Origin of XRP (Ripple)
XRP is a crypto-asset that was created in January of 2013 by OpenCoin, Inc. which soon after became Ripple Labs, the company we all know today. The Ripple Labs company, under the original agreement, is in charge of developing Ripple software, promoting the network, and giving away & selling XRP.

XRP’s Purpose
XRP is designed to reduce the friction, cost, and settlement time of the existing cross-border payment systems. Ripple and XRP supporters want to bring interoperability to the existing financial system making it more efficient, reliable, inexpensive, and connected.

Payments made with XRP settle in 4 seconds and transaction throughput is estimated to be around 1,500 transactions per second with very low transaction fees, making XRP one of the fastest, cheapest, and scalable crypto-assets. In comparison, Bitcoin settles transaction in about 10 minutes, has a throughput of 7 transactions per second, and is relatively more expensive to use.

The existence of XRP and Ripple reduces the need for international banks and payment processors to hold nostro and vostro accounts with each other in exotic markets. In mature markets, like currency flows between the Dollar and Yen, the movement of currencies are efficient, liquid, and cheap. However, currency flows between financial institutions in developing economies like Mexico and the Philippines have lower reliability, low liquidity, and are more expensive.

Ripple Labs claims that financial institutions trying to send payments into hard to reach places in the global payment system can save up to 70% by using Ripple’s software in conjunction with XRP in lieu of nostro or vostro accounts.

How the XRP Network Forms Consensus
The way the XRP ledger comes to consensus is much different than PoW or PoS based assets like Bitcoin and Ethereum. According to Ripple Labs, the core principle of consensus for the XRP ledger is “a little trust goes a long way”.

Consensus in XRP is led by sets of validators with substantial overlap amongst the sets. Individual validators are a part of sets called unique node lists (UNL). Each participant on the network chooses their own trusted set of validators (UNL), but for participants to agree on the order of transactions participants must choose a UNL that is fairly similar to the sets chosen by everyone else. If a participant’s UNL has less than 90% overlap with the rest of the network, it could cause the ledger of the participant to diverge from others on the network. Because of this potential divergence, Ripple publishes a signed list of recommended validators run by Ripple, industry participants, and other trusted validators.

Consensus among the validators is an iterative process in which validators propose a specific order of transactions with other validators, and the other validators propose their own, with the validators reconciling proposals until there is a consensus amongst the validators about the validity and order of transactions.

The XRP ledger needs a supermajority of these validators to declare consensus for the network to move forward. The threshold for a supermajority in the XRP ledger is 80%. If less than 20% of the validators are dishonest or faulty the network can still make progress. If more than 20% of the validators are dishonest or unreliable the network will not make progress.

A 51% attack is not a threat for the XRP ledger like it is in other networks like Bitcoin or Dash. However, if greater than 20% of the XRP validators are malicious, the networks may have trouble making progress. In a more extreme case, if more than 80% of the XRP validators are malicious, an invalid transaction could be processed by the network. In short, as long as at least 80% of the validators are honest the XRP ledger will come to consensus and move forward as a payments network.

Edge XRP Wallet
User controlled, private, and secure
Shows full transaction history of XRP
Support for Ripple Network Destination Tags
Easily exchange between XRP and many other crypto-assets right within the wallet
Buy & Sell XRP in select regions

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