Menu IconA vertical stack of three ripple xrp value spaced horizontal lines. Cryptocurrency XRP, also known as Ripple, is often confused with the company that created it, Ripple Labs.
XRP in circulation but insists the currency is independent. Ripple uses XRP in one of its products but says investors shouldn’t use the cryptocurrency as a proxy for the entire business. Here’s everything you need to know about how Ripple and XRP are linked. XRP shares a logo, and the name Ripple, with Ripple Labs, a payments company using blockchain technology for cross-border transfers. Both the currency and the company were founded by the same people and the company owns more than half of the currency. XRP as a proxy for Ripple’s performance. XRP is payment protocol and cryptocurrency that is “fine-tuned for transactions,” according to Marcus Treacher, Ripple’s Global Head of Strategic Accounts.
An early version of XRP dates back to 2004 when it was first created by web developer Ryan Fugger. The protocol in its current cryptocurrency form really began in 2012. XRP allows people to send money digitally and is meant to be an upgrade on first generation cryptocurrency bitcoin, which suffers from high transaction cost volatility and slow settlement times. XRP promises to settle transactions in as little as four seconds and claims it can handle up 1,500 transactions per second, far more than the bitcoin network.
That compares to 28,437 for ethereum and 8,240 for bitcoin. Ripple Labs is a company founded in 2012 that helped develop XRP and the current Ripple protocol. 100 billion XRP tokens were issued to run on the protocol and power it. Ripple Labs remained the major contributor to the code. While the people behind both XRP and Ripple are the same, the company insists that the open source nature of the network and the fact that XRP can be publicly bought and sold means that Ripple is not “behind” XRP — merely tangentially linked to it. It’s one of our creations that we’re proud of but it’s separate from the company,” Treacher told BI. We are trying to reinforce the fact that there’s Ripple the company and there’s XRP the currency.
BI pointed out that it’s confusing to have both the company and the asset have the same name, logo, and creators. Treacher said he doesn’t accept that and said Ripple isn’t considering changing its name to differentiate the company. Ripple owns 61 billion of the 100 billion outstanding XRP in circulation. The rest of the currency is traded freely on the open market. Ripple’s domination of XRP has drawn criticism from some in the cryptocurrency community as many are attracted by crypto’s promise of decentralization and the lack of a central authority controlling a currency. In response, Ripple has placed 55 billion of its XRP holdings into escrow.