The Rise of Ripple and XRP
Ripple is a real-time payment solution system that uses a public ledger to validate transactions securely across the globe. The public ledger features its own native cryptocurrency- XRP. While Ripple and XRP are related, they are not the same. Ripple is a payment system employed by global financial institutions and XRP is the third most valuable cryptocurrency in a shaky, unpredictable market.
Ripple’s story has it all- innovation, betrayal, and pure genius. The company’s influence on modern financial markets is disrupting the global economy and redefining financial transactions.
Ripple’s technology modernizes financial transactions by decreasing the barriers and costs while transferring money. So far, no other international or cross-border platform does this as efficiently.
Ripple’s innovation remains more relevant than its drama. The company is a fixture with traditional financial institutions and the cryptocurrency market. In fact, Ripple’s innovations and business acumen may very well erode the barriers between the two.
Ripple continues to increase in popularity through incessant innovation and strategic partnerships. Let’s explore the massive impact of Ripple and XRP on global finance and identify the people and ideas behind it.
What is the Difference Between Ripple and XRP?
Ripple is the aforementioned company focused on improving the way money is transferred throughout the globe. They created an open-source cryptocurrency- XRP– as a digital asset to help facilitate cross-border financial transactions.
Ripple’s transaction speed is faster than its primary competitor- Bitcoin. The average transaction takes approximately 4 seconds while Bitcoin’s transactions take anywhere from 10 minutes to 16 hours. It’s also less expensive to transfer money with Ripple.
The XRP coin is currently the third largest cryptocurrency by market capitalization. Unlike Bitcoin, XRP is not created through a mining process. Ripple created 100 billion XRP coins and claims they’ll never create more. Ripple owns 61 billion of the 100 billion coins in circulation. However, approximately 50 billion XRP coins are held in escrow to be systematically released as purchased.
XRP uses a common ledger that is managed by independent validating servers that compare transactions. All transactions are verifiable and transparent because the validating servers are available to both individuals and banks.
The History of Ripple
Ripple was initially founded by Ryan Fugger in 2004. After working on a Vancouver exchange system, Fugger was inspired to create a way for people to make their own money.
Successful programmer and cryptographer Jed McCaleb was inspired by Fugger’s system and developed a financial exchange system that verified transactions through member-consensus.
Jed McCaleb hired two extremely talented programmers- David Schwartz and Arthur Britto. The trio possessed all of the technical capacity to create the platform.
However, a unique business mind was necessary to ensure the viability and success of the idea. Enter angel investor and Silicon Valley based businessman Chris Larsen. Larsen, equipped with a Stanford MBA and noteworthy corporate experience, proved to be a wise choice for CEO of Ripple.
In 2012, Jed McCaleb and Chris Larsen approached Ryan Fugger with their idea. Fugger loved it and granted McCaleb and Larsen control of the company shortly thereafter. They launched a company called OpenCoin and secured over $2 million in funding from multiple investors.
In September 2013, Jed McCaleb and Chris Larsen changed the company name to Ripple Labs Inc. and announced the platform would be open source. This meant the computer code used to create the platform would be accessible to the public.
Not long after the name change- Jed McCaleb and Chris Larsen found themselves at odds.
From Perfect Team to Fierce Competitors: The story of Jed McCaleb and Chris Larsen
When Jed McCaleb brought his girlfriend Joyce Kim onboard at Ripple, tensions with Chris Larsen amplified. Kim, and experienced executive herself, became a threat to Larsen’s position. McCaleb and Kim allegedly teamed up to oust Chris Larsen from the company on multiple occasions.
McCaleb insisted on giving Kim the title Chief Engagement Officer. As mentioned, Chris Larsen was Chief Executive Officer (CEO). Joyce Kim and Chris Larsen having the same acronym caused confusion and seemed to be subtle attack on Larsen’s authority. Furthermore, several insiders recount Joyce Kim frequently discrediting Chris Larsen while publicly praising Jed McCaleb.
It’s also rumored Jed McCaleb and Joyce Kim approached several key company members attempting remove Chris Larsen as CEO. Needless to say- working conditions became difficult. Joyce Kim was soon removed from the company, but remained involved in business matters. Ripple eventually acquired Joyce Kim’s company- SimpleHoney- after much internal debate.
Unsurprisingly, it seems that the same person that brought Chris Larsen in- Jed McCaleb- wanted him gone. Somebody had to go, but who?
The Departure of Jed McCaleb
Jed McCaleb was co-founder and CTO for Ripple from 2011-2013. Tensions came to a boiling point in 2013. Jed McCaleb had personal ideas for Ripple Labs, Inc. that were not shared by his colleagues- especially Chris Larsen.
Thus, Jed McCaleb parted ways with Ripple and started Stellar.org – which is now a direct competitor of Ripple. It’s rumored that he took the same code used to make XRP- which he co-wrote along with his Ripple CTO replacement David Schwartz and another talented programmer name Arthur Britto.
Surprisingly, Jed McCaleb attempted to sell all of his XRP coins but was prevented from doing so through numerous lawsuits. It seems to be a good thing that he didn’t. In fact, it is said that his current shares are valued at $20 billion- making him one of the wealthiest people in the world! Today, Jed McCaleb and Stellar.Org remain one of Ripple’s top competitors.
From Ripple Labs, Inc to Ripple: Changing Names and Expanding Horizons
Ripple Labs, Inc. rebranded to Ripple after the departure of Jed McCaleb and legal problems in May of 2015 . By 2016, Ripple became only the fourth company to obtain a virtual currency license.
In 2017, Ripple partnered with American Express to produce a blockchain-based payment system that provided real time transactions between the United States and the UK.
In 2018, Ripple formed a partnership with Spanish banking empire Santander to create One Pay FX. One Pay FX became the first mobile app for international payments that leveraged blockchain technology!
The Future of Ripple
Chris Larsen has continuously grown Ripple by partnering with banks and financial institutions globally. Ripple has continuously increased market share by shifting the way money is transferred.
However, there is much debate on if the company’s cryptocurrency is truly decentralized. Many cryptocurrency fanatics believe that XRP is not truly a decentralized currency because the company holds roughly 55% of the coins in escrow. CEO Chris Larsen argues that XRP is obviously decentralized because if Ripple were to go out of business, XRP would still maintain its value and autonomy. Larsen justifies this point by highlighting that “XRP remains as an open-source, permission-less ledger” as stated in his interview with Cheddar on September 6th, 2018.
Irregardless of XRP’s viability as a cryptocurrency, the company is weaving its way into the heart of global financial markets. Ripple continues to play an active role as the connecting piece between financial institutions across boundaries. It doesn’t appear that will slow down anytime in the near future.
The future value of XRP remains unknown. However, it possible Ripple’s corporate partnerships could lead to future price increases in XRP. Whether Ripple, XRP, or cryptocurrency in general, proves viable in the long run remains to be determined.