The History of Ripple XRP | Empirex Capital

The History of Ripple XRP

Empirex Capital takes a look at XRP, where the coin came from, and what's new with Ripple.

We must first know that XRP is a cryptocurrency designed as an alternative to Bitcoin, with a focus on facilitating trustless, instant and cheap cross-border payments. Like Bitcoin, XRP relies on a public ledger, called XRP Ledger, for storing transaction details.

The History

The idea behind Ripple and its native token predates the crypto industry and Bitcoin itself. In 2004, John Fugger launched a peer-to-peer (P2P) financial network called RipplePay. The goal was to capitalize on the financial relations between network participants to eliminate the need for banks. In essence, if participant A trusts participant B, then B can act as a third-party whenever A wants to transact with another participant trusted by B.

This concept would later serve as the cornerstone of the crypto model that Jed McCaleb — an early Bitcoin pioneer and founder of Mt. Gox exchange — proposed as an alternative to Bitcoin back in 2011. McCaleb concluded that Bitcoin mining was an excessively resource-hungry and expensive system that would eventually undermine the usefulness of Bitcoin. And so he approached Fugger with a plan to evolve RipplePay into a crypto network. In 2012, Fugger officially handed over RipplePay to McCaleb and Chris Larsen — a serial entrepreneur and today, Ripple’s executive chairman.

Shortly after the handover, the team started building the first iteration of Ripple, called OpenCoin. Subsequently, the company’s name changed twice between 2012 and 2015. Notably, the project also underwent a series of cultural and systemic changes. The most significant was the switch to the Ripple Gateway system.

Recall that Ripple had initially opted for a peer-to-peer architecture. In the course of evolving their ideas, the team came to believe that reputable businesses, of a sufficient size, would be needed to ensure users’ trust. These businesses are what Ripple calls Ripple Gateways. This change in architecture marked a sharp shift towards a hybrid system that combines traditional banking structures with a peer-to-peer network.

This combination would later prove to be pivotal to the project’s popularity in the traditional financial sector, as established financial institutions viewed it as a less unfamiliar route into engaging with the crypto and blockchain industry.

Ripple Partnerships

One of Ripple's main use cases is to facilitate the cross-border transfer of money. In achieving this aim, Ripple has had many high-level partnerships with financial institutions that make use of its services. For example, before the partnership ended in March 2021, Ripple and MoneyGram worked together (MoneyGram used Ripple's cross-border payment and foreign exchange settlement product).

In June 2020, Banco Santander (one of the largest banks in the world) partnered with Ripple to use its One Pay FX service — a jointly developed cross-border payments system. And in November 2020, Bank of America was confirmed as a user of RippleNet, along Santander, Standard Chartered and others.

Created on 15th Jun 2021