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= XRP =
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Introduction
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Ripple is a real-time gross settlement system, currency exchange and
remittance network created by Ripple Labs Inc., a US-based technology
company. Released in 2012, Ripple is built upon a distributed open
source protocol, and supports tokens representing fiat currency,
cryptocurrency, commodities, or other units of value such as frequent
flier miles or mobile minutes. Ripple purports to enable "secure,
instantly and nearly free global financial transactions of any size
with no chargebacks." The ledger employs the native cryptocurrency
known as XRP.

In December 2020, Ripple Labs and two of its executives were sued by
the U.S. Securities and Exchange Commission (SEC) for selling XRP
tokens, which the SEC classified as unregistered securities.

History
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Ripple was conceived by Jed McCaleb and built by Arthur Britto and
David Schwartz who then approached Ryan Fugger who had debuted in 2005
as a financial service to provide secure payment options to members of
an online community via a global network. Fugger had developed a
system called OpenCoin which would transform into Ripple. The company
also created its own form of digital currency referred to as XRP to
allow financial institutions to transfer money with negligible fees
and wait-time. In 2013, the company reported interest from banks for
using its payment system.

By 2018, over 100 banks had signed up, but most of them were only
using Ripple's XCurrent messaging technology, while avoiding the XRP
cryptocurrency due to its volatility problems. Representatives of the
Society for Worldwide Interbank Financial Telecommunication (SWIFT),
whose market dominance is being challenged by Ripple, have argued that
the scalability issues of Ripple and other blockchain solutions remain
unsolved, confining them to bilateral and intra-bank applications. A
Ripple executive acknowledged in 2018 that "We started out with your
classic blockchain, which we love. But the feedback from the banks is
you can’t put the whole world on a blockchain."

Ripple relies on a common shared ledger, which is a distributed
database storing information about all Ripple accounts. Chris Larsen
told the Stanford Graduate School of Business that the network was
managed by a network of independent servers which compare their
transaction records, and that servers could in theory belong to
anyone, including banks or market makers. Ripple validates accounts
and balances instantly for payment transmission and delivers payment
notification within a few seconds. Payments are irreversible, and
there are no chargebacks.

Ripple Labs continued as the primary contributors of code to the
consensus verification system behind Ripple. In 2014, the protocol
gained access to the US banking system amid concerns over security and
a lack of regulation.

Litigation
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A class action was filed against Ripple in May 2018 "alleging that it
led a scheme to raise hundreds of millions of dollars through
unregistered sales of its XRP tokens." According to the complaint,
"the company created billions of coins 'out of thin air' and then
profited by selling them to the public in 'what is essentially a
never-ending initial coin offering'."

The U.S. Securities and Exchange Commission (SEC) initiated legal
proceedings against Ripple Labs, CEO Brad Garlinghouse, and co-founder
Chris Larsen on December 21, 2020, for allegedly selling unregistered
securities. In the lawsuit, the SEC claimed that XRP was a security
instead of a commodity, because it was generated and distributed by
Ripple Labs in a centralized fashion and was not being adopted by
financial institutions for its advertised use cases. The SEC stated
that Ripple executives sold 14.6 billion units of XRP for more than
$1.38 billion to fund the company’s operations and enrich themselves.

In response, Garlinghouse criticized the SEC and indicated that Ripple
Labs would defend itself in court. Coinbase delisted XRP on December
28; an investor filed a class action on December 30 alleging that
Coinbase sold XRP tokens with the understanding that they were
unregistered securities.

On April 13 SEC Commissioner Hester M. Peirce published the Token Safe
Harbor Proposal 2.0 which is: ″intended to provide Initial Development
Teams with a three-year time period within which they can facilitate
participation in, and the continued development of, a functional or
decentralized network, exempt from the registration provisions of the
federal securities laws so long as certain conditions are met.″

Reception
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For its creation and development of the Ripple protocol (RTXP) and the
Ripple payment/exchange network Ripple Labs was named as one of 2014's
50 Smartest Companies in the February 2014 edition of 'MIT Technology
Review'. A scientific study made by two researchers from Stanford and
Stockholm University that studied the money production from an energy
consumption point of view and a macroeconomic level stated that
running a server on Ripple was comparable to the energy needs of
running an email server.

See also
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* Libra (cryptocurrency)
* List of online payment service providers
* List of cryptocurrencies
* Mojaloop

License
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All content on Gopherpedia comes from Wikipedia, and is licensed under CC-BY-SA
License URL: http://creativecommons.org/licenses/by-sa/3.0/
Original Article: http://en.wikipedia.org/wiki/XRP