Professional Insights, Trusted Reviews


By Victor & Grayson
September 9, 2019


The following review is not financial advice. Coin Grades’ ratings and letter assignments reflect the technical and practical viability of these cryptocurrencies in the eyes of the Coin Grades team. As always, we encourage you to do your own thorough research from multiple sources before choosing to invest in any cryptocurrency.


Unbeknownst to many in the cryptocurrency space, the technology that XRP uses is actually several years older than Bitcoin. The project was originally called OpenCoin and founded by creator Ryan Fugger in 2004. The project evolved into what we know it as today when a man named Jed McCaleb and two developers (David Schwartz and Arthur Britto) approached Fugger and formed Ripple Labs. Their vision was to improve the efficiency of cross-border financial transactions by supplying banks with their new, exciting, and unique technology.

In understanding this particular cryptocurrency, it is important to remember that the XRP technology has been around since 2004, while Ripple itself was founded in 2012. Ripple’s initial purpose was to eliminate the need for centralized exchanges to facilitate real-time gross settlements across borders. The company offers several different services to clients, including xRapid, xCurrent, and Xpring.

xRapid uses XRP as a source of liquidity for assets being transferred, which ultimately lowers the cost for the banks or financial institutions using it. Using XRP allows banks to lower the capital requirements for liquidity, since normally banks would need to set up pre-funded accounts with local currencies around the world. With this in mind, XRP serves as a middleman currency to efficiently aid in the transfer of assets throughout different global economies, shortening the times from days to minutes and costs from dollars to cents. RippleNet, a source for open liquidity, is also available to anyone.

xCurrent on the other hand, does not utilize XRP. It is instead a separate technology created by Ripple used to settle cross-border payments instantly with real-time tracking. xCurrent allows financial institutions to securely and instantaneously verify transactions before and after they occur.

Xpring is a startup incubator program, whereby developers can use XRP to work on their own projects. Xpring is a way for Ripple to both promote the use of XRP and encourage innovation within the blockchain space. Unfortunately for XRP investors, it is possible that the gifting of XRP through Xpring has caused receiving entities to sell XRP on the open market, perhaps contributing to some downward selling pressure on the price movement.

Related to Xpring, a Ripple project worth mentioning is Coil, which was founded by their former CTO, Stefan Thomas. Coil is a streaming payment service that allows artists, writers, and developers on any compatible website to get paid in real time to stream their exclusive or public content. Creators can also receive payments in real time through Coil whenever someone consumes their content. They only get this service if they pay $5 a month as a membership fee to the Coil community. Coil is meant to help jumpstart a worldwide creative ecosystem. XPring has played a substantial role in funding Coil. Just recently, Ripple pledged 1 Billion XRP to help the ambitious project.

In all, Ripple has over 200 customers from around the world using their services, including banks, payment providers, and of course, digital asset exchanges. With Coil, they hope to even tiptoe into the online entertainment industry.

The Ripple network is open to anyone and is highly energy efficient. By eliminating exchanges, the Ripple settlement system operates at great speed with near-zero transaction fees. As such, Ripple’s use-case is seen as most advantageous to banks and money remittance services. Unsurprisingly, this is the sector where Ripple has seen the most adoption.

Ripple is also a distributed ledger which keeps permanent records of how much debt each party owes. One can make payments with any currency on the Ripple network, so there has been a lingering debate over whether or not the XRP coin is even necessary. However, XRP plays a significant role in securing the Ripple network, which is one of the reasons behind its relatively high market share, and as mentioned in the overview, XRP is used for both xRapid and Xpring.

XRP has a large total supply––roughly 100 Billion coins. Only around 43 Billion of those are currently in circulation. The majority of the remainder are locked in escrow to be released on the open market at a fixed rate over time, so as to minimize the impact on the token’s valuation. This is arguably related to XRP’s tendency to stagnate in price for long periods of time, despite remaining on a long term upwards trend.

Mining isn’t necessary with the Ripple network, as confirmations are made through a consensus mechanism controlled by different responsible servers. This effectively makes XRP a secure database for recorded financial debt. That debt is simply a record by which each party involved in a transaction can trust each other and ensure that the correct amount of funds are delivered.

XRP helps secure the network because in each transaction, a tiny amount of XRP is destroyed. Although negligible, even for larger transfers, this tiny amount actually deters people from spamming or overcrowding the network, as the bad actors will eventually run out of XRP to spend. Another way XRP helps Ripple avoid network overload is by requiring a minimum amount to open an account. While this slows down the wallet creation process, it adds a layer of security by barring spammers from creating multiple accounts quickly.

The XRP network needs to be both fast and secure in order to process high volume financial transactions. For an everyday user, it may be a bit clunky to send funds with XRP. It requires both a “tag” and an address in order to complete a transaction. A “tag” is a separate code unique to the user’s address. Even though the transaction itself is near-instant, this extra step slows down the process significantly. This is not an issue for large financial institutions, which is Ripple’s primary market.

Ripple’s near-term aim is for XRP to be used as a bridge currency or settlement protocol. As of today, XRP is still not recognized as an unregistered security. It can even be traded on Coinbase in New York, having bypassed the state’s stringent cryptocurrency exchange regulations.

Ripple’s own technology is a competitor to SWIFT, a widely used cross-border settlement gateway. Eventually, Ripple hopes to hold its own and overtake SWIFT as the go-to platform for international settlements, particularly between banks. The company has taken aggressive steps to achieve those ends. Recently, they have partnered with Moneygram and have committed to buying out a portion of their stock at a higher price.

The community surrounding Ripple and XRP is naturally one of the longest lasting and has continued to grow with the market. The team behind Ripple is also one of Ripple’s greatest strengths, consisting of former banking executives and regulatory officials, it is truly one of the most impressive in the entire cryptocurrency space.

Ripple’s eventual goals may be difficult to ascertain, but it can be speculated that if they become friendly enough with banks, they could receive some special treatment that would help promote XRP. There is already evidence of XRP being exempt from securities regulations, despite recent class-action lawsuits. If Ripple has powerful banks behind them, they can cause a massive amount of disruption––perhaps more so than many investors realize. Whether or not XRP itself is needed for this to happen...that is still up for debate.

As mentioned above, XRP helps secure the network and ensures that users are positive contributors. It also provides a financial incentive for Ripple to work harder on adoption, as they do hold a fair share of tokens. The market for remittances and cross-border payments is larger than most people think. If XRP is used as a bridge currency for even a minute portion of big money transfers across the globe, its value is likely to increase, given that people will be incentivized to hold it as a way of minimizing transaction count and cost.

Most of the concerns around XRP’s price revolves around the consistent “dumping” of coins on exchanges, as well as Ripple’s apparent distancing from the native cryptocurrency. Ripple does indeed give away coins at a significant rate - and those individuals are free to do whatever they choose with those coins, which includes selling them for Bitcoin or other currencies. Another issue that frequently arises is the large concentration of wealth in the top XRP wallets.

In all, Ripple is one of the most well established cryptocurrencies in the space with a grand vision and prime positioning to execute upon their stated goals. Their long track record of technological innovation and impressive team means that XRP is one of the surest bets out there, and as cryptocurrency gradually becomes more mainstream, their connections are sure to give them a priority look as more financial entities make their way into the blockchain space.


Pros - Long and established history, incredible team, significant real world adoption, fast and cheap transactions.
Cons - Disputes over actual use case and future value of XRP, centralized network.
Security: 8/10
Decentralization: 2/10
Scalability: 9/10
Speed: 9/10
Energy Consumption 10/10
Team: 10/10
Community: 7/10
Adoption: 9/10
Growth Potential: 8/10
Liquidity: 9/10

CoinGrades Rating: 81/100
Coin Grade: A-

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