Connect with us


What is Ripple? | The Ultimate Beginner’s Guide



What is Ripple

Ripple is a distributed open source internet protocol that facilitates a real-time gross settlement system (RTGS), currency exchange, and remittance network. Ripple is most often used by banks and other financial institutions to fortify their operational infrastructure. According to the Ripple website, they are the world’s only enterprise blockchain solution for global payments.

The name Ripple refers to three things: Ripple Labs (the company that oversees the development of Ripple), the Ripple Transaction Protocol (RTXP), and the network’s native cryptocurrency, XRP, or simply Ripples.

We’ll cover each of these components in the following topics:

Ripple’s story goes back to 2004 when Ryan Fugger, a web and decentralized systems developer, was working on a local exchange trading system in Vancouver. His goal was to develop a decentralized monetary system that would allow people to create a medium of exchange for whatever purposes they saw fit. He eventually launched the first iteration of this idea with

In 2012, developers Jed McCaleb and Chris Larsen approached Ryan Fugger with their idea for a digital currency. The system would rely on transactions verified by a consensus process among members on the network, instead of the mining verification method used by Bitcoin and many other cryptocurrencies.

After deliberation with McCaleb and others within the Ripple community, Fugger decided it was best to allow McCaleb and Larsen to take over Ripple. Following this decision, McCaleb and Larsen co-founded OpenCoin.

From there, OpenCoin immediately began working on the Ripple protocol (RTXP) and the Ripple payment and exchange network. The company received angel funding from several different venture capital firms.

Things were looking great for OpenCoin, but less than a year after its founding, McCaleb left the company. On September 26, 2013, OpenCoin officially rebranded themselves as Ripple Labs, Inc. and decided to become fully open-source as they released the peer-to-peer full node Rippled. By becoming open-source, the Ripple protocol was now viable independently from Ripple Labs. While they can and still do lead the development on the network, the Ripple network technically does not need the company in order to remain active.

The next few years would prove difficult for Ripple, as they received a $700,000 fine from the US Treasury’s Financial Crimes Enforcement Network (FinCEN) for “willful violation of the Bank Secrecy Act by acting as a money services business without registering with FinCEN.”

By corporatizing themselves, Ripple Labs exposed themselves to government regulation in a way that some other cryptocurrencies are safe from. Bitcoin, for example, is not backed by a corporate entity and leaves any sort of regulatory liability on the users of the network rather than a centralized group.

After their run in with FinCEN, Ripple obtained a virtual currency license from the New York State Department of Financial Services. This allowed Ripple to continue business as usual and Ripple became only the fourth company to hold a BitLicense, or a business license of virtual currency activities. Now that Ripple was a fully licensed and recognized virtual currency firm, they were able to continue operation.

By this point, Ripple had been working on several Ripple protocol projects and the shift away from a simple peer-to-peer currency had begun. The protocol had been adopted by a growing number of financial institutions as an alternative remittance option for consumers. Remittance refers to a transfer of money by a foreign worker back to their nation of origin.

This shift was seen as an opportunity by Ripple’s CEO Chris Larsen as he said in 2014,

“…we think that the bigger opportunity is not just to create another digital currency — there are plenty of those — but rather to use that technology as a way of building a settlement system with no central operator.”

Ripple began collecting partnerships with major financial instructions around the world. Companies like American Express, BMO Financial Group, the Royal Bank of Canada (RBC), and many others have identified Ripple as a means to bolster their operations. Some see it as a way to fight back against other cryptocurrencies often viewed as direct competitors to banks.

Ripple Partnerships

Those who consider their investments in digital assets as a means to insulate themselves from the corruption and general failings of the traditional banking system often view Ripple with distrust as it is clear that Ripple has aligned with their perceived enemy.

That being said, Ripple is seen as a safe entry point into crypto investing by some simply because of its banking utility. Many digital currencies claim to have world changing technology with not much to back up their claims. Ripple on the other hand, has proven utility and the trust from the banks has drawn the attention of traditional investors and large sums of money.

The Ripple Protocol Consensus Algorithm is the title of a white paper published by Ripple Labs in 2014. The paper addresses failures in traditional transaction systems and distributed payment systems like blockchain-based cryptocurrencies.

In contrast to these other cryptocurrencies, the Ripple protocol uses a common shared ledger, or distributed database, and operates with a consensus protocol to validate transactions and account balances on the network. This differs from the typical proof-of-work system used by Bitcoin and other blockchains. Proof-of-work requires computers connected to the network to act as miners, where the computing power of their hardware is used to validate and compile ledger entries, earning rewards when blocks are completed.

The consensus protocol of Ripple validates transactions in a way that improves the overall integrity of the system to prevent double spending. Distributed nodes on the network confirm transactions by participating in a poll that determines the majority vote on whether the transaction was carried out properly. For example, if you had 50 XRP in a wallet and you tried to send the entire balance to multiple addresses, the validators on the network would be polled to determine which transaction input occurred first. Only the first input would be recognized and completed.

XRP is the native currency used on the Ripple network, not unlike Bitcoins or Ether on the Ethereum network. However, XRP, in contrast to the above coins, is primarily designed as a liquidity instrument of the Ripple network. It acts as a bridge currency, meaning it can allow for transactions between two typically unrelated currency pairs.

There are other currencies on the Ripple network, but XRP is the only one free from counterparty risk, or the possibility that a counterparty will not fulfil their obligation to pay. This is a risk native to insurance policies, bonds, or other contracts.

During the development of Ripple, it was determined that there would be 100 billion total XRP to be introduced into the market. Of the 100 billion created, 20 billion were retained by the founders of Ripple Labs. XRP are divisible by up to 6 decimal places. The smallest unit is called a drop with 1 million drops totaling 1 XRP.

Suggested Reading Why is Ripple so cheap?

Ripple is designed to facilitate fast, seamless transactions between banks, payment providers, corporations, and digital exchanges. The network utilizes multiple instruments, like XRP, to complete transactions that are typically slow and costly.

XRP can act as a bridge currency between other currencies and assets. It allows for the open exchange of fiat and cryptocurrencies by creating liquidity without the need to increase your holdings of liquid assets.

One way this would prove useful compared to traditional banking would be their use of nostro accounts. A nostro account is an account in which a bank holds a foreign currency in another bank. Most of the large commercial banks of the world have nostro accounts in every country that uses a convertible currency.

Ripple eliminates the need for these accounts because instead of holding all of these currencies in reserve, you can simply hold an amount of XRP and complete foreign exchange transactions as needed without all of the added accounting measures.

Perhaps the most important feature of performing business transactions with Ripple is that it is nearly instantaneous. Everyone knows the struggle of receiving a check and waiting for it to clear; standard transactions can take days to complete. Ripple transactions, on the other hand, can be initiated and verified in seconds, and that includes foreign exchange processes that are even more costly and time-consuming.

Ripple is one of the most polarizing matters in the cryptocurrency community and it all stems from one concept. Decentralization.

Decentralization is the majority goal of blockchain developers. They distribute decentralized ledgers so that no central force can impose undue influence on the network and its users. Ripple is often accused of being a centralized cryptocurrency for three reasons. Ripple Labs is holding 20 billion XRP, they control the non-circulating total of XRP in addition to that 20 billion and they have solidified themselves as the most trusted validator on the Ripple network.

In the XRP section of this guide, it is mentioned that Ripple Labs created 100 billion XRP. This is already a deviation from the norm as cryptocurrencies are typically created through mining by users on their network. The Ripple creators then decided to retain 20 billion XRP for themselves.

Now this is obviously controversial as it gives just a handful of people 20% of the entire supply of a currency. On an open market, these few massive holders hold incredible power. They could theoretically dump their holdings and crash the price.

Not everyone sees this as a problem though. Supporters consider the retention of Ripple by its creators as no different than founders of a company holding a certain number of shares when their business goes public.

Nevertheless, some of the Ripple founders have agreed to slowly sell their holdings of XRP at a careful rate over several years in order to add stability to the market. Some of their holdings have also been donated to worthy causes.

This leads us to what happened to the other 80 billion XRP. As of the time of this writing, over 39 billion XRP are in circulation. With the majority of the currency in the hands of the company that created it, some believe this makes Ripple Labs too powerful in the financial ecosystem it created. Crypto markets are not mature and prices can fluctuate wildly when large holders decide to buy or sell holdings.

Perhaps the biggest concern Ripple opponents have with the controversial cryptocurrency is its role in maintaining the network. Ripple Labs is the primary validator on the Ripple network, meaning they could potentially do anything they wanted to their distributed ledger. As mentioned above, it is theoretically true that the Ripple network could continue operating without the control of Ripple Labs, but at the moment, they hold a monopoly on its processes.

Ripple has recognized these criticisms, however, and is working on a plan to implement a decentralization strategy. They are encouraging additional validators to join the network, leading them away from a monopoly on the system. If these additional validators are free from the control of Ripple, then over time the system could become truly decentralized and the network could upgrade and evolve as the community sees necessary.

Although those decentralization strategies are official statements, Ripple critics remain skeptical. Banks are seen as the enemy in this metaphorical war, and Ripple has chosen its side.

Even though XRP is markedly different from most digital assets in terms of technology and usage, it can be purchased on many of the world’s popular cryptocurrency exchanges.

Check out our guide step-by-step on how to buy Ripple XRP here.

There are many options for storing your XRP after you acquire it from an exchange. Digital assets traded on exchange will be stored in their hosted wallets and they belong to you, but it is not a good idea to leave your funds in an exchange’s wallet, as there have been instances of hacking in the past, most notably the Mt. Gox hack that resulted in about 850,000 Bitcoins being stolen.

While Bitcoin wallets are free, Ripple wallets require 20 XRP to hold your wallet address. Because of this, it is advisable to store your XRP on a single wallet rather than across several.

One of the best options for XRP storage is a hardware wallet called the Ledger Nano S. Hardware wallets are often considered to be one of the most secure methods of storing your cryptocurrencies, and the Ledger Nano S supports XRP along with a number of other coins.

For our comprehensive guide to the best XRP wallets, click here.

Ripple is lumped in with the thousands of cryptocurrencies because of similar underlying technologies and financial implications, but it is something that is fundamentally unique. By focusing on partnerships with banks and major corporations, Ripple is on a different path than that of Bitcoin, Monero, or other projects that are built around the idea of disruption. Ripple isn’t trying to disrupt banks, it is trying to give the banks a fighting chance against the wave of cryptocurrencies gunning for them.

The post What is Ripple? | The Ultimate Beginner’s Guide appeared first on UNHASHED.



Beware: Latest Ledger Email Phishing Scam Making The Rounds



Consumers who have purchased Ledger hardware wallets have been waking up to nasty emails claiming that their crypto assets are in danger of being stolen. It is the latest in a long list of phishing attacks designed to lure the uninitiated into divulging their secret phrases or downloading malware.

The first round of spurious emails was asking for the 24-word recovery phrase and Ledger responded with a warning emailed to customers confirming that it would never ask for this.

The second round of emails is a little more insidious as they claim that a data breach on Ledger servers has affected the wallet associated with the target email account. It asks users to download the latest version of Ledger Live, via an email embedded link, and reset their PIN numbers.

It was reported that Ledger did suffer a data breach in July resulting in 9,500 users having their personal information compromised.

Ledger scam email

Sneaky Social Engineering

On initial glance, the email looks genuine but there are a number of key giveaways that are easy to spot for the trained eye. Firstly, the domain name is not from but

Secondly, hovering over the link in the box (but being careful not to click it) reveals a dodgy URL; which is likely to result in the downloading of malware which may be able to log keystrokes, steal credentials, or mine cryptocurrency.

Crypto investors and traders have already taken to twitter to share this phishing scam and warn others about it;

Additionally, Ledger itself has published a list confirming knowledge of these phishing attempts and reinforcing the premise that funds are safe providing the recovery phrase is;

The company stated that nobody, including Ledger, should ever ask for the PIN number of recovery phrase, but this latest email was a call to action prompting the clicking of a malicious link.

Risk Mitigation

Hardware wallets, such as those produced by Ledger or Trezor, take an extra step to mitigate these risks. Ledger stated that crypto assets cannot be sent from a Ledger device unless the user physically connects it to the computer and verifies the transaction on both the computer and the device.

If malware is controlling the PC or smartphone, it cannot control the Ledger wallet, even when it is plugged into the computer.


Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).


Continue Reading


After The Storm: Bitcoin Holds $13K Despite Wall Street Monday’s Plunge



Despite a brief price slump to $12,800, Bitcoin has perhaps indicated signs of decoupling from the stock markets. Wall Street bled out rather viciously yesterday, while BTC has risen above $13,000 again.

Bitcoin Decouples From Stocks?

During the past several weeks, Bitcoin’s price performance has resembled that of the US stock markets. For example, when news broke out that US President Donald Trump tested positive for the COVID-19 virus, both asset groups tanked. Shortly after, when Trump left the hospital, BTC, and the stock market surged.

However, Bitcoin displayed a few yearly signs of decoupling last week. The three most prominent US-based stock indexes, namely the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average, lost value, while BTC went on an impressive roll, resulting in a fresh yearly high of above $13,350.

Yesterday’s trading session was also quite negative for Wall Street. The growing COVID-19 confirmed cases and concerns regarding the new US stimulus brought massive drops. The S&P 500 and Nasdaq declined by nearly 2%, while the Dow closed with a 2.3% decrease.

Initially, Bitcoin also followed the adverse performance. BTC was trading high above $13,200, but it vigorously tanked to its daily low of about $12,800. However, the primary cryptocurrency has recovered most of its losses since then and trades closely to $13,100.

BTC/USDT. Source: TradingView

Red Dominates The Altcoin Market

On a 24-hour scale, most altcoins have lost significant chunks of value. Ethereum has dived by 3% and trades well below $400. Just a few days ago, ETH touched $420.

Ripple (-1.8%) has dipped beneath $0.25. Bitcoin Cash (-3.1%), Chainlink (-4.6%), Cardano (-1.5%), and Litecoin (-2%) are all in the red from the top 10.

There’re two obvious exceptions – Binance Coin and Polkadot. BNB has jumped by over 1% to $31.26, while DOT has surged by 9% to $4.7.

Cryptocurrency Market Heatmap. Source: Quantify Crypto

Further losses are evident from lower and mid-cap altcoins. Quant leads the way with a 13% decrease. Reserve Rights (-10.3%), HedgeTrade (-10%), CyberVein (-10%), Elrond (-9%), and Ampleforth (-8.5%) follow.

Nevertheless, a few coins are deep in green as well. Kusama is the most impressive gainer with a 26% surge, Ocean Protocol (14%), and Velas (9%) are next.


Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Continue Reading


Here’s Why Bitcoin’s Hashrate May Drop Further This Week



Yesterday, the Bitcoin network witnessed approximately 22 exahashes per second (EH/s) exit the ecosystem, as noted by Hashr8’s Thomas Heller on Twitter.

The self-professed “mining maximalist” also shared his estimation that we’ll see the BTC mining difficulty decline somewhere between 7.4% to 8.8% by the end of the week — a drop that, if true, would be the worst negative difficulty adjustment since the infamous, COVID-19-induced “Black Thursday” crash in March.

However, none of this is a mere random anomaly or coincidence.

Bitcoin’s hash rate has dropped significantly over recent days, with further drops likely. Source:

Seasonal Migration

The root cause of Bitcoin’s hash rate drop may be attributed to the end of the rainy season in China’s Sichuan province — where miners seasonally migrate to to reap the advantages of cheap hydro-electric power as the rains raise water levels and, in turn, BTC miners’ profit margins. This has made Sichuan one of the world’s foremost Bitcoin mining hotspots… at least, while it’s raining.

Sichuan most recently represented 18.5% of Bitcoin’s global hash rate in the spring of 2020, according to data from the University of Cambridge’s Bitcoin Electricity Consumption Index. However, this share of the world’s BTC hash rate declines after the province’s rainy season.

To put it simply, when the rains stop, the Bitcoin miners leave.

Kevin Zhang of Foundry, a subsidiary of Digital Currency Group, also noted that approximately 20 EH/s left the Bitcoin network yesterday — illustrating a weekly-average hash rate of 132.9 EH/s against the daily hash rate of 112.9 EH/s.

Sichuan represented 9.66% of Bitcoin’s hash rate in China in April 2020. Source: Cambridge Bitcoin Electricity Consumption Index

The Bitcoin Network Resolves Itself

While the Bitcoin network is currently hemorrhaging hash rate, there’s little reason to fear.

As noted by Heller, the seasonal migration of Bitcoin miners will likely see many relocate out of Sichuan into places like Xinjian or Inner Mongolia — both of which are also powerhouses when it comes to the leading cryptocurrency’s hash rate.

Still, the rainy season won’t return again until next year — a fact which will undoubtedly be, at least temporarily, reflected in Bitcoin’s hash rate.

However, the Bitcoin network automatically undergoes regular mining difficulty adjustments that have, historically, ensured a competitive environment remains… even during the most FUD-inducing times.


Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).


Continue Reading