Crypto Community Confusion about Ripple’s XRP Coin as Company May Be to Blame
Why Are Many People Confused About XRP And Ripple? Ripple Might Be To Blame
There is a difference between Ripple and XRP. If you didn’t know that, don’t be too hard on yourself. Even Ripple didn’t seem to know that a few years back.
— DJ Booth (@djbooth007) September 27, 2018
Here is another one from 2014:
Another one! pic.twitter.com/moedlQB7JJ
— Vake (@vakeraj) September 27, 2018
So, what exactly is the difference between the both? Why do so many people use it interchangeably?
Ripple is a software solutions company, headquartered in San Francisco, California, USA. Its business is selling/licensing payment software to financial institutions, and its mission is to try to make the sending of money across borders globally a seamless proposition. Their stated goal is ‘to eventually transfer money/value just as the Internet moves information today’, which is to say in an error-free manner, nearly instantaneously, and inexpensively. Notice that this involves both payment and settlement, a process that today takes days, lacks transparency and costs quite a bit in terms of fees for the end user, and ties up capital for the service provider.
On the other hand, XRP is a digital asset. It exists independently of Ripple. It runs on the XRP Ledger, an open-source blockchain developed for payments. Both the XRP Ledger and XRP would continue to exist if Ripple didn’t. XRP is meant to be used with xRapid, which, together with xCurrent and xVia, are being positioned as one cohesive solution rather than several distinct ones.
The difference is pretty clear. Then why did the company Ripple itself confuse one with another? The problem lies in the ownership. Ripple owns 60 billion XRP, of a total of approximately 100 billion.
Ripple is a privately held company, and its shares are owned by a number of investors, founders, employees, etc. Ownership of XRP, which for an individual can typically be achieved via purchases on an increasing number of crypto exchanges, neither confers any rights of ownership in Ripple itself nor establishes any beneficial relationship for XRP holders if Ripple does well as an enterprise.
Ripple had published an infographic pointing out the difference between the both.
The XRP Ledger is being decentralized by Ripple. As of August 2018, the default UNL (Unique Node List) now has fewer than 48% (10 of 21) of validators under Ripple’s control. For every two third-party validators added, Ripple, removes one of theirs. The XRP Ledger employs a consensus mechanism in deciding whether a transaction is legit, making decentralization actually tailorable since nodes can choose which UNL to consult for consensus-based acceptance or rejection of transactions.
The Ripple PR team is hard at work at dissociating one from another. We can be sure that whenever any prominent member of Ripple’s management makes a public speech, they touch on the topic in some way or the other.