XRP is the native cryptocurrency of the XRP Ledger, designed for fast, low-cost cross-border payments. While often associated with Ripple Labs, XRP and the XRP Ledger are distinct from the company itself.

XRP vs. Ripple – What's the Difference?

• XRP: The cryptocurrency that exists on the XRP Ledger
• XRP Ledger: The decentralized blockchain network
• Ripple Labs: A company that uses XRP for payment solutions

How XRP Works

Unlike Bitcoin which uses Proof of Work, XRP uses a consensus protocol where trusted validators agree on transactions. This enables:

• 3-5 second transactions: Faster than most cryptocurrencies
• 1,500 TPS: High throughput capacity
• ~$0.0002 fees: Extremely low transaction costs
• Carbon neutral: Minimal energy consumption

Use Cases

XRP is primarily designed for:

• Cross-border payments: Replacing SWIFT for international transfers
• Bridge currency: Converting between fiat currencies
• Liquidity provision: On-Demand Liquidity (ODL) service

The SEC Lawsuit

In December 2020, the SEC sued Ripple Labs, alleging XRP was an unregistered security. In July 2023, a court ruled that XRP itself is not a security when sold on exchanges. The case continues for institutional sales.

Investment Considerations

Before investing in XRP, consider:

• Regulatory uncertainty in various jurisdictions
• Competition from CBDCs and other payment solutions
• Ripple's significant XRP holdings
• Adoption by financial institutions

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