In the cryptocurrency world, confusion often arises between the terms Ripple, XRP, and the XRP Ledger. Brad Garlinghouse, the CEO of Ripple, was explicit in distinguishing these elements in 2022: “Let’s be clear, Ripple is different than XRP.” Understanding the relationship among these three—company, cryptocurrency, and blockchain—remains vital for investors and enthusiasts alike.
The origin of this confusion can be traced back to the early branding of these entities. Initially, during its launch in 2012, the XRP Ledger was called the Ripple Consensus Ledger, leading many to refer to it simply as “Ripple.” This naming convention persisted even after the company evolved from its initial identity as NewCoin to Ripple. Later, Ripple’s rebranding entrenched this confusion further, contributing to the ongoing mix-up.
Media outlets and cryptocurrency exchanges have also played a role in perpetuating the misunderstanding. They often refer to XRP as “Ripple” in headlines and articles, confusing buyers who might believe they are investing in the company rather than the cryptocurrency. For instance, during a May 2021 interview with CNBC, Garlinghouse corrected the network’s mislabeling by emphasizing the distinction between Ripple and XRP.
Ripple, the company, is deeply involved in the development of use cases for the XRP Ledger, which operates independently. Ripple holds a substantial portion of XRP supply, using it to fund its payment solutions and drive adoption for the XRP Ledger. With over 300 financial institutions, including major banks and payment providers, RippleNet serves as an alternative to traditional payment networks like SWIFT, focusing on faster and cheaper cross-border transactions. Ripple has also explored various financial products, including On-Demand Liquidity (ODL) and stablecoin solutions.
XRP, the cryptocurrency itself, was designed to facilitate international payments, allowing for minimal transaction fees and rapid processing times—typically between 3 to 5 seconds. All 100 billion XRP tokens were pre-mined at launch, with 80 billion set aside for Ripple to fund market growth and payment solutions. Currently, about 59.8 billion XRP are in circulation.
On the other hand, the XRP Ledger serves as the underlying blockchain. It operates as a decentralized public ledger, with no single entity holding full control. The network utilizes a unique consensus mechanism that ensures transactions are validated quickly and without the energy-intensive process of mining seen in other cryptocurrencies. This makes XRPL more environmentally friendly and efficient, capable of handling up to 1,500 transactions per second.
Looking at the future, the legal outcomes from Ripple’s lengthy battle with the SEC have resulted in growing institutional adoption and recognition that XRP does not classify as a security. This clarity may open the door for further innovations and integration within the financial ecosystem. The XRPL is also expected to expand, especially with the launch of the Ethereum-compatible EVM sidechain, which can facilitate the development of decentralized applications and blockchain projects.
As the cryptocurrency space continues to evolve, distinguishing between Ripple, XRP, and the XRP Ledger remains a critical aspect for investors. Understanding their unique roles can help in navigating the complexities of this growing and rapidly changing market.
