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MISSION

"​Built for enterprise use, XRP offers banks and payment 
providers a reliable, on-demand option to source 
liquidity for cross-border payments."

Ripple's main service is RippleNet, described as a “a global network of banks and payment providers using Ripple’s distributed financial technology, which provides real-time messaging, clearing and settlement of financial transactions”.

There is definitely demand for Ripple's mission within the financial services industry. Competition may be a challenge for Ripple as banks and financial institutions decide to make their own digital currencies to facilitate more efficient fund transfers. 

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NICHE

The way Ripple's process works is similar to the ancient South East Asian Hawala system that is often used to sent remittance payments across borders. 

RippleNet consists of network users (corporations, SMEs, small banks, and payment providers) who send payments, and network members (banks and payment providers) that process payments, and source liquidity.

Network users have xVia which is an API-based interface to originate payments through their banking partners. xVia-  

• Allows access to global networks for on-demand payments, in real-time, with data attachments (i.e. invoices). 
• Transactions include fully visible payment status and delivery timing.  

Network members use Ripple's xCurrent for real-time payment settlement. xCurrent-

• Has bidirectional messaging.
• Payments are pre-validated. 
• Payments can include data attachments.

Network members source liquidity with xRapid- 

• Provides access to on-demand liquidity through digital assets.
• Lowers costs. 
• Reduces amount of nostros (bank accounts held at other banks, usually used to facilitate international transactions) required for global payments. 

Ripple uses market makers and a path-finding algorithm to optimize cost and transaction time among assets. Market makers are often institutions that hold balances in multiple currencies, and connect to multiple gateways. The market makers' job is to facilitate transactions among parties who do not already have established trust. The more market makers there are, the more efficiently the network operates. 

Ripple is doing a great job within their niche, because they have over 200 banks and payment providers worldwide, in their network, as of Q3 2019. 

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HISTORY & TIMELINE

Ripple was established in 2012, which makes it the third oldest cryptocurrency within the top 25 market cap; behind Bitcoin (2009) and Litecoin (2011). 

• Ripplepay.com was launched by Ryan Fugger (decentralized systems developer) in 2005, and is eventually what morphed into the XRP ledger. 
• Prior to 2011, Jed McCaleb (the former owner of Mt Gox, now Co-Founder and CTO at the Stellar Development Foundation),  was working on a decentralized p2p file sharing network called eDonkey.
• In 2011, Jed McCaleb, Arthur Britto and David Schwartz began working on development of a digital currency system. 
• In 2012, Chris Larsen (background in Silicon Valley tech startups) joined Jed and Jessie Powell (Founder and CEO of Kraken) to reach out to Ryan Fugger about their payment system idea. After negotiations, Fugger gave them control over Ripplepay. 
• September 2012, the same group founds OpenCoin Inc, which goes on to develop the protocol, building on the work done by Fugger, the founders and initial architects.
• Here is a link to Ripple's funding rounds. 
• 100 billion supply of XRP originated in 2012. 20 billion were retained by Jed McCaleb, Chris Larsen, and Arthur Britto; the other 80 billion were given to OpenCoin, in order to help fund development of the Ripple Ledger. Most of this 80 billion was placed in a cryptographically secure escrow account (also referred to in "Token Dist" section) to contribute to stability of supply release and minimize concerns of OpenCoin or one of its founders dumping supply on the market, which would greatly affect the price of XRP. 
• 2012-2013- airdrops of XRP to forum participants were used to promote Ripple, within the cryptocurrency community. The XRPTalk/XRPChat forum became a huge seed pool for the large number of community members Ripple has, today.   
• Built on open-source technology since 2013.
• September 2013, OpenCoin rebranded to Ripple Labs. 
• October 2015, Ripple Labs rebranded to Ripple. 
• 2015- Lawsuit by FinCEN labeled Ripple as a currency, not a security. 
• 2015- Ripple's balance freeze feature was used to lock up Jed McCaleb's funds when he tried to pre-maturely cash out. 
• 2016- A lawsuit is settled involving founder Jed McCaleb selling a large portion of his XRP holdings, outside of what had been arranged in a 2014 agreement. 
• 2017- R3 sued Ripple for specific performance of an option agreement in which Ripple agreed to sell up to 5 billion XRP for a certain price. Ripple countersued claiming that R3 reneged on a number of contractual promises, and was acting in a spirit of opportunism after prices had subsequently increased more than 30 times. A Delaware judge ruled in favor of Ripple, however the case is still continuing in California and New York. 

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LEADERSHIP

Ripple has an extensive leadership team and board of directors, with strong backgrounds in tech and banking.  

This may be a good time to note that I've heard of Ripple representatives getting boo'd offstage at large cryptocurrency conferences. This is likely due to the fact that digital currency purists are proponents of decentralization, and Ripple is notorious for being relatively centralized, particularly in the way they perform consensus and how they manage supply of their native XRP currency. 

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TOKEN DISTRIBUTION/INFLATIONARY CONTROLS

Total supply 100 billion. 
Circulating supply as of Q3, 2019 = 42.5 billion.

​55 billion XRP were locked in escrow to be released over the course of 55 months with the goal of providing some supply predictability and stability. Any unused XRP (of the 1 billion per month) gets returned to escrow.  

Unlike many other cryptocurrencies, Ripple is relatively centralized, with new coin creation and circulation being controlled by the Ripple Labs company; not through decentralized mining, staking, etc. Here is a link to data on how (de)centralized generation and holdings of top crypto projects are. This centralized control over supply is why a lot of original crypto enthusiasts dislike Ripple. 

Ripple is built with a high level of liquidity, which aids in it's mission to provide fast global payment rails for financial institutions. Ripple Net is known to settle transactions in about 4 seconds, and can handle about 1,500 transactions per second. Through its more centralized nature and consensus structure, it's able to process more transactions, and be faster than, Bitcoin and Ethereum.   

As I mention for supply of EVERY asset, ever- "The supply only matters as much as there is demand to outpace it. This is what determines price" 
​

Comments from Ripple's CTO on the nature of it's supply generation and release:

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CONSENSUS

Ripple does not use Proof of Work or Proof of Stake. Ripple uses the Ripple Protocol Consensus Algorithm (RPCA), which is a distributed agreement protocol, to determine proper order of transactions and if a transaction is valid. Each ledger is determined by a consensus of participants; not a miner building a block with the transactions they want.   
​
There is not block reward incentive in RPCA. Many argue that this does not encourage enough decentralized participation. 

Ripple's consensus process incurs minimal energy consumption, especially compared to PoW. 

Ripple employs use of a "Unique Node List" to determine nodes that are trusted within the network, and thus can help build a candidate set of transactions to update the ledger with. When a trusted node sends in a transaction proposal that matches a transaction in the candidate set, that transaction receives one vote. This process continues for a specified amount of time, and if a transaction gets at least a 50% approval rating within this given amount of time, the transaction is then packaged into a new proposal. The new proposal is then distributed to trusted nodes and the process of voting on valid transactions continues, this time with an approval threshold of 60%. This process continues to 70%, then 80%. When 80% is reached, a ledger is considered valid, and the consensus process for that newest ledger is closed and added to the Last Closed Ledger, discarding any transactions found to be invalid. In each iteration, disputed transactions are disposed of until the initial 80% threshold is reached.

Even though Ripple has a relatively fast and efficient consensus protocol to run its network, this is done so at the price of increased centralization. This is often the case with consensus protocols; a trilemma tradeoff among speed, security, and centralization. 

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SECURITY

As far as ensuring that transactions are valid, and not double spent, the Ripple consensus mechanism is only as secure as the trusted nodes on its "Unique Node List". The number of "trusted" entities in control of validating the ledger, and the concentration of money supply, is very centralized relative to other digital currency projects. A lot of security is based on trusting these relatively few entities.    
It has a minimum transaction fee of just 10 drops (0.00001 XRP or approximately $0.0000054 at current rates). This is not paid to any party however and is irrevocably destroyed as an anti-spam feature designed to make it prohibitively expensive to DDoS the XRP Ledger network.

"The XRP Ledger has proven security and stability being the only public blockchain that has experienced no reversed transactions, no censorship and no major operational issues for over five years"

Ripple provides a balance freeze feature to payment gateways, in order to freeze accounts, based on suspicious activity. If a freeze happens to an account, then funds may only be sent back to the gateway that issued the funds. There is also a global freeze feature that freezes all balances issued by a particular gateway. 

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REGULATION:

Because Ripple's target market is banks and financial institutions, which are heavily regulated, Ripple is also subject to more compliance than average, in order to maintain healthy partnerships with the institutions it serves. 

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PARTNERSHIPS:

Ripple has an extensive and growing list of partners, including American Express, and MoneyGram. 

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OPEN SOURCE DEVELOPMENT & MARKETING:

​See Github, Twitter, and Reddit Data sections, under "Crypt Keeper By Criteria", for more details on each project's development, marketing and social media presence. ​