantages	Disadvantages
Fast and cheap XRP transactions	Ripple’s consensus mechanism considered less secure
Payment network used by financial institutions	Institutions use Ripple’s network, not XRP coin specifically
XRP usable by small enterprises	Difficulty buying XRP in the U.S.
XRP token serves as a currency bridge

8. SUMMARY

Putting the lawsuit aside, Ripple and XRP coin show clear potential. They could replace outdated international money transfer systems, and their existing partnerships with banks are promising. Therefore, the final outcome of the Ripple vs. SEC case—i.e., whether XRP wins—could significantly impact XRP’s price and investors holding the token.