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XRP is a digital asset created to make cross-border payments faster and cheaper. It runs on the XRP Ledger (XRPL), an open-source blockchain launched in 2012, and is closely associated with the company Ripple, which uses XRP within its payment technology aimed at banks and financial institutions.
How Does XRP Work?
Unlike Bitcoin’s Proof of Work or Ethereum’s Proof of Stake, the XRP Ledger uses a unique consensus protocol where a network of independent validators agree on the order and validity of transactions without mining. This design allows XRP transactions to settle in just a few seconds, using a tiny fraction of the energy required by Proof of Work blockchains.
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Key Features of XRP
- Speed — transactions typically settle in 3–5 seconds
- Low cost — transaction fees are a small fraction of a cent
- Bridge currency — XRP can act as a bridge between two different currencies in cross-border transfers
- Fixed supply — 100 billion XRP were created at launch; no new XRP is mined
What Is XRP Used For?
- Cross-border payments — financial institutions use XRP to settle international transfers quickly
- Liquidity bridging — enabling exchange between currency pairs without pre-funded accounts
- Trading and investment — XRP is widely traded on major exchanges
- Micropayments — its low fees make it suitable for small, frequent transactions
XRP and Regulation
XRP has been the subject of high-profile regulatory scrutiny in the United States, centered on whether it should be classified as a security. This history makes it especially important to stay current on regulatory developments in your jurisdiction before trading XRP — always check the latest news.
XRP vs. Bitcoin: Quick Comparison
| Feature | Bitcoin | XRP |
|---|---|---|
| Primary Use Case | Store of value | Cross-border payments |
| Consensus | Proof of Work | Federated consensus |
| Transaction Speed | ~10 minutes | 3–5 seconds |
| Supply | Capped at 21M, mined | Fixed 100B, pre-mined |
Getting Started With XRP
If you’d like to buy XRP, choose a reputable platform from our Best Crypto Exchanges guide, and store it securely using one of the wallets from our Best Crypto Wallets comparison. New to crypto? Start with What Is Blockchain?.
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Frequently Asked Questions
Is XRP the same as Ripple? No — Ripple is the company; XRP is the digital asset that runs on the independent XRP Ledger.
Is XRP mined like Bitcoin? No. All 100 billion XRP were created at launch, and a portion is periodically released from escrow.
Why do banks use XRP? Its speed and low cost make it attractive for settling international payments compared to traditional correspondent banking, which can take days.
